Indonesia does not have an energy crisis, but a management one
Rethinking Indonesia’s energy narrative
The author is a senior trainer on electricity and renewable energy programs. This article reflects the author’s own analysis and views and does not necessarily represent those of The Reformist.
The strains around the Strait of Hormuz once again highlight how fragile global energy systems can be. For Indonesia, the risk is notably critical because the country consumes around 1.6 million barrels of oil per day, while domestic production has declined to only around 600 thousand barrels per day. The nearly 1 million barrels-per-day gap must then be met through imports. Instability in strategic chokepoints like the Hormuz is thus a direct threat to our energy security, not merely a distant geopolitical disruption, given our exposure to global supply routes.
It is tempting to conclude that Indonesia is facing an energy crisis. But is it really?
Traditionally, an energy crisis is associated with visible disruptions: blackouts, fuel shortages, or soaring prices. Indonesia has experienced some of these pressures, including rising energy subsidies, vulnerability to the fluctuations of global oil prices, and increasing dependence on imported fuel, though not yet at the level of systemic collapse seen in some countries.
Today, Indonesia is facing a more subtle and structural challenge than simply a supply crisis: a mismatch between the country’s energy consumption trends, resource base, and long-term system readiness.
Indonesia’s energy challenge is paradoxical: We hold vast coal reserves (the world’s 3rd-largest coal producer) and are among the countries with the largest renewable energy potential (estimated at more than 3,600 GW, including solar and geothermal). However, we are still heavily dependent on imported oil to sustain daily economic activity.
All of this boils down to the conclusion that Indonesia’s energy problem lies in how our energy system is managed: which resources are given priority, which infrastructure is built, and which consumption patterns persist.
Structural paradoxes
Currently, Indonesia’s energy system has three structural contradictions:
First, more than 80 percent of our energy mix still relies on fossil fuels, with coal accounting for the majority of electricity generation.
Second, we import nearly 1 million barrels of oil per day, despite being resource-rich, exposing the country to global price volatility and geopolitical risk.
Last, but not least, while the country possesses immense renewable potential, less than 1 percent has been effectively harnessed.
These dynamics do not exist in isolation. They reinforce one another, forming a system that is stable in the short term but vulnerable in the long term.
Further, public discourse on energy challenges is frequently framed as a supply issue. Build more power plants, deploy more renewables, reduce imports. But this is an oversimplification of a fundamentally systemic problem.
Take solar energy as an example. President Prabowo Subianto’s ambition to develop 100 GW of solar capacity is a bold step. However, solar power is inherently intermittent, so the conversation should continue to explore how we will provide adequate grid flexibility, storage systems, and operational preparedness.
Adding new capacity alone could destabilize the very system it aims to improve. Thus, we need to focus on redesigning the system and its management when discussing the energy transition.
System readiness is a missing piece
The question is: Are our energy systems ready?
On the supply side, the bottleneck in our system readiness goes past infrastructure alone. Several challenges endure:
Our power grid is still largely designed for baseload generation.
Energy storage infrastructure is limited.
Regulatory and investment frameworks are evolving, but not yet fully aligned.
Human capital for managing a more sophisticated energy system is still developing.
However, our system readiness is also reflected in how we consume our energy.
Now, let’s talk about the demand side
In Indonesia, conversations on energy transition remain heavily supply-driven. While they are absolutely essential, they overlook a simpler yet powerful lever: energy conservation at the demand level.
Small behavioral changes can have a significant impact collectively. Something as simple as turning off unnecessary lights, setting air conditioners at efficient temperatures (24–26°C), and adopting more conscious energy use could change the way we think about energy transition, beyond the governmental agenda.
The transport paradox and rethinking the real solution
To illustrate, let’s now examine Indonesia’s transport sector, one of the largest consumers of fossil fuels.
The government has taken important steps to endorse electric vehicles (EVs) and reduce emissions. However, this raises a critical question: Does reducing emissions automatically solve our energy challenges?
In cities like Jakarta, it’s not that simple. While EV adoption may reduce emissions, it does not address the underlying issue that has long afflicted the metropolitan: vehicle overpopulation.
Policies that provide privileges to EV users, such as tax breaks and exemptions from traffic restrictions, may unintentionally favor those who can afford to buy more private vehicles. Meanwhile, structural problems remain unresolved.
If the goal is to meaningfully reduce both emissions and energy consumption, switching technologies (from coal to solar, from fossil fuels to EVs) alone is not enough.
For example, investing in accessible public transport offers a more systemic solution. Unlike private vehicle electrification, it reduces both per-capita energy demand and vehicle volume simultaneously.
Towards a complete transition
Ultimately, Indonesia should aim to transition to cleaner, more sustainable, and more resilient sources on one end and change how energy is consumed across society on the other. Otherwise, the transition risks becoming incomplete.
Reframing Indonesia’s energy challenge as a management issue leads to a different set of priorities.
In the short term, the country should improve energy security by reducing vulnerability, managing demand, and decreasing dependence on imported fuels.
In the medium term, the focus needs to shift to infrastructure: modernizing the grid, scaling storage, and aligning regulatory regimes.
In the long term, the goal should be transformation, in which renewable energy is not merely added but fully integrated into a resilient and adaptive system.
The question, then, is not whether Indonesia has enough energy. It is whether Indonesia is ready to manage the energy system of the future. Because the real challenge is not a lack of solutions, but the ability to implement them coherently, consistently, and at scale.
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