Indonesia Accelerates Energy Transition with New Policies

Strengthening Energy Transition Foundation

Indonesia is entering a critical phase in its journey towards clean and sustainable energy independence. The government has reaffirmed its commitment to accelerating the national energy transition through regulations and innovations that support a greener future. Recent developments include the introduction of PMK No. 5/2025 and PP No. 40/2025, which serve as new legal frameworks for national energy management.

Key Regulatory Developments

The new regulations reflect the government's determination to balance emission reduction ambitions with the need to maintain national electricity system stability. These policies are expected to catalyze the phase-out of coal-fired power plants (PLTU) while creating more space for renewable energy growth. Muhamad Saleh, a researcher from Centre of Economic and Law Studies (CELIOS), highlighted that PMK No. 5/2025 establishes an energy transition platform as a fiscal instrument to support the acceleration of PLTU closure and termination of Power Purchase Agreements (PJBL).

Pertamina Geothermal Energy's Strategic Role

PT Pertamina Geothermal Energy Tbk (PGE) has become increasingly strategic in strengthening Indonesia's energy sovereignty and accelerating the transition to clean energy. With geothermal potential reaching 24 gigawatts, approximately 40% of global reserves, PGE has a significant mandate to transform this potential into national strength. In 2025, PGE achieved several milestones, including the operation of the Lumut Balai Unit 2 geothermal power plant (55 MW) in South Sumatra and the commencement of the Gunung Tiga 55 MW project in Lampung.

Innovative Projects and Sustainability Commitment

PGE is not only focusing on geothermal energy but also expanding its innovative role through the Green Hydrogen project in Ulubelu, as part of Indonesia's roadmap to achieve Net Zero Emission (NZE) by 2060. This commitment to sustainability has earned PGE global recognition, including a place in the Top 50 ESG Global list by Sustainalytics with an ESG risk score of 7.1, and 18 PROPER Gold awards from the Ministry of Environment and Forestry.

Addressing Grid Stability Challenges

As Indonesia increases its solar and wind energy penetration, the country faces new challenges in maintaining grid stability due to the intermittent nature of these renewable sources. To address this, Wärtsilä Energy and Institut Teknologi Bandung (ITB) organized a workshop on Indonesia's electricity system stability. The event aimed to deepen understanding of how technologies like Internal Combustion Engine (ICE) can balance the electricity system amid growing renewable energy adoption.

Collaborative Path Forward

The synergy between environmentally friendly fiscal policies, technological innovation, and industrial commitment forms a solid foundation for Indonesia's energy transformation. With full government support and active industry participation, this marks a new chapter in Indonesia's energy journey - from fossil fuel dependence towards clean energy independence that is inclusive and equitable. This optimism confirms that the energy transition is not just an environmental agenda but a national vision to ensure a greener, stronger, and more energy-sovereign future for Indonesia.