Open Access

ARTICLE

Navigating TheRenewable Energy Transition In Indonesia: Institutional Dynamics, Policy Reforms, And The Political Economy Of Energy Security

Issue Vol. 2 No. 02 (2025): Volume 02 Issue 02 --- Section Articles --- Published Date: 2025-12-21

Abstract

Indonesia’s energy sector stands at a critical crossroads shaped by rising energy demand, long-standing dependence on fossil fuels, complex subsidy regimes, and growing international and domestic pressure to accelerate renewable energy deployment. As Southeast Asia’s largest economy and one of the world’s most populous countries, Indonesia’s approach to energy security and renewable energy transition has implications that extend well beyond its national borders. This article develops a comprehensive, theoretically grounded, and empirically informed analysis of Indonesia’s renewable energy transition, with particular emphasis on the political economy of energy security, institutional design, subsidy reform, and regulatory evolution. Drawing strictly and exclusively on the provided body of literature, the article synthesizes insights from energy economics, political science, institutional theory, and development studies to examine why renewable energy deployment in Indonesia has historically lagged behind its technical potential and how recent policy shifts—particularly in rooftop solar regulation and broader energy governance—signal a tentative but consequential turning point. Rather than offering a narrow policy evaluation, the article situates Indonesia’s renewable energy trajectory within broader debates on energy security, democratic institutions, resource politics, and state capacity. The analysis elaborates in detail how electricity subsidies, social equity concerns, regulatory uncertainty, and entrenched fossil fuel interests interact to shape renewable investment outcomes. At the same time, it critically engages with counter-arguments that emphasize market readiness, technological constraints, and demand-side limitations. Methodologically, the article adopts a qualitative, integrative research design based on systematic literature interpretation and institutional analysis, enabling a nuanced exploration of causal mechanisms without relying on quantitative modeling or visual representations. The findings suggest that renewable energy deployment in Indonesia is best understood not as a purely technical or economic challenge, but as a deeply political and institutional process conditioned by energy security priorities, distributional concerns, and state–market relations. The discussion highlights persistent limitations, including policy inconsistency and administrative fragmentation, while also identifying future pathways for reform grounded in regulatory credibility, inclusive energy governance, and long-term strategic planning. By offering an extensive and original synthesis, this article contributes to the scholarly literature on renewable energy transitions in emerging economies and provides a theoretically rich foundation for future research on Indonesia’s evolving energy landscape.

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