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Indonesia needed around US$243bn to provide electricity from greener new and renewable energy sources, Minister of Finance Sri Mulyani Indrawati said. This US$243bn budget is required to reach Indonesia’s Nationally Determined Contribution (NDC) target to reduce carbon emissions to 29% through its own efforts and 41% with international aid in 2030. To reach the 29% NDC target, the electricity sector needs to reduce carbon emissions to 314m tons of carbon dioxide equivalent.

Hence, the government is also still preparing the carbon tax imposition guideline to provide incentives to businessmen, who manage to reduce carbon emissions. The government is also still discussing the matter involving the fairest carbon price.

Harnessing renewable energy investment sector in Indonesia
From Capital Investment Coordinating Board (BKPM) news, by 2025, Indonesia is expected to achieve the use of renewable energy by up to 23 percent as the national energy source. Here’s why investing in Indonesia’s green energy sector offers a promising opportunity.

There is no doubt that energy demands will increase along with economic development and population growth. As a rapidly developing nation and ASEAN’s largest country, Indonesia accounts for 40 percent of the region’s energy consumption. Furthermore, the demand is predicted to increase by 80 percent while the need for electricity could rise by three folds between 2015 and 2030.

The energy sector has been identified as the second main contributor of emissions after agriculture, forestry and other land uses. With 8.5 million motor vehicles added to Indonesia’s roads every year, massive energy demands from large industries and heavy reliance on domestic coal, as well as imported petroleum products, Indonesia fully realizes it must step up its renewable energy transitions. Especially, considering its goal to achieve 23 percent of renewable energy use by 2025.

Currently, Indonesia’s renewable energy contribution is holding at twelve percent. Eighty eight percent of the national power capacity is still sourced from fossil fuels. However, it is only by shifting energy investment toward renewable resources can Indonesia reach its target.

IDCTA Admin