Indonesia’s captive power sector needs $31b by 2030 under JETP
Saturday, December 20 2025 - 09:52 AM WIB
By Romel S.Gurky
Indonesia will require around US$31 billion in cumulative investment by 2030 and as much as US$92 billion by 2050 to decarbonise its captive power sector under the Just Energy Transition Partnership (JETP) Captive Scenario, according to a new JETP report.
Under the scenario, annual investment in captive power generation is projected to average US$5.1 billion between 2025 and 2030, significantly higher than under the baseline case that assumes continued reliance on captive coal-fired power plants. While the US$20 billion in public and private financing pledged under the JETP agreement is expected to act as an important catalyst, the report said it would cover only a fraction of total funding needs, requiring much greater mobilisation of private capital.
Most investment through 2030 will be directed towards renewable energy and battery storage, which together are expected to account for about two-thirds of total spending. Solar photovoltaic (PV) leads with average annual investment of US$2.1 billion, followed by hydropower at US$0.7 billion per year. Smaller but strategically important investments are also expected in captive gas-fired power plants and electricity grids to support renewable integration and industrial clustering.
The report noted that investment requirements through 2030 also include capital spending on captive coal plants already under construction, as well as up to US$0.5 billion per year to enhance the operational flexibility of existing coal-fired captive power facilities. Such upgrades would allow coal plants to operate at lower minimum loads, ramp more quickly and support the integration of variable renewable energy.
Looking beyond 2030, total captive power investment is projected to decline before rising again towards 2050, reaching nearly US$6 billion annually as Indonesia moves to fully phase out captive coal generation and achieve net-zero emissions. Solar PV is expected to account for the largest share of cumulative investment through 2050, at around US$32 billion, followed by bioenergy at US$21 billion, battery storage at US$12 billion and hydropower at US$10 billion. Geothermal investment under the captive scenario remains relatively limited, at just over US$1 billion.
Read also: JETP Secretariat plans to secure $5.5b for renewable energy projects in Indonesia
Despite the dominance of renewables and storage—accounting for nearly 85% of cumulative investment—fossil fuels are expected to retain a limited role. The report estimates around US$6 billion in cumulative investment for captive gas power and a similar amount for repurposing existing coal plants to improve flexibility. Grid investments remain relatively small at around US$0.3 billion, but are considered critical for integrating captive facilities and industrial clusters.
By industry, the nickel sector is projected to dominate captive power investment, accounting for nearly 50% of total spending through 2030 and around 68% of cumulative investment, or US$63 billion, through 2050. Aluminum follows with around US$13 billion, while pulp and paper, steel, mining and other industries collectively make up the remaining share.
JETP data shows Indonesia had about 25.9 GW of operating captive power capacity in 2024, rising to 36.7 GW when including plants under construction and at the planning stage. More than three-quarters of existing captive capacity is coal-based.
Under the JETP Captive Scenario, coal-based captive generation—estimated at more than 100 terawatt-hours in 2024—is projected to gradually decline to zero as renewable energy, storage technologies, gas switching and grid integration solutions scale up. Renewable power is expected to account for 34% of captive generation by 2030, rising to 55% by 2040 and more than 80% by 2050.
The transition would cut carbon emissions from captive power generation by 75% in 2030 compared with a baseline scenario and achieve net-zero emissions by 2050, the report said, although electricity costs would be somewhat higher in the near term.
Editing by Reiner Simanjutak