Indonesia’s energy transition plan is no longer an abstract policy discussion. It is unfolding in real time, visible in flooded towns across Sumatra, in stressed river systems, and in forests that no longer absorb rainfall the way they once did. Climate change has stopped being theoretical. It now shapes everyday risk.
Recent floods in Sumatra followed a pattern that keeps repeating. Heavier rainfall meets degraded land. Watersheds stripped of forest cover fail to slow water flow. This is how global warming becomes local damage. Coal-fired power remains one of the main drivers of carbon emissions, trapping heat in the atmosphere and amplifying extreme weather. Cutting that footprint is no longer a symbolic gesture. It is about preventing the next disaster.
What Decarbonisation Actually Means
Decarbonisation means reducing carbon emissions by shifting energy production away from coal and other fossil fuels. The alternatives are familiar: solar, hydropower, wind, battery storage, and in limited cases gas. Biofuels also play a role, especially in Indonesia, where biodiesel blending has already reduced dependence on imported fuel.
The objective is practical rather than ideological. Emissions must fall fast enough to slow climate impacts, without destabilising the economy. This is where international frameworks like the Just Energy Transition Partnership come in. JETP was designed to help coal-heavy economies finance cleaner power systems while managing social and industrial risks.
The Energy Transition Plan and the Captive Power Blind Spot
One of the least understood parts of the system is the captive power sector. These are electricity plants built by industries for their own use, mainly in mining and metal processing zones. In Indonesia, captive power expanded rapidly alongside nickel smelting.
By 2024, captive power capacity reached about 25.9 gigawatts. More than 75% of that capacity is fuelled by coal. Another 11 gigawatts are already in development, and most of those projects are also coal-based. This matters because captive plants sit outside the public grid and were initially excluded from core decarbonisation plans.
Recent estimates suggest around $31 billion will be needed by 2030 to start cleaning up this sector, rising to roughly $92 billion by 2050. Without tackling captive power, broader emission targets become much harder to meet. Projections show that if reforms move ahead, renewables could rise from about 9% of captive generation in 2024 to 34% by 2030, over 55% by 2040, and more than 80% by mid-century. That shift alone could cut emissions by about 75% compared with a business-as-usual path.
Biofuels: Useful, Risky, and Incomplete
Biofuels are often framed as a bridge solution. Indonesia’s palm-based biodiesel programme has reduced fossil fuel use and supported energy security. But biofuels are not automatically sustainable. Expanding feedstock production can increase pressure on forests if land use is poorly regulated.
This is where energy policy intersects with biodiversity. North Sumatra is home to the critically endangered Tapanuli orangutan, a species found nowhere else on Earth. Its survival depends on intact forest corridors. Energy-intensive industries, mining expansion, and poorly planned biofuel cultivation all compete for the same land. An energy transition plan that ignores these trade-offs risks shifting environmental damage rather than reducing it.
Financing Gaps and Hard Choices
International support remains fragile. While large funding pledges exist, much of the financing comes as loans rather than grants. Some partners have stepped back, exposing how dependent climate cooperation can be on political shifts abroad. This leaves Indonesia facing an uncomfortable reality. External funding can help, but it will never cover the full cost.
The energy transition plan now sits at a decisive moment. Coal still dominates industrial power. Captive plants remain a major emissions source. Biofuels offer limited relief. Renewables need faster deployment and stronger integration. Delays will not stay neutral. They translate into deeper floods, further forest loss, and ecosystems pushed closer to collapse.
The transition is not optional. The only question left is whether it will be managed, or imposed by crisis.
