The development of infrastructure supporting renewable energy is a crucial step in Indonesia’s energy transition toward a more sustainable future, according Logistics and Forwarders Association (ALFI/ILFA).
ALFI underlined that many of the country’s renewable energy sources are located in remote regions, especially in Eastern Indonesia, where infrastructure is less developed compared to Western Indonesia.
Talking in a press statement on Tuesday, February 11, 2025, Yukki Nugrahawan Hanafi, ALFI/ILFA Chairman of the Advisory Board, explained that Indonesia has a significant opportunity to reduce its dependence on fossil fuels and increase the use of renewable energy. ALFI has consistently supported the Government’s efforts through the Ministry of Energy and Mineral Resources (ESDM) to drive the transformation and development of renewable energy.
“However, considerable investment is required, particularly in the development of transportation infrastructure and logistics connectivity, to support the renewable energy industry,” Yukki explained.
As the world’s largest archipelagic nation, Indonesia possesses enormous potential for renewable energy development. With abundant natural resources—such as solar, wind, hydropower, and geothermal—Indonesia is strategically positioned to enhance energy security and decrease its reliance on fossil fuels.
“There are several renewable energy sources that can be harnessed effectively. We can tap into solar, wind, hydropower, and geothermal energy,” he said.
He pointed out that regions like East Nusa Tenggara (NTT), with lower rainfall compared to other areas, are ideal for solar energy development through solar power plants (PLTS). In South Sulawesi and West Nusa Tenggara, large wind potentials could be utilized for wind energy development.
“Indonesia’s many rivers and elevated areas are also suitable for hydroelectric power plants (PLTA). Moreover, one of the greatest potentials lies in the development of geothermal energy, as Indonesia is home to some of the largest geothermal reserves in the world, which can be harnessed for power generation,” Yukki added.
Despite this, he noted that the full potential has yet to be realized, with transportation and logistics infrastructure being one of the key obstacles.
“Many geothermal resources in Eastern Indonesia remain underutilized due to their remote locations and the lack of adequate transportation access. The development of this infrastructure is essential,” Yukki said.
According to him, the development of transportation infrastructure is crucial because the entire process—from exploration and development to the distribution of renewable energy—requires efficient logistical support.
“Many renewable energy-rich locations are in remote areas, making the construction of road access and other transportation infrastructure vital for the development of power plants and energy distribution,” he explained.
Yukki also highlighted that transportation infrastructure is not only important for exploration but will also be essential for energy distribution, which plays a pivotal role in achieving the national economic growth target set by the Prabowo-Gibran administration. The Government aims to grow the Indonesian economy by 8% in the coming years.
“Ultimately, one of the main priorities in renewable energy development is ensuring that the energy produced is distributed effectively across Indonesia for the benefit of all its people,” Yukki emphasized.
PRIVATE SECTOR PARTICIPATION
The Indonesian government has introduced a range of policies to support renewable energy development, including the National Energy General Plan (RUEN) and goals for reducing greenhouse gas emissions.
To achieve these objectives, Yukki stressed that collaboration between the government, the private sector, and communities is essential. He outlined three strategic steps to accelerate progress, first is providing incentives. The government should offer incentives to attract investment in the renewable energy sector. These could include tax breaks, subsidies for technology purchases, and streamlined licensing processes for renewable energy projects.
Second, Public-Private Partnerships. Given the substantial capital needed for renewable energy infrastructure, Yukki recommended fostering cooperation between the government and the private sector through partnership schemes. Such collaboration would help expedite infrastructure development.
Third, Enhancing Human Resources. Developing a skilled workforce with expertise in renewable energy technologies is crucial for supporting the sector’s growth and ensuring the sustainability of the energy transition.
By taking these steps, Yukki believes Indonesia can maximize its renewable energy potential, reduce its reliance on fossil fuels, and build a sustainable energy future for all.