As the war in the Middle East eats into global energy security, Indonesia’s president Prabowo Subianto has reiterated the country’s plans to accelerate renewable energy capacity – particularly a 100-gigawatt (GW) target for solar power within the next three years.
“For us, this is more urgent because of…the geopolitical situation in the Middle East,” he said on Monday at the Indonesia-Japan Business Forum in Tokyo.
To ensure Indonesia’s energy security, “we are determined to enhance whatever we have and to secure renewable and green energy,” Prabowo added. “With these efforts, we will be in a secure position to meet whatever uncertainty there is.”
As of 2023, renewables made up nearly 16 per cent of Indonesia’s energy mix, according to International Energy Agency data, driven primarily by hydropower and geothermal energy.
Solar power stood at just 1.7 per cent of Indonesia’s energy mix, while coal held the largest share of energy at about 36 per cent.
The 100 GW solar power programme, which was initially announced in August 2025 and includes plans to install more battery energy storage systems (BESS), continues to face hurdles, analysts say.
“Despite a strong economic case, implementation of the solar plus BESS program remains slow due to regulatory uncertainty, financing constraints, and land acquisition challenges,” wrote Mutya Yustika, research and engagement lead for Indonesia energy transition at the Institute for Energy Economics and Financial Analysis (IEEFA), a United States-based think tank.
Recent analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) suggests the shift could save around US$2 billion by reducing diesel imports. It could also cut more than US$1 billion in fuel subsidies, broadly in line with estimates from Jakarta-based think tank the Institute for Essential Services Reform (IESR).
However, progress on the 100 GW solar and BESS plan, first announced in August 2025, will require addressing the regulatory uncertainty and financing gaps that have plagued Indonesia’s energy transition for years.
IEEFA pointed out that progress on phasing out diesel has been sluggish, despite efforts for state utility firm Perusahaan Listrik Negara (PLN) to replace diesel plants with solar and batteries as early as 2022. A presidential regulation that had established procurement timelines of under 180 days, but no power purchase agreements have been signed and delays have persisted, affecting private sector interest.
PLN’s slow update of renewable energy has been cited as the main reason for the delay in Indonesia’s energy transition, affecting project viability. Last year, an official with Indonesia’s Just Energy Transition Partnership (JETP) secretariat said that the state utility company has not been procuring clean energy, despite its pledges to phase down fossil fuel use.
Although Indonesia’s Ministry of Energy and Mineral Resources granted PLN permission to operate hybrid plants last year, the tariff framework remains under discussion, according IEEFA’s Yustika.
“Without a clear and finalised tariff structure, PLN is unable to execute power purchase agreements, and developers lack the pricing certainty needed to mobilise capital,” she wrote. “Establishing clear, transparent, bankable, and consistent tariff regulations will be critical to unlock private investment and accelerate deployment.”
The 100 GW solar target also has to be integrated into PLN’s 2025-2034 Electricity Supply Business Plan (RUPTL), a core planning document that currently projects only 17.1 GW of solar by 2034. IESR’s head of energy system modelling and analysis, Alvin Putra Sisdwinugraha, told local media outlet Warta Ekonomi that the plan must be updated to include the new target.
Biodiesel at home, coal abroad
An estimated US$78 billion is needed to fund the 100 GW over the next five years, according to IESR.
Prabowo, in his speech in Japan, acknowledged the need for Indonesia’s energy transition projects to be bankable and to deliver “real benefits” alongside returns on investment.
He added that Indonesia is also trying to improve its investment climate by streamlining regulations.
In addition to plans to boost solar power, Prabowo highlighted the country’s potential for geothermal energy and biofuels as alternative renewable energy sources. The country is raising its target blend of palm oil in biodiesel from 40 per cent to 50 per cent effective 1 July this year.
This blend of palm oil and diesel, called B50, is expected to reduce fossil fuel consumption by 4 million kilolitres and save up to 48 trillion rupiah (US$2.8 billion), said Airlangga Hartarto, Indonesia’s Coordinating Minister for Economic Affairs.
Coal, said Prabowo, would remain a “reserve of last resort” for Indonesia’s energy security.
However, the president has also reportedly ordered an increase in coal production as the world’s largest exporter of the fossil fuel seeks to capitalise on rising global coal prices. Indonesia on Monday approved a coal production plan of 580 million tonnes this year.
South Korean president Lee Jae-myung expressed appreciation for Indonesia’s exports of liquified natural gas (LNG) and coal to the country, as he met with Prabowo on Wednesday.
South Korea, which last year committed to phasing out coal, has delayed the shutdown of its coal-fired power plants in light of the energy crisis caused by the war in the Middle East. Indonesia is its largest supplier of coal after Australia.
In a joint statement, both leaders said they would accelerate the launch of a high-level energy security dialogue as one of several efforts to stabilise global energy supply chains and minimise disruptions.
The two presidents signed 10 memoranda of understanding (MOUs) covering critical minerals, clean energy advancement, carbon capture and storage, as well as offshore power generation services, among others.
Indonesia’s Airlangga told local media that the government would evaluate its exports of LNG separate from these agreements, given increasing domestic demand for the gas.
Separately, Indonesia’s finance minister Purbaya Yudhi Sadewa told Bloomberg that the country is mulling a new export tax on coal.
