Indonesia’s renewable energy capacity to reach 38.1 GW in 2035 - Asian Business Review
Published November 22, 2025
Indonesia's Renewable Energy Capacity Projected to Reach 38.1 GW by 2035
Indonesia is set to experience significant growth in its renewable energy sector, with projections estimating that the country’s renewable energy capacity will reach 38.1 gigawatts (GW) by the year 2035. This anticipated increase in capacity is a crucial component of Indonesia’s broader strategy to enhance its energy mix and reduce reliance on fossil fuels, aligning with global trends toward sustainable energy solutions.
The Indonesian government has been actively promoting renewable energy initiatives as part of its commitment to the Paris Agreement, aiming to reduce greenhouse gas emissions and transition towards a more sustainable energy framework. The country has abundant natural resources, including solar, wind, hydro, and geothermal energy, which present significant opportunities for expansion in the renewable sector.
According to the Ministry of Energy and Mineral Resources, Indonesia has set a target to achieve 23% of its total energy consumption from renewable sources by 2025. This ambitious goal is part of a long-term strategy that envisions a substantial increase in the share of renewables in the energy mix by 2050.
Current Renewable Energy Landscape
As of now, Indonesia's renewable energy capacity stands at approximately 10.9 GW, with the majority derived from hydroelectric power. The country has made strides in harnessing its geothermal resources, which are among the largest in the world, contributing significantly to the renewable energy output. Wind and solar energy are also emerging sectors, with increasing investments and projects underway.
Hydropower remains the dominant source of renewable energy in Indonesia, accounting for around 6.9 GW of the total capacity. Geothermal energy follows, contributing approximately 2.1 GW. The remaining capacity is derived from biomass, solar, and wind energy sources, which are gradually gaining traction in the energy market.
Government Initiatives and Policies
The Indonesian government has implemented various policies to encourage the development of renewable energy. These include fiscal incentives, regulatory frameworks, and partnerships with private investors. The Ministry of Energy and Mineral Resources has prioritized the establishment of a conducive environment for renewable energy investments, aiming to attract both domestic and foreign stakeholders.
One of the key initiatives is the Renewable Energy Law, which aims to simplify the permitting process and provide a more predictable regulatory environment for investors. This law is designed to facilitate the entry of new renewable energy projects and enhance the competitiveness of clean energy sources compared to traditional fossil fuels.
Additionally, the government has launched several programs to promote the use of solar energy, particularly in rural areas where access to electricity is limited. The "1000 Solar Rooftop" program is one such initiative, encouraging households and businesses to install solar panels to generate their own electricity, thereby reducing dependence on the grid.
Investment Opportunities
With the projected growth in renewable energy capacity, Indonesia presents a wealth of investment opportunities in the sector. The government has identified several key areas for investment, including solar farms, wind energy projects, biomass facilities, and geothermal power plants. International investors are increasingly looking to Indonesia as a viable market for renewable energy development.
Recent reports indicate that Indonesia is expected to attract significant foreign direct investment (FDI) in the renewable energy sector, with estimates suggesting that the country could secure billions of dollars in new investments by 2035. This influx of capital is anticipated to drive technological advancements, create jobs, and stimulate local economies.
Challenges to Overcome
Despite the promising outlook for renewable energy in Indonesia, several challenges remain that could impact the realization of these goals. Infrastructure limitations, regulatory hurdles, and financing issues are among the primary obstacles that need to be addressed to facilitate the growth of the sector.
Infrastructure development is critical for the integration of renewable energy into the national grid. Many remote areas lack the necessary infrastructure to support renewable energy projects, which could hinder their implementation. The government is working to enhance grid connectivity and improve access to energy in underserved regions.
Regulatory challenges also pose a significant barrier to investment. The complexity of the permitting process and the lack of clarity in regulations can deter potential investors. Streamlining the regulatory framework and ensuring transparency will be essential to foster a more inviting environment for renewable energy projects.
Financing remains a crucial aspect of renewable energy development. While there is growing interest from investors, access to affordable financing can be a challenge for many projects. Innovative financing mechanisms and partnerships will be essential to mobilize the necessary capital for large-scale renewable energy initiatives.
Future Outlook
Looking ahead, Indonesia's renewable energy sector is poised for substantial growth, with a clear trajectory towards achieving the 38.1 GW capacity target by 2035. The government's commitment to expanding the renewable energy mix, coupled with increasing investments and technological advancements, will play a vital role in realizing this vision.
The transition to renewable energy not only aligns with global sustainability goals but also offers Indonesia an opportunity to enhance energy security and reduce its carbon footprint. As the country continues to develop its renewable energy resources, it stands to benefit from economic growth, job creation, and a more sustainable future.
In conclusion, Indonesia's renewable energy landscape is evolving rapidly, with significant potential for growth and development. The government's proactive approach and the increasing interest from investors are set to transform the energy sector, paving the way for a cleaner and more sustainable energy future.
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