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Energy Subsidies in Indonesia

The GSI program of work for Indonesia undertakes research and policy engagement on subsidies for fuel consumers and producers, as well as breaking down barriers to renewable energy and ensuring long-term, sustainable reform processes.

Research

Objectives
  • Reduce expenditure on fossil fuel subsidies that promote unsustainable environmental and social impacts
  • Reform subsidies to level the playing field for clean energy
  • Improve the fair social distribution of subsidy expenditure
  • Build a greater understanding of the negative health impacts of fossil fuels, and how these are exacerbated by fossil fuel subsidies
Collaborations

In carrying forward this work, the Global Subsidies Initiative has collaborated with a number of organizations, including Tim Nasional Percepatan Penanggulangan Kemiskinan, Universitas Gadjah Mada, European Climate Foundation, ENERGIA, and the Embassies of Denmark and Sweden.

No New Coal in Java: Indonesia takes a first step at phase-out

October 17, 2017 | Richard Bridle
Indonesia’s Ministry of Energy and Mineral Resources Ignasius Jonan recently announced that there would be no new coal plants in Java. The announcement heralds, at last, a step away from the coal-dominated future that had been proposed. Why has this decision been taken? And how should Indonesia seek to power its economy with coal now taken off the menu?

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Health Organizations, Help Indonesia Kick the Coal Habit

September 18, 2017 | Erica Petrofsky
Indonesians’ lungs have been exposed to significant pollution in the past few years, from forest fire haze to increasing amounts of motor vehicle exhaust. A study looking at the greater Jakarta area attributed 3,700 premature deaths per year to air pollution from 2012 to 2015. The national and regional governments of Indonesia are trying to tackle some of these issues through, for example, banning land clearance by burning and improving public transit. But there’s one area, power generation, where current government policies are on course to make Indonesia’s air pollution worse.

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How Indonesia Might Turn Its Back on a Future of Cheaper Renewable Electricity

August 9, 2017 | Lourdes Sanchez
Short-term gain can lead to long-term pain. This might be the case with Indonesia’s recent decision to bet on coal as its preferred source to supply reliable and affordable electricity. Indonesia’s decision comes at a time when the rest of the world is moving in the opposite direction: countries are increasingly switching from coal to renewables and encouraging competition between power generators to obtain the best prices.

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India's ambitious new energy policy draft tries to bridge dreams, reality

June 13, 2017 | Bloomberg | Karlis Salna
What’s good for Indonesia’s fiscal chiefs is proving a headache for the central bank. President Joko Widodo’s push to phase out electricity subsidies that have drained the budget of billions of dollars is boosting prices in the economy and threatening the bank’s 3 percent to 5 percent inflation target.

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The True Cost of Coal and Renewables in Indonesia

June 13, 2017 | Richard Bridle
Indonesia is facing an energy crunch as demand for electricity rises across the country. The country is one of the world’s largest coal producers, and is developing plans for an additional 35 gigawatts (GW) of new coal-fired power stations. Proponents of the development claim that coal is the cheapest source of energy available.

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