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Indonesia imports the vast majority of the liquified petroleum gas (LPG) it consumes. This obviously drains the foreign exchange reserves. But considering Indonesia has massive coal reserves, the gasification of coal can be an interesting alternative. By converting low-quality domestic coal into Dimethyl Ether (DME), the country can reduce purchases of expensive LPG from overseas.
While the Philippines declared an energy crisis two weeks ago, it seems that matters in Indonesia remain under control. So far, there haven't been long queues at gas stations (to hoard fuels), while government officials repeatedly ensure that there is enough fuel available for society, although people are encouraged to cut back on fuel consumption (for example, by working-from-home once a week).
The Iran War reveals the risks involved when countries are dependent on imports of energy to meet domestic demand. In the case of Indonesia, which subsidizes part of domestic energy consumption, skyrocketing crude oil prices threaten to push the government's budget deficit beyond the legal cap of 3 percent of gross domestic product (GDP). And so, it is time for action.
Energy is crucial for Indonesia's social and economic development. And despite Indonesia's renewable energy ambitions (targeting to become carbon-neutral by 2060), crude oil (a fossil fuel) remains an important part of the country's energy policy. In fact, Indonesia has a long-term target to achieve a crude oil production of 1 million barrels per day (bpd) by 2030.
The National Energy Board (Dewan energi Nasional, DEN) wants foreign investors to play a key role in the development of large-scale solar power plants through the Red-White (Merah Putih) Village Cooperative. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that additional solar power through this cooperative will have a capacity of 80-100 gigawatts (GW).
On Thursday 03 July 2025 Indonesia Investments released its June 2025 report, titled 'Indonesia’s Energy-Poverty Nexus – Energy Disruptions Perpetuate Poverty'. The report discusses a selection of economic, political and social subjects that were relevant in the month of June 2025.
An important document was released by Indonesia’s state-owned electricity firm Perusahaan Listrik Negara (PLN) at the end of May 2025. This document is titled the Electricity Supply Business Plan (in Indonesian: Rencana Usaha Penyediaan Tenaga Listrik, RUPTL) and covers the 2025-2034 period.
Indonesia has impressive potential for geothermal power. However, the country struggles to tap the potential of this renewable energy source. Not only does it prove difficult to encourage investment in exploration and exploitation, but sometimes there also exists resistance from the local population.
In December 2024, Indonesia’s Ministry of Energy and Mineral Resources released a statement in which it said that renewable energy accounts for 13.93 percent of the national energy mix. Meanwhile, the ministry hopes this percentage can touch 14.1 percent by the end of 2024 especially supported by geothermal power development.
On 30 May 2024 a new government regulation took effect that might have an impact on the coal mining industry of Indonesia. This regulation is Government Regulation No. 25 of Year 2024 on the Amendment of Government Regulation No. 96 of 2021 on the Implementation of Mineral and Coal Mining Business Activities (henceforth: Regulation 25/2024).
Latest Columns Energy
Asep Sugiharta, an official at the Ministry of Forestry, said that a new bill has been submitted to Indonesia's parliament (DPR) which is expected to open up the potential for geothermal power development in Indonesia. Currently, geothermal exploitation is lawfully defined as a 'mining activity' (Law No. 27 2003) and therefore prohibited to be conducted in protected forest and conservation areas (Law No. 41 1999), even though geothermal mining activities have a relatively small impact on the environment (compared to other mining activities).
The heavily subsidized fuel price of Indonesia is likely to be raised next month according to Indonesian media sources. Various high officials, including Economic minister Hatta Rajasa, discussed the possibility to raise the fuel price from IDR 4,500 (USD $0.46) to IDR 6,500 (USD $0.67) per liter starting from May. This increase will only apply to private passenger cars, and not to motorcycles and public transportation. However, president Susilo Bambang Yudhoyono has not made up his mind yet.
