ABSTRACT
Indonesia is Southeast Asia’s biggest country, with a rapidly growing economy and increasing energy demand. The country’s size matters for the development of the whole region. Changes in the energy system of a fossil fuel-dependent regional power like Indonesia are likely to affect its neighboring countries. With an estimated population of more than 250 million people, it is the world’s fourth most populous nation. Abundant natural resources and a huge domestic market make the world’s largest archipelago, with 17,500 islands, an economic “heavyweight of Southeast Asia” (Case 2002, p. 29) and the “primus inter pares” among Association of Southeast Asian Nations (ASEAN) member countries (Smith 2001, p. 80). With 36 percent of total demand, Indonesia is by far the largest energy consumer in the region, using 66 percent more energy than Thailand as the second largest consumer and over 50 times more than the smallest consumer, Brunei Darussalam (IEA 2013, p. 16). Despite significant potential for renewables, fossil fuels dominate the archipelago’s electricity system. The central government has provided incentives for renewables and moved the electricity market towards a more competitive design (Damuri and Atje 2012), but without effects towards more sustainable energy supply. Bi-and multilateral donors have pushed renewable energy development with a variety of projects.
