Renewable Energy Sector Shows Bright Prospects for 2026

Government Targets and Current Status

The Indonesian government has set ambitious targets for renewable energy (RE) adoption, aiming for a national RE mix of 17-21% by 2026, as outlined in the Ministry of Energy and Mineral Resources' Strategic Plan for 2025-2029. Currently, the country stands at approximately 16% RE mix, indicating both progress and the remaining gap that needs to be addressed.

Driving Factors for Growth

Analysts from Pilarmas Investindo Sekuritas, such as Arinda Izzaty, maintain that RE companies have constructive fundamental prospects. The existing gap between the current RE mix and the government's target creates significant policy momentum. This is manifested through several key drivers:

1. Acceleration of RE power plant projects
2. Mandatory energy mix regulations
3. Green electricity procurement schemes implemented by PT Perusahaan Listrik Negara (PLN) and industrial sectors

Market Implications

The combination of government support and policy momentum is expected to create a favorable environment for RE companies to achieve positive growth in 2026. This regulatory push is likely to benefit emitters operating in the sector by creating new opportunities and potentially improving their financial performance.