December 1, 2024, Indonesia – Indonesia faces critical challenges in its energy sector as it aims to transition to renewable sources by 2025. Currently, only 12% of its energy mix comes from renewables, significantly lower than neighboring countries.
In 2022, the share of renewable energy in Indonesia was recorded at 12.30%, while Vietnam's renewable energy capacity reached 45,327 MW, the highest in ASEAN. Indonesia has a potential renewable energy capacity of 442 GW, according to the Ministry of Energy and Mineral Resources (ESDM).
The reliance on coal remains high, generating $45 billion in export revenue in 2022, contradicting Indonesia's commitment to achieve net-zero emissions by 2060. The government is urged to invest in clean energy technologies and reform fossil fuel subsidies to harness its renewable potential.
As of August 2023, the unemployment rate stands at 5.86%, with a significant mismatch between workforce skills and industry needs. A 2015 report indicated a vertical mismatch of 53.33% and a horizontal mismatch of 60.52%, highlighting the need for educational reforms focused on skills training.
Strategic solutions include modern agricultural technologies to enhance food security and public-private partnerships for major projects like the new capital city, Nusantara. Tax incentives for green energy projects are also essential to accelerate the transition to renewable sources.
With adaptive and inclusive policies, Indonesia aims to create a resilient and sustainable economy by 2025, ensuring that economic growth benefits all citizens.