espite an influx of climate finance pledges and supportive policy signals, Indonesia’s energy transition continues to face structural bottlenecks that limit real progress on the ground.
Paul Butarbutar, head of the Just Energy Transition Partnership (JETP) secretariat, highlighted persistent delays in renewable energy procurement by state-owned electricity company PLN, particularly for small and off-grid projects.
While recent regulatory reforms, such as updated local content requirements and a new framework for power purchase agreements (PPAs), offer some optimism, he noted that execution remains slow.
“We are still waiting for PLN to issue PPAs that reflect the new regulation,” he said at an event hosted by Eco-Business in Jakarta on June 24, adding that predictable, quota-based procurement would give developers more confidence.
Paul also pointed out that before 2017, developers could approach PLN directly, allowing for quicker project approvals. Today, projects must go through formal tenders, which are often irregular and lack transparency.
Moreover, legacy fossil fuel contracts complicate the transition. Many of PLN’s coal-based PPAs contain provisions that allow cost pass-throughs from new government policies, such as carbon taxes, effectively increasing state subsidies.
For the transition to succeed, Paul emphasized that PLN must not only accelerate renewable procurement but also prioritize inclusive access and ensure project viability across all regions.
