Can Indonesia Transition to Clean Energy Without Leaving Communities?

TheIndonesia.co - Indonesia, the world’s fourth most populous nation and a top exporter of coal and palm oil, finds itself at the center of the global green energy transition. As countries shift from fossil fuels to renewables, Indonesia is under pressure to transform its energy system. Yet the road to a cleaner future is proving to be anything but smooth.

The $20 Billion Promise

In November 2022, a landmark deal was signed: the Just Energy Transition Partnership (JETP). Backed by the United States, Japan, and major European economies, the $20 billion package aims to accelerate Indonesia’s transition away from coal. The plan targets early retirement of coal plants, investments in renewable energy, and reforms in regulatory frameworks.

But since then, progress has been uneven. Critics argue that much of the funding is coming in the form of loans rather than grants. Meanwhile, coal still fuels more than half of Indonesia’s electricity grid.

A Coal Legacy That’s Hard to Shake

For decades, coal has been central to Indonesia’s economic strategy. It’s cheap, abundant, and politically entrenched. Local governments often depend on royalties from coal mining, while state-owned utility PLN has built a system designed around coal-fired baseload power.

This legacy infrastructure means that even as Indonesia signs green pledges on the international stage, new coal power projects continue to be approved under “committed pipeline” clauses.

Solar and Wind: Still in the Shadows

Indonesia has vast solar potential—especially in its eastern provinces—but less than 1% of its power comes from solar today. Wind potential is also underdeveloped, due to technical and logistical hurdles in the archipelagic terrain.

The Ministry of Energy has set ambitious targets: 23% renewable energy by 2025. But achieving that would require a tenfold increase in current solar capacity. Permitting delays, grid limitations, and financing gaps remain major obstacles.

Community Conflicts and Land Worries

One of the biggest challenges in Indonesia’s energy transition isn’t technological—it’s social. Building renewable infrastructure often means acquiring land, and in many parts of Indonesia, land ownership is complex, informal, or rooted in Indigenous traditions.

Take, for example, geothermal projects in West Java and Flores. While they offer clean baseload energy, several have sparked protests due to inadequate consultation with local communities. In some cases, land acquisitions have proceeded without Free, Prior, and Informed Consent (FPIC), violating Indigenous rights.

Similarly, large-scale solar farms have triggered disputes in Sumatra and Kalimantan, where local farmers fear displacement.

The Human Cost of Critical Minerals

Indonesia is also key to the global battery supply chain, thanks to its massive nickel reserves. But as recent investigations in Sulawesi and Halmahera show, mining has led to deforestation, water pollution, and social unrest.

Local communities are often caught in a double bind: they’re asked to sacrifice their land for minerals that enable someone else’s clean energy. And while jobs are created, they’re often short-term or low-wage, with little community reinvestment.

A Just Transition—or Just Talk?

For a transition to be truly “just,” it must ensure that workers and communities are not left behind. This means supporting coal workers in retraining and securing new livelihoods, involving communities in planning decisions, and guaranteeing environmental safeguards.

Yet many civil society groups say current policies fall short. Environmental impact assessments are weakly enforced. Compensation mechanisms are inconsistent. And renewable energy projects are too often driven by top-down investment priorities rather than local needs.

What’s at Stake

Indonesia’s transition is a bellwether for other developing nations. If it can shift from coal to clean energy while respecting rights, protecting nature, and lifting communities, it could set a powerful precedent.

But if the transition replicates old patterns of extractivism and exclusion, it risks becoming just another chapter in a long story of sacrifice zones.

As Tamrin, a father of five in Southeast Sulawesi, put it: “If you want an electric car, that’s fine. But ask yourself—where does the battery come from, and what did it cost?”

The world may be racing toward a low-carbon future. But whether it will be a fair one is still an open question.