Wind Energy Country Analyses Indonesia

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Overview - Market Potential for Wind Energy

The average wind speeds in Indonesia range between 1.3 to 6.3 m /s.[1]61 The main wind energy potential areas are located in East and West Nusa Tenggara (eastern and western portion of the Lesser Sunda islands, central south and eastern south of Indonesia) which have average wind speeds of more than 5 m /s. The approximate wind power potential in Indonesia is estimated at around 9 500 MW. However, Indonesia is lagging behind its potential, with an installed capacity of around 1.2 MW. A database with wind energy potential of each region is available from the National Institute of Aeronautics and Space (LAPAN).62

Framework Conditions for Wind Energy

Goal for the Use of Wind Energy

In Indonesia, the development of renewable energy is currently regulated by Presidential Decree No. 5 / 2006 regarding the national energy policy[2]63 and Blueprint energy policy 2005[3]. The Directorate-General for Electricity and Energy Utilisation (DGEEU) has a sub-directorate New & Renewable Energy which has set a target of 250 MW electricity from wind energy on grid and 5 MW off grid in the year 2025.64 The wind energy roadmap, which is currently implemented is shown in table 12. Promotion programmes The Indonesian government has a clear promotion programme through its wind energy road map. Permission procedures To facilitate the procedure to develop renewable energy projects, the Indonesian government65 has changed a number of laws in the energy and mining sector, in order to give Provincial Governments the right and responsibility to issue concessions, and operating licenses for renewable energy and energy efficiency projects. The main actors which provide permits and support to the project developers are PLN and MEMR (DGEEU). For setting up small-scale wind energy schemes, the Agency for the Assessment and Application of Technology (BPPT), the Ministry of Mines and Energy-Directorate- General for Electricity and Energy Development (DGEED) as well as the National Institute of Aeronautics and Space (LAPAN) could be contacted for project development issues. Contracts to local consulting, planning and engineering companies as well as contacts to wind energy technology dealers can be provided by APETINDO, the Indonesian Association of Renewable Energy Sources. Grid connection conditions To connect wind farms to the Indonesian electricity grid, the project developer must contact PLN.

Current Use of Wind Energy and Project Pipeline

By end of 2008 wind energy accounted for 1.2 MW in Indonesia.66 Small wind power projects are spread over the country with capacity ranges from 50 W – 10 kW. Since wind energy development in Indonesia is in its early stage, there are still numerous opportunities for project development. Wind energy technology developed in the country, namely Wind Energy Conversion System67 (Sistem Konversi Energi Angin-SKEA), are still prototypes. Table 13 gives some examples of wind energy projects. The current limited utilization of wind energy concentrates on stand-alone electricity production in rural and remote areas. Furthermore, it is used for water pumping for agriculture purposes and for battery charging. So far, no grid-connected medium or large-scale applications have been realized in Indonesia.

Business Climate

Market players

Below is the list of companies involved in wind energy development in Indonesia:

  • PT Indonesia Power: Responsible for wind power generation
  • PT Citrakaton Dwitama: Provides advice for wind power development
  • IWES (Indonesian Wind Energy Society): promotes wind energy which should be achieved in a collaborative way among the stakeholders, i. e. between government, business, and research institutions as well as international partners
  • LAPAN (National Institute of Aeronautics and Space): Make measurements and provide data

Legal Conditions

Indonesia is lacking of a legal framework for the implementation of wind energy projects.

In addition, there is still a lack of participation from the key players in this area due to the following constraints:

  • Financial Aspects: The high initial investment costs and the perceived risks of renewable energy investments have discouraged the investors and financing institutions from providing the necessary funding.
  • Pricing: The initial investment costs for renewable energy technology are higher than the conventional energy because the technology is still in its early stage. In addition, the government is still giving high subsidies for fossil fuels.
  • Lack of private sector involvement: Poor financing and pricing greatly contributed to a lack of private sector participation in the commercial utilization of renewable energy sources.

Structural Conditions

The national wind industry has capacities for small-scale utilization68: the local industry is able to build wind energy conversion system components of up to 5 kW. This capacity could be expanded to mass production in case the market would be available. Medium- and large-scale utilization is still under development. An example of the implementation of this technology is the educational and practical demonstration projects conducted by the Bogor Heritage Organization by building 1 000 small wind farm projects in Java Island, in 2004. These wind farms are named "Egra"=Energy Gratice=Free Energy.

Financing Possibilities

Since the government founding capacity is limited for wind energy projects, there are therefore other sources of finance available from multilateral / bilateral funding agencies, i. e. WB and ABD. 68 SERD

Further Information


  1. PEU 2006
  2. [1] FAOLEX (2011) Presidential Regulation No. 5/2006 dated January 25, 2006 - National Energy Policy Indonesia.
  3. [2] WRI (2011) Blueprint National Energy Policy Indonesia, Short Information.