Indonesia Renewable Energy Market

Market Overview:

Indonesia renewable energy market size reached 47.88 TWh in 2023. Looking forward, IMARC Group expects the market to reach 116.64 TWh by 2032, exhibiting a growth rate (CAGR) of 9.30% during 2024-2032. The growing awareness about climate change, increasing need to reduce greenhouse gas emissions and rising investments in onshore wind projects to maximize wind energy production represent some of the key factors driving the market. This, along with government policies promoting clean energy and abundant natural resources like solar, wind, and geothermal are increasing the overall market share in Indonesia.

Renewable energy is harnessed from sources that naturally replenish themselves. It includes solar, wind, hydroelectric, and geothermal energy  and also consists of biomass energy derived from organic materials like wood and crop waste. It is sustainable, as the sources naturally replenish themselves, ensuring a long-term energy supply. It is clean, producing minimal or no air pollution, which helps combat global warming and improve air quality. Renewable energy is often decentralized, enabling local generation and reducing transmission losses. It facilitates the diversification of energy sources and reduction of reliance on fossil fuel imports. It assists in creating jobs, fostering technological innovation, and promoting a more robust and sustainable economy. It also assists in extending energy access to underserved communities and remote regions, improving quality of life. It is used to pump water for irrigation and drinking purposes in rural areas. It is also utilized to power desalination systems to purify seawater, making it suitable for drinking and irrigation. Besides this, it is employed to power street lights, which use photovoltaic panels to generate electricity during the day for illumination at night.

Indonesia Renewable Energy Market Trends:

Abundant Natural Resources

Indonesia is rich in renewable energy resources, including solar, wind, geothermal, and hydroelectric potential, which is driving the market growth in the country. In line with this, as one of the world’s most active volcanic regions, Indonesia has significant geothermal reserves, thereby making it a leader in this field. Solar energy is also gaining momentum due to Indonesia’s tropical location, offering high solar irradiance. In addition to this, wind and hydropower resources add to the country’s renewable potential. According to Indonesia renewable energy market analysis, this wealth of natural resources positions Indonesia as an attractive market for renewable energy development, allowing it to diversify its energy mix and reduce its carbon footprint.

Government Policies and Support

The Indonesian government has implemented strong policies to encourage the growth of renewable energy across the country. For instance, in September 2024, the Indonesian government relaxed the local content requirements (LCR) for the development of electricity infrastructure under Ministry of Energy and Mineral Resources regulation with the aim to attract concessional funding for renewable energy projects from international development banks. Indonesia is targeting a renewable energy mix of 23% by 2025, requiring an estimated USD 167 Billion to achieve this goal. The relaxation of LCR is expected to unlock significant foreign investment, which is crucial for meeting these ambitious targets. Additionally, the government’s Renewable Energy Fund supports the development and deployment of green energy technologies. According to Indonesia renewable energy market forecast, this commitment is driven by Indonesia’s aim to reduce its dependency on fossil fuels, improve energy security, and contribute to global climate goals.

Rising Energy Demand and Economic Growth

Indonesia’s rapidly growing population and robust economic development are facilitating the energy demand. As Southeast Asia’s largest economy, Indonesia is experiencing industrial expansion, urbanization, and infrastructure development, all of which require substantial energy supply. Renewable energy is seen as a sustainable solution to meet this rising demand while reducing the environmental impact. The government’s electrification goals for rural and remote areas also encourage renewable energy projects, such as off-grid solar solutions and mini-hydropower plants, to address energy access gaps. Moreover, Indonesia’s long-term economic strategy includes diversifying its energy mix to support stable economic growth and reduce vulnerability to global oil price fluctuations, which, in turn, is driving the Indonesia renewable energy market growth. The increasing awareness of environmental sustainability among businesses and consumers also plays a role, as companies seek to align their operations with green energy practices and reduce carbon emissions, further boosting the demand for renewable energy solutions across sectors.

Indonesia Renewable Energy Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2024-2032. Our report has categorized the market based on source.

Source Insights:

• Solar
• Wind
• Hydro
• Bioenergy
• Others
   

The report has provided a detailed breakup and analysis of the market based on the source. This includes solar, wind, hydro, bioenergy, and others.

Regional Insights:

• Java
• Sumatra
• Kalimantan
• Sulawesi
• Others
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Java, Sumatra, Kalimantan, Sulawesi, and Others.

Competitive Landscape:

The Indonesia renewable energy market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Indonesia Renewable Energy Market News:

• In November 2023, Indonesia launched its investment plan to mobilize $20 Billion in financing pledged by global lenders led by the United States and Japan to accelerate its power sector decarbonization and called for immediate fund disbursement. Under Indonesia's Just Energy Transition Partnership (JETP) the country seeks to cut carbon dioxide emissions to 250 million metric tons for its on-grid power sector by 2030, versus estimated business-as-usual emissions of over 350 million.
• In July 2024, PT PLN (Persero) continued to advance its global collaborations to accelerate the energy transition by expanding the development of new and renewable energy (EBT) -based power plants in Indonesia. This commitment was reinforced at the Green Energy Buyers Dialogue event, organized by the Coordinating Ministry for Maritime Affairs and Investment in Jakarta.
• In August 2024, Barito Renewables announced a partnership with the energy company from the Ayala group, ACEN, to accelerate the development of renewable wind energy projects throughout Indonesia. This collaboration will be carried out through Barito Renewables' subsidiaries, namely PT Barito Wind Energy and ACEN Indonesia Investment Holdings Pte. Ltd.

Indonesia Renewable Energy Market Report Coverage:

Key Questions Answered in This Report:

• How has the Indonesia renewable energy market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the Indonesia renewable energy market?
• What is the breakup of the Indonesia renewable energy market on the basis of source?
• What are the various stages in the value chain of the Indonesia renewable energy market? 
• What are the key driving factors and challenges in the Indonesia renewable energy?
• What is the structure of the Indonesia renewable energy market and who are the key players?
• What is the degree of competition in the Indonesia renewable energy market?
   

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Indonesia renewable energy market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Indonesia renewable energy market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Indonesia renewable energy industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.