Jakarta – Observers consider the renewable energy transition to be one of the important elements in driving economic growth under the leadership of President Prabowo Subianto, who is expected to immediately issue a New and Renewable Energy Law (EBT Law).
This step is considered crucial to attracting quality investment in the clean energy sector, achieving the ambitious economic growth target of 8 per cent, creating jobs, and improving Indonesia’s competitiveness on the global stage.
The Managing Director of the Energy Shift Institute, Putra Adhiguna, explained that Indonesia needs to respond to changing global energy trends driven by major countries such as China and India. Both are aggressively developing electricity from renewable energy sources, a move considered essential to attract multinational investors.
“To achieve high economic growth, we need big companies that will only invest if there is clean energy. So, this is no longer about Western trends, but economic competitiveness,” Putra said in a discussion organised by Yayasan Indonesia CERAH titled “Meneropong Arah Transisi Energi era Prabowo-Gibran” or “Examining the Direction of Energy Transition in the Prabowo-Gibran Era”.
According to him, the energy transition is about changing energy sources and inviting quality investment that is expected to have a long-term economic impact. “Big multinational companies like Tesla and Samsung have green energy targets. If Indonesia does not provide this energy source, we could be left behind in the investment competition,” he continued.
Legal certainty
Putra emphasized that the EBT Law can provide the legal certainty investors need, avoiding Indonesia’s risk of oversupply or financial burden due to planning errors. He cited PLN’s oversupply of electricity several years ago as an example of careless planning, which ultimately cost the state trillions of rupiah.
“If we are not careful, we can create a liability 30 years in the future, not just an economic problem now,” said Putra, who added that a responsible Electricity Supply Business Plan (RUPTL) and clear regulations will be an essential foundation for building a sustainable energy sector.
In addition to regulations related to renewable energy, energy subsidy reform is also mentioned as an important thing that needs to be done immediately. Anissa Suharsono, Energy Policy Associate at the International Institute for Sustainable Development (IISD), said energy subsidies have been draining the state budget. At the same time, the impact needs to be fully targeted. She pointed out that in 2022-2023, energy subsidies and compensation will cost around Rp 365 trillion-Rp 385 trillion, primarily for fossil fuels. “These fossil energy subsidies mostly benefit the rich, while vulnerable groups still have difficulty accessing energy,” said Anissa.
Executive Director of Yayasan Indonesia CERAH, Agung Budiono, added that Indonesia needs to immediately reduce dependence on fossil energy and accelerate the transition to renewable energy to achieve energy independence. “As long as we still rely on fossil energy, we will never be energy self-sufficient. We already import almost all types of fossil fuels, which could be a big problem in the future,” Agung explained.
Agung explained that with the depletion of fossil reserves, Indonesia will face the risk of increased energy imports if it immediately develops renewable energy sources.
With legal certainty through the EBT Law and more targeted energy subsidies, investment in the clean energy sector is hoped to increase and bring Indonesia closer to energy independence. (Hartatik)
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