Indonesia beat its clean power target and its emissions still rose

Indonesia is doing better on renewable energy than it promised. Clean sources made up 17.9 per cent of power generation in April, above the government's full-year target of 16.4 per cent, and up from 14.7 per cent in 2024. Emissions went up anyway. Writing in Fulcrum, Peh Ko Hsu and Siwage Dharma Negara of the ISEAS-Yusof Ishak Institute in Singapore explain why the two numbers can move in opposite directions.

The answer is a kind of power plant that never touches the public grid. A captive coal plant is built to feed one industrial site directly, and in Indonesia those sites are mostly nickel smelters and stainless steel works, the same industry that sells itself as the base of the world's green batteries. Captive coal capacity more than doubled between 2023 and 2025, and the authors say plants now under development would take it past 31 gigawatts, roughly triple the 2023 level. Coal's share of grid electricity has meanwhile sat near 61 per cent, because the new renewables have mostly replaced oil and diesel rather than coal. In 2024, manufacturing was the country's largest source of greenhouse gases at 37.6 per cent, ahead of electricity and gas supply at 27.8 per cent.

Their fix starts with where things are built. Indonesia has more than 3,000 gigawatts of renewable potential scattered across the islands, so new industrial parks could be sited near it and wired to grids strong enough for heavy factory loads. Two projects already do this: PT Vale runs its nickel processing on three hydro plants totalling 365 megawatts, and Amman Mineral has put solar into its mine site in West Sumbawa. The authors also want smelters allowed to buy power directly from renewable suppliers on long contracts, and the exemption that lets "national strategic projects" add captive coal tightened rather than left open.

Why it matters

Nickel and batteries are the industrial bet Indonesia has staked its next decade on, and this is the argument foreign buyers and lenders will use to judge how green that output really is. If you follow the energy transition, stop reading the renewable share as the score: it is already beating target while the country's emissions rise. The number that decides the next few years is the captive coal pipeline, and the political test is whether the strategic-project exemption gets narrowed before the rest of that 31 gigawatts is actually built.