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Despite PLN green push, Indonesian government taking different approach

January 12, 2021

Saur Energy:

No country is immune to the rapid disruption occurring in the global energy sector. New technological innovations in both supply and demand have changed the technical versus economic discourse. Renewables are now cheaper than any fossil fuel in most parts of the world. And Indonesia’s no exception to this transition as per IEEFA.

The sharp decline in power demand due to slower economic growth has forced the State Electricity Company (PLN) to carefully rethink its investment plans. In the last semester, PLN began rebranding itself as a green(er) utility company through a number of so-called breakthrough initiatives. Going forward, the state-owned utility company is committed to providing clean and sustainable energy for Indonesia in line with government expectations, a measure likely to be attractive to ESG (environmental, social and governance) investors.

Despite this commitment, the government appears to favour the opposite strategy. While nations across the globe are competing to accelerate the development of inherently deflationary technologies in solar, wind and storage, the Indonesian government seems to be focusing on centuries-old technologies that have previously failed to gain market share. 

[Staff Report]

More: Neglecting Renewables Could Cost Indonesia’s Energy Edge: IEEFA

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