The Renewable Energy–Accelerated Transition in Indonesia (RE-ACT) program supports the Government of Indonesia and the Provincial Governments in accelerating the country’s transition to renewable energy, building on its vast potentials like solar power, hydropower, and wind.

The project supports the adjustment of Indonesia’s policy framework to address policy hurdles and create an enabling environment to facilitate and incentivize private investment in the renewable energy sector.

The RE-ACT project facilitates reviewing and implementing Regional Energy Plans (RUED) in Papua, West Papua, and West
Nusa Tenggara through the Provincial Energy Forum Platform. This is a crucial step towards meeting the National Energy Plans (RUEN).

The project aims to accelerate the country’s transition from fossil fuels to renewable energy, enabling the achievement of Indonesia’s renewable energy targets and a more ambitious Nationally Determined Contribution (NDC). The project supports the Ministry of Energy and Mineral Resources (MEMR) and the Ministry of National Development Planning/Bappenas to shift policy settings to enable:

– Faster growing contribution form renewable energy to the energy mix

– Higher ambition to reach national emission reduction targets

This is further supported through capacity building, awareness raising, and the deployment of innovative financial and fiscal mechanisms among project stakeholders, especially public sector employees. Embracing renewable energy will reduce greenhouse gas emissions, fulfill NDC targets, create new job opportunities, stimulate economic growth, and enhance energy security

Indonesia faces many challenges to meet its increasing energy demand, provide equitable access to electricity and realize its commitment to significantly reduce greenhouse gas emissions. To achieve its emission reduction targets by 2030, as stated in the NDC, as well as the 23% renewable electricity mix target by 2025 and 31% by 2050, Indonesia is focusing on a broad range of options in the energy sector.

Estimates suggest that the country has a renewable energy potential of over 400 GW, but only a small percentage is currently used. The reliance on fossil fuels has steadily increased carbon emissions from the electricity sector in the past decades. The current primary energy mix consists of 39.69% coal, 29.91% petroleum, 17.11% natural gas, and 19.39% new and renewable energy.

While the Government of Indonesia has committed to supporting renewable energy in national development targets and policies, investment in renewable energy projects has not yet come to fruition at scale. Among the main barriers to investments are regulatory uncertainties, fuel subsidies, low electricity tariffs, and cheap coal resources. In addition, although electrification has improved nationwide, many regions remain underserved.

This project aims to achieve the following outcomes:

– Reduced fossil fuel share in the national energy mix

– Increased ambition targets in the Nationally Determined Contributions (NDC)

– More favorable and coherent renewable energy policies and regulations

– Increased rate of public and private sector investments and appetite for renewable energy

– Strengthened institutional capacity through skill and knowledge enhancement