Indonesia has the potential to generate up to US$1.8 billion in economic benefits by improving its renewable energy policies and accelerating clean energy development, according to a new report from the Asia Clean Energy Coalition (ACEC). 

The report, titled “Asia’s Clean Energy Breakthrough: Unlocking Corporate Procurement for Sustainable Growth”, reveals that demand for renewable electricity across the Asia-Pacific region is growing rapidly as global companies work to decarbonize their operations.

However, the available supply − particularly in Indonesia − falls significantly short of this demand. Despite having vast solar and wind potential, Indonesia still relies on fossil fuels for 81 percent of its electricity generation. The government’s plan to add 21 gigawatts of renewable energy by 2030 has seen minimal progress, with only a few projects currently under construction.

According to ACEC, increasing the renewable share in Indonesia’s electricity mix from 18 percent to 29 percent by 2030 could deliver substantial economic and environmental returns. These include the creation of nearly 140,000 new jobs, a US$1.4 billion increase in total worker income, and the reduction of 25 million tons of carbon dioxide emissions.

“On a broader scale, similar improvements in countries like Vietnam, South Korea, Japan, and Singapore could collectively raise regional GDP by US$26.86 billion and generate over 435,000 new jobs,” Suji Kang, ACEC Program Director, said on Wednesday, June 4, 2025.

However, several policy and regulatory obstacles remain. These include a lack of clear national direction on renewable energy, the absence of corporate procurement mechanisms, and unresolved ownership issues around renewable energy certificates.

The report recommends that Indonesia adopt more explicit renewable energy targets in its national policies and climate commitments, enable power wheeling to allow shared transmission infrastructure, implement Corporate Power Purchase Agreements (CPPAs), and provide legal clarity regarding REC ownership between PLN and private producers.

ACEC also stresses that comprehensive regulatory reform is essential to improve investor confidence and support the long-term sustainability of Indonesia’s clean energy transition.

Ollie Wilson, Head of RE100 and The Climate Group, emphasized the urgency of policy alignment.

“RE100 members are ready to invest in Asia’s energy transition, but their ambition must be matched by policymakers to accelerate the shift to clean energy at the scale and pace required.”he said.

RE100 is a global initiative bringing together the world’s most influential businesses committed to 100 percent renewable electricity.