GER-IDN Cooperation Priorities
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Key Areas of the Cooperation
GER-IDN Cooperation Priorities
RE Expansion
Indonesia has achieved near-universal electrification, with over 99% of its population now connected to the grid. However, renewable energy (RE) constitutes only approximately 15% of total installed capacity, despite the country’s abundant solar, wind, hydro, and geothermal potential. To accelerate the transition towards sustainable energy, Indonesia has set ambitious targets, including 44% on-grid RE by 2030 under the Just Energy Transition Partnership (JETP), 76% RE by 2034 as outlined in the Electricity Supply Business Plan (RUPTL), and net-zero emissions by 2060 per the National Energy Plan (RUKN). Key challenges include establishing an enabling regulatory and financial environment to incentivise public and private sector adoption of innovative, locally appropriate RE solutions. To support Indonesia in meeting these objectives, our cooperation provides integrated financial and technical assistance to both government and private stakeholders. This includes facilitating regulatory reforms (feed-in tariffs, power purchase agreements, and carbon pricing mechanisms) while strengthening quality infrastructure for solar and wind value chains through results-based financing. We assist state-owned enterprises in developing large-scale hydropower (e.g., Bakaru, Sawangan, Kumbih) and geothermal projects (e.g., Kamojang, Mataloko, Ulumbu), complemented by capacity-building programmes on power system planning, environmental and social safeguards, and gender mainstreaming. Furthermore, we promote innovative RE technologies tailored to Indonesia’s archipelagic context, including biomass utilisation, off-grid solar hybrid systems, and green hydrogen applications. Knowledge-sharing via South-South and Triangular Cooperation ensures regional and global dissemination of Indonesia’s renewable energy advancements.
Grid Extension
Indonesia’s archipelagic geography presents unique challenges in connecting its 600+ power grids, particularly in linking renewable energy supply zones with high-demand regions. The country aims to achieve 44% renewable energy (RE) by 2030 (Just Energy Transition Partnership) and a net-zero power system by 2050, supported by plans to expand the transmission grid by 47,758 km and develop an inter-island super-grid. Key barriers include outdated grid planning models designed for fossil-fuel dispatchability, which must adapt to variable renewable energy (VRE) such as solar and wind. Germany’s cooperation focuses on modernising Indonesia’s power system through grid flexibility, infrastructure upgrades, and institutional capacity building. Flagship initiatives include the Green Energy Corridor Sulawesi, a high-voltage transmission backbone to transport hydropower from northern to southern demand centres. Technical assistance to PLN covers grid studies, VRE integration, and operator training, while targeted programmes in Java-Bali explore coal plant retrofitting for flexibility. Results-based financing rehabilitates and expands distribution grids in Java, Sulawesi, and Nusa Tenggara, improving access and reliability.
Energy Efficiency
As ASEAN’s largest economy and the world’s 16th-largest, Indonesia seeks to sustain 8% annual GDP growth and achieve full industrialisation by 2045 under its Vision 2045 agenda. However, energy demand is projected to triple by 2060, with energy intensity remaining high. To align economic growth with climate commitments, Indonesia has set a target of reducing energy intensity by 1% annually and mandates energy management for consumers exceeding 6,000 tonnes of oil equivalent (TOE). Key challenges include strengthening the regulatory framework for energy efficiency, ensuring cross-sector compliance (industry, buildings, cooling), and promoting cost-saving technological innovations.
Germany’s cooperation supports Indonesia in reducing energy consumption, particularly in high-demand sectors like industry, buildings, and fisheries. Our initiatives include:
- Industrial decarbonisation: Partnering with Indonesian industries to adopt energy-efficient technologies and management systems, facilitating compliance with national regulations while fostering investor and technology provider matchmaking.
- Green buildings: Supporting large-scale green building projects through energy audits, feasibility studies, and capacity-building for energy management professionals.
- Policy frameworks: Collaborating with Indonesian ministries (MEMR, MoI, KKP) to advance regulatory reforms for energy efficiency and industrial decarbonisation.
Energy Regulations
Indonesia has achieved near-universal electrification, yet renewable energy accounts for only 15% of installed capacity. To accelerate the energy transition, the country has set ambitious targets, including 44% renewable energy (RE) by 2030 (Just Energy Transition Partnership, JETP) and 76% by 2034 (national electricity plan, RUPTL). However, translating these goals into actionable policies requires an enabling regulatory ecosystem that attracts investment, mandates efficiency, and mitigates socio-economic trade-offs for a just transition.
Germany’s 30-year energy partnership with Indonesia focuses on policy frameworks to support RE scaling, grid modernisation, and efficiency. Collaborating with key ministries (MEMR, Bappenas, MoF) and subnational actors, we provide:
- Policy advisory and capacity building for RE integration, grid expansion, and demand-side management.
- Fiscal and carbon pricing reforms to bridge financing gaps, including de-risking instruments for private investment.
- Just transition planning in coal-dependent regions, prioritising community resilience and economic diversification.
