Indonesia’s energy transition and its contradictions: Emerging geographies of energy and finance

Abstract

Since 2015, the Indonesian solar electricity sector has witnessed unprecedented attention from international investors and developers, with planned solar photovoltaic (PV) projects announced in 2017 set to increase existing installed capacity from 9 megawatts (MW) to over 240 MW. This article examines the emerging geographies of renewable energy generation resulting from the rapid influx of foreign investment into Indonesia’s solar PV sector. While foreign investment may prove successful in increasing the country’s solar PV capacity, it may also produce several contradictory outcomes for Indonesia’s energy transition. Efforts to reconcile demands of risk-averse, profit-driven investors and developers with the needs of the approximately 25 million Indonesians who currently lack access to electricity has resulted in a geography of renewable energy generation characterized by large-scale centralized generation facilities that constrain opportunities for local ownership and control over the energy system. The result – a major contradiction when viewed through the lens of Indonesia’s energy transition development objectives – is not only a flow of economic benefits out of the country and limited improvement in energy access for much of the country, but a missed opportunity in terms of maximizing the socially and politically transformative potential a broader energy transition may entail.