This is part 2 of a series of articles about the energy transition policy in Indonesia. The first article titled “The Energy Transition is being Obstructed by the Power Market Structure in Indonesia: Locked In, Powered Down” looked at how PLN’s power purchase agreement process is systematically preventing renewable energy from joining the grid in Indonesia
The headline of the news report of the Ministry of Energy and Mineral Resources on May 26, 2025 for the announcement of the ten-year electricity plan RUPTL 2025-2034 was carefully thought out. 69.5 GW of new power generation is planned, with 76% of the new generation renewable, primarily solar, hydro and wind (Bubb et al., 2025). President Prabowo Subianto has been promising the world for 15 years that Indonesia will phase out coal and 10 years that Indonesia will be 100% renewable energy. The government has proposed that the RUPTL is an indication of this.
It is not. In this way, the difference between “plan” and “headline” provides a clue on the “state of climate policy” in Indonesia.
The facts behind the figures.
This new RUPTL is correct in a technical sense to state 76% renewables but fails to convey the structural information. The question isn’t what will be constructed by 2034, but rather when the renewables will get constructed – and what it will tie the nation to for decades.
As per this plan, 27.9 GW of new thermal power including most of the gas and coal power will be built during the first five years of 2025-2029. The biggest ramp-up of renewables and storage will take place in the next five years (2030-2034), with 42.6 GW of capacity to be installed (Draps et al., 2025).
That is, coal and gas are preferred to renewables. The new RUPTL delays 72% of all the new renewable energy projects (42.6 GW over 10 years) (Kariza, 2025). The useful life of today’s power plant is 25-35 years. Not only are all of these coal and gas plants committed to be built in 2025-2029 in the RUPTL, but they may also be well outside of the time horizon of Indonesia’s own climate transition plans.
Source: (Yustika, 2025)
This makes it worse compared to what Indonesia had promised in the past. The RUPTL 2025-2034 will be less ambitious than the RUPTL 2021-2030 as deployment of renewable energy will be pushed back after 2030 with the planned renewable energy capacity reduced from 20.9 GW to 18.6 GW. This is not an improvement over the previous plan (Hasan & Zahiruddin, 2025). It is a step back.
The actual numbers match up with the direction of travel. As the RUPTL sees clean energy production quadruple from 44 TWh to 172 TWh by 2034, fossil fuel power generation will increase by 40% from 295 TWh to 407 TWh during the same period (Hasan & Zahiruddin, 2025). Fourfold renewables and 40% more fossil fuel production is NOT transition. Twofold increase – clean energy is complementary not a replacement to coal and gas.
The JETP gap
The Bali G20 Summit Joint Declaration on Just Energy Transition is a very positive step for Indonesia’s involvement. The partnership was able to mobilize international funding to speed coal retirement and boost renewable deployment beyond what was planned for in national programmes. RUPTL 2025-2034 is also going in the opposite direction as all the JETP commitments.
Source: (Hasan & Zahiruddin, 2025)
With only 40% of the JETP Comprehensive Investment and Policy Plan’s total solar and wind capacity of 24.3 GW, the RUPTL will have 10.6 GW by 2030 (Hasan et al., 2025). More important, what has taken place in the JETP process in relation to coal retirement. Managed coal phase-out and early coal retirement were added as the second priority in the CIPP 2023 version of the JETP. In the draft version this has been delayed to 5th position because of technical, legal and finance issues. So this isn’t an engineering solution to deprioritize coal retirement when the whole point of having the partnership is coal retirement. It’s a very easy paradox.
It’s a big misalignment with the Paris Agreement. With a 1.5°C Power Sector, the share of coal energy in Indonesia will be reduced to 16% or below in 2030 and eventually be phased out by 2040. Even the RUPTL 2025-2034 has adjusted the percentage of coal in electricity generation to 57% in 2030.
The issue is this still happens.
That was not the first time Indonesia had ready its ambitious energy plan which failed to be materialized. Almost all of the new capacity targeted by Presidents Yudhoyono and Widodo for 17.5 GW and 35 GW respectively is fossil fuel. These commitments lead PLN to contractual commitments to operate and maintain coal plants, which affect the development of renewables and result in oversupply (Yustika, 2025). The RUPTL 2025-2034 is the same, but it will have plenty of knowledge of its past.
In the first of this series of articles, we explained the contractual mechanism: PLN’s take-or-pay power purchase agreements stipulate that the PLN is obliged to pay the owner of the coal plant, even in the absence of demand for the electricity. The pledge is further delayed with more coal power projects coming up in 2025-2029. The dependence on fossil fuels (gas and coal) may cost USD 60 billion for Indonesia from 2025 to 2034, and in 2024, Indonesia is already dependent on gas-fired power plants with less than 30% capacity (Yustika, 2025). The fossil fuel capacity available on the system is sufficient. The remaining is thrown in by RUPTL.
They’ve an example of execution to throw into the mix. The commissioning of power plants until the first semester of 2025 was 1.6 GW out of the 10 GW planned for 2021-2030 in the RUPTL (Hasjanah & Simanjuntak, 2025). The current plan in Indonesia has been realized by only 16% renewable energy. Then there is a little institutional optimism that 2025-2034 plan with backloaded renewables (as long as there were no structural changes which resulted the failure to meet earlier goals) is needed.
Signal problem in investments
There is a straight-line relationship between RUPTL planning and capital allocation. In the first half of 2024 renewables totaled USD 565 million, a figure which was less than a quarter of the amount for mineral and coal (USD 2.4 billion). (Hasan & Zahiruddin, 2025) International green capital is in line with regulatory certainty. A 10-year electricity plan backed by fossil fuel with heavy up-front costs and renewables is telling investors that the opportunity set is short-term gas and coal, not solar and wind and storage. The RUPTL is also a price signal since it is a planning instrument. Currently, fossil fuel costs are included in its price.
Global investors and multinationals might be hesitant to invest in Indonesia due to the huge amounts of coal and gas energy subsidy. (Yustika, 2025) Foreign capital is needed for the renewable build out, as the RUPTL itself estimates that, in total, IDR 2,133.7 trillion is required for the build out, of which 73% is from private independent power producers (IPPs). If a plan doesn’t persuade the investors in need to support it, then it is a plan that undermines itself.
What shall we construct in a believable plan and how can it be constructed?
It’s not so complicated, but politically hard to do. While recognizing the current difficulties in renewables’ capacity additions, the phase-in of renewables capacity additions should begin in 2025-2029 and should not be deferred beyond 2030. New coal plant in the pipeline should be given a hard stop of 6.3 GW. The existing coal plants have take-or-pay PPA commitments with PLN which needs to be restructured and was explained in the first article of this series. It is essential to shift the coal retirement mandate in the JETP to the core of the energy planning in Indonesia from fifth priority.
Coal late-comers and renewables deployment delays forced Indonesia to a failure to launch scenario with the nation risking to be locked into fossil fuel-dominated power grid for decades as a result of giving priority to fossil fuel infrastructure deployment. (Hasan, 2025)
To reach a truly clean energy system, renewable energy potentials such as solar, geothermal, hydro and wind can be developed in Indonesia. The resource deficiency is not observed in the RUPTL 2025-2034. It’s a matter of policy. However, policies can be changed — before the next 10 years are spent building out infrastructure that makes that impossible.
The third part of the series is about the newly established state export agency for coal: the PT Danantara Sumberdaya Indonesia, and the impact of this on the credibility of the supply side in Indonesia.
Keywords: RUPTL 2025-2034, Fossil Fuel Dependency, JETP, Renewable Energy Delay, Investment Signal
References.
Bubb, M., Kasmali, M., Clugston, S., & Antonio, K. S. (2025, June 6). Powering Indonesia’s future: Key takeaways from the 2025–2034 RUPTL. https://pdf.hoganlovells.com/en/publications/powering-indonesias-future-key-takeaways-from-the-20252034-ruptl
Draps, F., Mendelli, J.-L. N., Baggett, S., & Trevanion, D. (2025, June 20). Indonesia’s new power development plan: Highlights from the 2025–2034 RUPTL. https://www.ashurst.com/en/insights/indonesias-new-power-development-plan/
Hasan, K. (2025). RUPTL 2025-2034 sees fossil fuels hold place of honour despite vision for renewables. The Centre for Research on Energy and Clean Air. https://energyandcleanair.org/wp/wp-content/uploads/2025/09/CREA_Press-release_ID_RUPTL_2025-2034_09.2025.pdf
Hasan, K., Myllyvirta, L., & Zahiruddin, N. (2025). Indonesia’s RUPTL outlines faster growth in fossil fuel use, downgrades ambition for clean energy. https://energyandcleanair.org/publication/indonesias-ruptl-outlines-faster-growth-in-fossil-fuel-use-downgrades-ambition-for-clean-energy/
Hasan, K., & Zahiruddin, N. (2025). Indonesia’s RUPTL 2025-2034: Fossils first, renewables later. https://energyandcleanair.org/publication/indonesias-ruptl-2025-2034-fossils-first-renewables-later/
Hasjanah, K., & Simanjuntak, U. (2025, May 27). Government Needs to Ensure Strategy to Achieve Renewable Energy Target in RUPTL 2025-2034. Institute for Essential Services Reform. https://iesr.or.id/en/government-needs-to-ensure-strategy-to-achieve-renewable-energy-target-in-ruptl-2025-2034/
Kariza, D. (2025, June 2). New “green” RUPTL risks sidelining, rather than empowering renewables. Jakarta Post. https://www.thejakartapost.com/business/2025/06/02/new-green-ruptl-risks-sidelining-rather-than-empowering-renewables.html
Yustika, M. (2025). The risks of fossil fuel dependence in Indonesia’s Electricity Supply Business Plan (RUPTL) 2025-2034 Insights Electric Grid Renewables Decarbonization Solar Indonesia Asia. https://ieefa.org/resources/risks-fossil-fuel-dependence-indonesias-electricity-supply-business-plan-ruptl-2025-0
Abdullahi Ahmed
+ There are no comments
Add yours