Indonesia Has 333 GW of Financially Feasible Renewable Energy Projects
JAKARTA, investortrust.id – The Institute for Essential Services Reform, or IESR, a Jakarta based energy think-tank, has identified financially feasible renewable energy project locations across Indonesia, leveraging advancements in technology and the latest economic indicators. Solar, wind, and hydro power have been highlighted as the backbone of a competitive energy transition.
According to IESR’s study, there are 1,500 suitable sites for the development of ground-mounted solar power plants, onshore wind farms, and small-scale hydroelectric plants.
IESR Executive Director Fabby Tumiwa stated that these sites have a total renewable energy potential of 548.5 GW. Based on this finding, IESR conducted a financial feasibility analysis, assessing key financial metrics such as the Equity Internal Rate of Return (EIRR).
The study concluded that 333 GW from 632 utility-scale renewable energy projects are financially viable under Indonesia’s prevailing tariff structures and project financing mechanisms. This includes 165.9 GW of ground-mounted solar power, 167.0 GW of onshore wind power, and 0.7 GW of small-scale hydro power.
"Despite Indonesia’s vast potential in solar, wind, and hydro energy, its utilization remains low. One of the key challenges is the perception of low reliability due to the intermittent nature of solar and wind power," Fabby Tumiwa stated on Sunday, March 2, 2025.
However, he emphasized that with advancements in battery energy storage systems and grid-forming inverters, solar and wind—boasting a technical potential of 3.4 TW—could become the backbone of Indonesia’s energy transition. Moreover, this transition aligns with the country’s ambition of achieving 8% economic growth and energy self-sufficiency.
"Renewable energy and storage technologies are becoming increasingly sophisticated and affordable. In several countries, the combination of solar and wind with dispatchable battery storage has led to electricity prices that are more competitive than gas-fired and coal-fired power plants," he explained.
Fabby further noted that shifting to clean energy not only reduces emissions but also serves as an economic growth strategy. The transition could spur job creation, particularly in solar manufacturing, as demand for renewable energy solutions continues to rise.