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Nexus assessment of Indonesia’s energy sector: Does the electricity sector deliver for the economy, environment and society?

Working paper

Written by Balgis Inayah, Hamidah Busyrah, Aidy Halimanjaya, Muhammad Ichsan

Image credit:Photo by Dominik Vanyi on Unsplash

Indonesia’s electricity sector aims to achieve economic transformation, environmental sustainability and social inclusion (‘energy nexus’ objectives), but progress has been limited. This paper examines key drivers, existing gaps and potential pathways to achieving more coordinated and joined-up policy-making that incorporates nexus objectives in a transition towards more sustainable sources of power. The findings reveal inconsistencies, capacity limitations and weak safeguards that hinder the harmonisation of e nergy nexus objectives.

Based on gaps identified, the study highlights the need for improved institutional arrangements, capacity building, policy reforms and ending fossil fuel subsidies to promote a more coherent and integrated nexus approach at the national level. Promoting public participation, introducing complementary measures for local resources and collaborating with regional associations are important at the operator level. At the project implementation level, establishing monitoring frameworks and adopting best practices that are aligned with nexus objectives and integrate the views of all stakeholders would make a vital contribution towards achieving a sustainable and inclusive energy transition.

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