Advancing Renewable Energy in Indonesia: A Comprehensive Analysis of Challenges, Opportunities, and Strategic Solutions

Indra A. Aditya, Tito Wijayanto and Dzikri F. Hakam ()
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Indra A. Aditya: Perusahaan Listrik Negara, Jakarta 12160, Indonesia
Tito Wijayanto: School of Business and Management, Institut Teknologi Bandung, Bandung 40132, Indonesia
Dzikri F. Hakam: School of Business and Management, Institut Teknologi Bandung, Bandung 40132, Indonesia

Sustainability, 2025, vol. 17, issue 5, 1-20

Abstract: Indonesia’s commitment to the early retirement of coal-fired power plants (CFPPs) underscores the urgent need to transition to renewable energy due to coal’s significant contribution to environmental degradation and rising CO 2 emissions. Despite this urgency, several challenges impede the widespread adoption of renewable energy, including disparities in energy access, inadequate policy implementation, unreliable government financing mechanisms, and lack of education and awareness, especially due to the current incorporation of hydrogen and nuclear energy. To overcome these barriers, a robust policy framework is essential, complemented by progressive policy enactment. This study examines Indonesia’s evolving energy landscape, highlighting key challenges and opportunities for the implementation of renewable energy. The findings emphasize that a comprehensive and integrated roadmap is critical to unlocking Indonesia’s renewable energy potential. The roadmap includes strengthening governance, fostering public–private collaborations, and securing diverse financing channels, while offering targeted incentives, such as tax breaks and financial benefits. Furthermore, conducting pre-feasibility studies and regional assessments for emerging energy sources, like hydrogen and nuclear power, is crucial to accurately evaluate potential risks and opportunities. By addressing gaps in regulatory framework and enforcing effective policy measures, Indonesia can facilitate public–private partnerships, promote technology transfer, and develop skilled workforce as an effort to transition into a sustainable and diversified energy future.

Keywords: energy transition; government; policy framework; renewable energy; roadmap (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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