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Indonesia Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 98 Pages
  • December 2021
  • Region: Indonesia
  • Mordor Intelligence
  • ID: 5515512

The Indonesia renewable energy market is expected to grow at 21.44% from 10.5 GW in 2020 to 28.58 GW in 2026. During 2020, due to the COVID-19 pandemic, the market witnessed a halt, as the nation’s resources were focused toward defeating the COVID-19 pandemic. However, despite the pandemic, 2020 still registered a growth in renewable energy capacity, driven by solar and hydro. Factors such as increasing interest of the Indonesian Government toward renewable energy power generation and favorable government policies, are expected to drive the market. However, the country's dependence on fossil fuel for energy supply and increasing nymber of projects and investments in oil and gas sector, are expeted to restraint the country's renewable energy market.

Key Highlights

  • Solar energy due to its enormous potential in the country and government's support, is expected to witness a significant growth during the forecast period.
  • The integration of smart grids and battery energy storage systems (bess) to improve the quality of power and facilitate the variable wind power and solar PV projects is expectd to create several opportunities for the renewable energy market in the country.
  • Progressing renewable energy policies are expected to drive the Indonesia renewable energy market during the forecast period.

Key Market Trends

Solar Energy Expected to Witness a Significant Growth

  • The Indonesian government set a renewable energy target of 23% of the total electricity generation by 2025 and 31% by 2050. Currently, around 13% of power generation nationwide comes from renewable energy resources, mainly hydroelectric and some geothermal power production.
  • Indonesia is rich in solar power potential, with a potential of around 207 GW, according to the Ministry of Energy and Mineral Resources (MEMR). The development of renewable energy sources, including solar, is a priority that the Indonesian government is working toward.
  • According to the Ministry of Energy and Mineral Resources, in 2020, the total installed solar photovoltaic (PV) capacity was approximately 185.33 MW, representing an increase of 19.53% compared to 155.04 MW in 2019. The International Renewable Energy Agency (IRENA) states that Indonesia installed solar power capacity to grow significantly in scale by 2030, mainly driven by initiatives on the part of the government and PLN (a state-owned electricity company).
  • The IRENA identified the potential for Indonesia to deploy 47 GW of solar power capacity by 2030 as part of its 2017 Roadmap for a Renewable Energy Future (REmap) program report.
  • The Indonesian solar power capacity is growing at the utility-scale, on residential and commercial rooftops, and in off-grid settings to replace costly diesel-fueled generation, which is expected to drive solar power generation in the country.
  • For instance, in September 2021, the Ministry of Energy and Mineral Resources (MEMR) enacted the net metering legislation for rooftop PV that increased the net metering factor from approximately 0.65 to 100. Thus, solar PV system owners are likely to be given surplus credits for the power they inject into the grid, the same tariff rate used for buying electricity from the network. Such government initiatives are likely to increase the demand for solar energy in Indonesia during the forecast period.
  • Therefore, owing to the above points, solar energy segment is expected to witness a significant growth during the forecast period.

Progressing Renewable Energy Policies Expected to Drive the Market

  • After decades, the Indonesian New and Renewable Energy (NRE) has gained momentum in recent years. Indonesia is far behind in developing its new and renewable energy resources compared to other countries. The country’s rich oil and gas resources in the past have made NRE development a choice, not a priority.
  • The government of Indonesia started paying attention to the NRE sector when Indonesian oil and gas reserves began to show signs of depletion. The country became a net oil importer for the first time in 2005.
  • Consequently, the Energy Law of 2007 set in motion Indonesia’s plan to shift its reliance on fossil fuels, mainly coal and oil, toward more environmentally friendly and sustainable means like solar, wind, hydro, geothermal, and biomass.
  • The Ministry of Energy and Mineral Resources data shows that the country has enormous potential for geothermal energy at 23.9 gigawatts (GW) and more than 94 GW hydropower. The country also has a biomass potential of more than 32.6 GW and a biogas potential of 200,000 barrels per day.
  • Projections for renewable energies are estimated at 60.6 GW for wind energy, 208 GW for solar energy, and 17.9 GW for ocean and tidal energy. The potential could be substantially more immense with rapidly advancing renewable energy technology.
  • Therefore, owing to the above points, increase in the favorable policies set by the government are expected to drive the country's renewable energy market during the forecast period.

Competitive Landscape

The Indonesia renewable energy market is consolidated. Some of the key players in the market include Canadian Solar Inc., Sindicatum Renewable Energy Company Pte Ltd, Trina Solar Co. Ltd, PT Sumber Energi Sukses Makmur, and BCPG Public Company Limited (BCPG).

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1 Introduction
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2 Executive Summary3 Research Methodology
4 Market Overview
4.1 Introduction
4.2 Renewable Energy Mix, 2020
4.3 Renewable Energy Installed Capacity and Forecast in Gw, Till 2026
4.4 Recent Trends and Developments
4.5 Government Policies and Regulations
4.6 Market Dynamics
4.6.1 Drivers
4.6.2 Restraints
4.7 Supply Chain Analysis
4.8 PESTLE Analysis
5 Market Segmentation
5.1 Source
5.1.1 Solar
5.1.2 Wind
5.1.3 Hydro
5.1.4 Bioenergy
5.1.5 Other Types
6 Competitive Landscape
6.1 Mergers, Acquisitions, Collaboration and Joint Ventures
6.2 Strategies Adopted by Key Players
6.3 Company Profiles
6.3.1 Canadian Solar Inc.
6.3.2 Sindicatum Renewable Energy Company Pte Ltd
6.3.3 Trina Solar Ltd.
6.3.4 Pt Sumber Energi Sukses Makmur
6.3.5 Bcpg Public Company Limited (Bcpg)
7 Market Opportunities and Future Trends

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Canadian Solar Inc.
  • Sindicatum Renewable Energy Company Pte Ltd
  • Trina Solar Ltd.
  • PT Sumber Energi Sukses Makmur
  • BCPG Public Company Limited (BCPG)