Electricity transition in Indonesia, ASEAN, and OECD nations, 1985–2024: Trends, gaps, and policy implications

Article ID: 869

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Abstract

This study examines why Indonesia's renewable energy transition has stalled relative to its ASEAN neighbors and OECD nations, despite the country holding substantial hydro, solar, and geothermal resources. Using comparative quantitative analysis of electricity generation data from 1985 to 2024, we track renewable energy integration trends across three groups: Indonesia, the ASEAN regional average, and OECD countries. The analysis combines descriptive statistics, trend assessment, and scenario-based modeling to project trajectories through 2040. Results reveal a persistent transition gap: OECD countries reached renewable shares above 40% by 2024, ASEAN averaged 28.3%, and Indonesia remained below 16%—even as coal held more than 55% of its generation mix throughout the study period. Three structural factors are consistently associated with this gap: fossil fuel infrastructure lock-in reinforced by a domestic coal price cap that renders renewables artificially uncompetitive, weak investment mobilization relative to OECD-style feed-in tariffs and carbon pricing mechanisms, and fragmented regulatory frameworks that systematically inflate project risk. Scenario modeling shows that business-as-usual sustains high emissions, while a coal phase-down combined with renewable acceleration could push the renewable share to 40–50% by 2040. Closing this gap requires coordinated reform: redirecting fossil fuel subsidies to renewables, streamlining licensing, guaranteeing grid access, and deepening ASEAN regional power trading. The findings carry direct relevance for other middle-income, coal-dependent countries managing the tension between energy transition and economic growth.