Rethinking renewable energy targets and electricity sector reform in Indonesia: a private sector perspective

Renewable energy targets announced in 2014 present an opportunity to reform Indonesia's electricity sector which is dominated by fossil fuels. In this paper we discuss Indonesia's current renewable energy policies and future outlook for achieving the targets. This paper serves as a literature review of Indonesia's changing energy policy landscape, as part of a broader research investigating renewable energy targets and the role of the private sector. Despite Indonesia's wealth of renewable energy resources, numerous studies have identified multiple constraints to the development of renewable energy, including geographical, institutional and investment factors. Influential groups are calling for the Indonesian Government to put in place a clear policy framework that facilitates private sector investment. Therefore, interventions to facilitate investment in energy infrastructure in Indonesia must address the monopolised power market system that oversees a changing, complex malaise of electricity pricing regulations which make investment risky and uncertain. This study will enrich the existing literature on renewable energy policy which emphasises the importance of engaging the private sector. It is based on a rigorous qualitative assessment of Indonesia's changing policy that affects the progress of the renewable energy targets. The lessons from Indonesia's experience may provide insights for policymakers notably in developing countries