Indonesia's Dual Energy Strategy Building a Green Future on Solid Foundations

A New Milestone for Indonesia’s Energy: Where Green Ambition Meets Sovereign Reality

On Thursday, June 26, 2025, Indonesia entered a monumental new chapter in its energy policy journey. The moment was marked by a grand inauguration led directly by President Prabowo Subianto, via a video conference centered at the Blawan Ijen Geothermal Power Plant (PLTP) in Bondowoso, East Java. The nation witnessed the simultaneous launch of 55 renewable energy power plant projects across 15 provinces. Yet this event was far more than a celebration of green energy it was also accompanied by the announcement of an increase in oil production from the Cepu Block, highlighting a mature, pragmatic, and forward-thinking national energy strategy.

This was not just a ceremony but a manifestation of a dual-track energy policy, carefully crafted to address Indonesia’s present and future needs. On one hand, the government is aggressively accelerating the energy transition, propelling the country toward a sustainable and environmentally friendly future. On the other, it remains firmly grounded in current energy demands, strengthening the foundation of national energy security through the optimization of proven conventional resources. This narrative of balance reflects how a major nation like Indonesia navigates the complexities of 21st-century energy challenges balancing future idealism with today’s pragmatism. The decision to inaugurate tens of trillions of rupiah worth of clean energy projects alongside a boost in oil production is not a contradiction; it is a strategic statement that energy independence requires two firm steps one planted in the future, and the other in the present. This moment serves as the launching point for a deeper reflection on Indonesia’s new energy direction, its implications, challenges, and the opportunities ahead.

The Echo of a Green Revolution: A Closer Look at IDR 25 Trillion in RE Projects

The launch of 55 renewable energy projects signifies a massive investment of IDR 25 trillion in Indonesia’s clean energy future. This figure is more than just a statistic it represents foundational capital driving the wheels of the green economy. With an added capacity of 379,7 megawatts, these projects will enrich the national energy mix, reduce dependency on volatile fossil based power generation, and enhance electricity supply stability across the archipelago. Their economic impact is designed to be both direct and widespread, contributing approximately IDR 426,5 billion annually in non tax state revenues fresh capital that can be reinvested in broader development programs.

Beyond macroeconomic impact, the ripple effect is felt at the grassroots level. An estimated 9.500 new jobs will be created, providing opportunities for engineers, technicians, and construction workers across regions. This is a tangible expression of development driven by employment. The government’s commitment to empowering local industry is reflected in the 40% Local Content Requirement (TKDN), a powerful stimulus for the domestic manufacturing sector to produce components such as solar panels, geothermal turbine parts, and more driving a positive domino effect across the national supply chain.

The geographic spread of these projects spanning 15 provinces from west to east is central to the narrative of equitable development. Among the flagship initiatives are geothermal power plants such as PLTP Ijen, Ulubelu in Lampung, and Muara Laboh in West Sumatra. Geothermal utilization is a strategic move, given that Indonesia holds roughly 40% of the world’s geothermal reserves. These plants will serve as stable baseload power generators. Meanwhile, 47 solar power plants (PLTS) are being built to electrify remote and island regions, providing solutions to long-standing access gaps and delivering energy justice to all Indonesians.

A Firm Foundation: Cepu Block’s Strategic Role in Energy Security

While renewable energy takes the spotlight, the government also announced a 30.000 barrel per day increase in oil production from the Cepu Block a vital move in maintaining energy balance. This underscores a wise policy direction avoiding blind euphoria while anchoring the transition on stable foundations to ensure long-term security. With the increase, Cepu now contributes approximately 25% of the country’s total oil production. This plays a vital role in reducing crude oil imports, one of Indonesia’s major sources of foreign exchange outflow.

Financially, Cepu’s contribution to the state is significant. With a total investment of USD 4 billion, it has already delivered over USD 30 billion in state revenue funds that indirectly help fuel the energy transition. The government smartly leverages these conventional energy earnings to finance large scale renewable investments. This pragmatic strategy ensures that the green agenda is not hindered by budget constraints but can be executed with consistency and scale.

Another point of pride is human capital empowerment. The fact that 99% of the highly technical workforce at the Cepu project consists of Indonesian nationals reflects a successful transfer of knowledge and national capacity-building. This shows that Indonesia’s talent is capable of managing one of its most strategic energy assets to world-class standards. The Cepu Block thus stands not only as a pillar of energy security and state revenue but also as a breeding ground for future Indonesian oil and gas professionals building a lasting legacy of expertise.

Indonesia’s New Energy Direction: Sovereign, Equitable, and Clean

President Prabowo Subianto’s speech during the recent energy inauguration event laid out a bold, long-term strategy that places energy as a central pillar of national sovereignty. One key message was the urgency of energy self-sufficiency. Energy resilience is no longer just an economic issue it is a prerequisite for true independence in the 21st century. As such, every policy whether in renewables or oil and gas must aim to reduce foreign dependence. Energy sovereignty is the unifying principle behind this new national agenda.

Another ambitious goal announced by the President is full electrification of all Indonesian villages within the next four years. This is not merely an infrastructure project but a concrete commitment to social justice. Solar energy has been chosen as the main technology modular, flexible, and quick to deploy making it ideal for electrifying remote regions not served by the conventional grid. This initiative is expected to trigger rapid growth in the domestic solar industry and open up new economic opportunities nationwide.

To support all these efforts, the President stressed the importance of clean and transparent governance. He called on all public officials and SOEs in the energy sector to uphold integrity and work efficiently. In the context of multi-trillion-rupiah energy projects, this is a guarantee that every rupiah will be spent for the people’s benefit. For investors, this sends a clear positive signal building trust and creating a healthy investment climate. This speech offers more than just direction; it is a renewed spirit for transforming the national energy sector: sovereign in supply, equitable in access, and clean in governance.

A Horizon Full of Opportunity: Implications for Industry and Workforce

This inauguration is not the end of a story, but the beginning of a new era that will reshape Indonesia’s economy, industry, and workforce. For investors and businesses, the gateway to Indonesia’s renewable energy ecosystem is now wide open. Opportunities are no longer limited to large-scale generation projects but extend across the entire supply chain. With a 40% local content target, domestic manufacturers are called to produce solar panels, inverters, batteries, turbines, and more. Engineering, Procurement, and Construction (EPC) companies will be in high demand along with technical consultants providing feasibility studies and strategic assessments.

The financial sector, too, is presented with a golden opportunity to become a driving force in this transition. Green bonds, green loans, and blended finance schemes are emerging as key instruments to attract long-term, low-cost funding for renewable energy initiatives. International development partners such as the World Bank, Asian Development Bank (ADB), and the Just Energy Transition Partnership (JETP) are offering technical grants, concessional loans, and risk guarantees. Domestically, the Indonesia Investment Authority (INA) and national banks are building green portfolios to support the shift. To accelerate investment, the government is also offering incentives such as tax holidays, super deduction tax, and import duty exemptions for renewable energy components. These financing mechanisms form the backbone of Indonesia’s clean energy push.

For professionals and the broader workforce, this marks the onset of a major employment wave. The 9.500 jobs created by the newly inaugurated renewable projects are just the beginning. In the coming years, Indonesia will need tens of thousands of engineers, technicians, project managers, and maintenance specialists with renewable energy expertise. This is a call for education institutions to realign curricula, and for conventional energy professionals to upskill and stay relevant in this new era. Of course, challenges remain. Regulatory certainty on energy pricing, grid modernization for intermittent sources, and land acquisition processes must all be addressed. Yet the direction is crystal clear. June 26, 2025, will be remembered as the day Indonesia firmly chose its future one in which energy resilience goes hand in hand with environmental stewardship, where national self-reliance is built upon indigenous resources, and where every citizen benefits from the light of development.