Indonesia Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Market is Segmented by Source (Solar, Wind, Hydro, Bioenergy, and Other Sources).

Market Snapshot

Indonesia Renewable Energy - Market Summary
Study Period: 2019-2026
Base Year: 2021
CAGR: 21.44 %

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Market Overview

The Indonesian renewable energy market is expected to record a CAGR of 21.44% during 2022-2027. It is expected to have an installed capacity of 34.71 GW by 2027, up from 10.82 GW in 2021. In 2020, due to the COVID-19 pandemic, the market was halted as the nation’s resources were focused on handling the pandemic. However, despite the pandemic, the year 2020 still registered growth in renewable energy capacity, driven by solar and hydro. The increasing interest of the Indonesian government toward renewable energy power generation and favorable government policies are expected to drive the market. However, factors, such as the country's dependence on fossil fuels for energy supply and an increasing number of projects and investments in the oil and gas sector, are expected to restrain the country's renewable energy market.

  • Solar energy, due to its enormous potential in the country and the government's support, is expected to witness significant growth during the forecast period.
  • The integration of smart grids and battery energy storage systems (BESS) to improve the quality of power and facilitate the variable wind power and solar PV projects is expected to create several opportunities for the renewable energy market in Indonesia.
  • Progressing renewable energy policies are expected to drive the Indonesian renewable energy market during the forecast period.

Scope of the Report

The scope of the Indonesian renewable energy market report includes:

Source
Solar
Wind
Hydro
Bioenergy
Other Sources

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Key Market Trends

Solar Energy Is Expected to Witness Significant Growth

  • The Indonesian government set a renewable energy target of 23% and 31% of the total electricity generation by 2025 and 2050, respectively. Currently, around 13% of power generation nationwide comes from renewable energy resources, mainly hydroelectric and geothermal power production.
  • Indonesia is rich in solar power with a potential of around 207 GW, according to the Ministry of Energy and Mineral Resources (MEMR). The Indonesian government is prioritizing the development of renewable energy sources, including solar.
  • According to the Ministry of Energy and Mineral Resources, in 2020, the total installed solar photovoltaic (PV) capacity was approximately 185.33 MW, representing an increase of 19.53% compared to 155.04 MW in 2019. The International Renewable Energy Agency (IRENA) states that Indonesia is installing solar power capacity to grow significantly in scale by 2030, mainly driven by initiatives by the government and PLN (a state-owned electricity company).
  • The IRENA identified the potential for Indonesia to deploy 47 GW of solar power capacity by 2030, as part of its 2017 Roadmap for a Renewable Energy Future (REmap) program report.
  • The Indonesian solar power capacity is growing at the utility-scale, on residential and commercial rooftops, and in off-grid settings to replace costly diesel-fueled generation, which is expected to drive solar power generation in the country.
  • In September 2021, the Ministry of Energy and Mineral Resources (MEMR) enacted the net metering legislation for rooftop PV that increased the net metering factor from approximately 0.65 to 100. Thus, solar PV system owners are likely to be given surplus credits for the power they inject into the grid, the same tariff rate used for buying electricity from the network. Such government initiatives are likely to increase the demand for solar energy in Indonesia during the forecast period.
  • Therefore, due to such factors, the solar energy segment is expected to witness significant growth during the forecast period.
Indonesia Renewable Energy Market - Solar Energy Installed Capacity

Progressing Renewable Energy Policies Are Expected to Drive the Market

  • After decades, the Indonesian New and Renewable Energy (NRE) has gained momentum in recent years. Indonesia lags in developing its new and renewable energy resources compared to other countries. The country’s rich oil and gas resources in the past have made NRE development a choice instead of a priority.
  • The government of Indonesia started paying attention to the NRE sector when Indonesian oil and gas reserves started depleting. The country became a net oil importer for the first time in 2005.
  • Consequently, the Energy Law of 2007 set in motion Indonesia’s plan to shift its reliance on fossil fuels, mainly coal and oil, toward more eco-friendly and sustainable means like solar, wind, hydro, geothermal, and biomass.
  • The Ministry of Energy and Mineral Resources data show that the country has enormous potential for geothermal energy at 23.9 GW and more than 94 GW hydropower. The country also has a biomass potential of more than 32.6 GW and a biogas potential of 200,000 barrels per day.
  • Projections for renewable energies are estimated at 60.6 GW for wind energy, 208 GW for solar energy, and 17.9 GW for ocean and tidal energy. The potential could be substantially more immense with rapidly advancing renewable energy technology.
  • Therefore, due to such factors, increasing policies set by the government are expected to drive the country's renewable energy market during the forecast period.
Indonesia Renewable Energy Market- Power Generation Mix

Competitive Landscape

The Indonesian renewable energy market is consolidated. Some of the key players in the market include Canadian Solar Inc., Sindicatum Renewable Energy Company Pte Ltd, Trina Solar Co. Ltd, PT Sumber Energi Sukses Makmur, and BCPG Public Company Limited (BCPG).

Recent Developments

  • In September 2021, the World Bank approved a USD 380-million loan to develop Indonesia’s first pumped-storage hydropower plant. The financing is expected to support the construction of the Upper Cisokan pumped storage hydropower plant, located between Jakarta and Bandung, with an expected capacity of 1,040 MW.
  • In November 2020, Indonesia had a B30 (30% biodiesel blending) mandate for its petrol and diesel usage. Though the mandate was introduced in early 2020, it struggled to be implemented due to the drop in fossil fuel prices, leading to unfavorable blending economics.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Renewable Energy Mix, 2020

    3. 4.3 Renewable Energy Installed Capacity and Forecast in GW, till 2026

    4. 4.4 Recent Trends and Developments

    5. 4.5 Government Policies and Regulations

    6. 4.6 Market Dynamics

      1. 4.6.1 Drivers

      2. 4.6.2 Restraints

    7. 4.7 Supply Chain Analysis

    8. 4.8 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Source

      1. 5.1.1 Solar

      2. 5.1.2 Wind

      3. 5.1.3 Hydro

      4. 5.1.4 Bioenergy

      5. 5.1.5 Other Sources

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers, Acquisitions, Collaborations, and Joint Ventures

    2. 6.2 Strategies Adopted by Key Players

    3. 6.3 Company Profiles

      1. 6.3.1 Canadian Solar Inc.

      2. 6.3.2 Sindicatum Renewable Energy Company Pte Ltd

      3. 6.3.3 Trina Solar Ltd

      4. 6.3.4 PT Sumber Energi Sukses Makmur

      5. 6.3.5 BCPG Public Company Limited (BCPG)

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Indonesia Renewable Energy Market market is studied from 2019 - 2026.

The Indonesia Renewable Energy Market is growing at a CAGR of 21.44% over the next 5 years.

Canadian Solar Inc., Sindicatum Renewable Energy Company Pte Ltd, Trina Solar Co. Ltd, PT Sumber Energi Sukses Makmur, BCPG Public Company Limited (BCPG) are the major companies operating in Indonesia Renewable Energy Market.

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