The Indonesian government’s ambitious push to bridge the nation’s infrastructure gap through the rollout of a 35,000-megawatt (MW) power plant mega-project may still fall short of addressing the country’s deep-seated energy deficits. Despite being framed as a transformative initiative designed to accelerate equitable energy distribution across the sprawling archipelago, leading economic researchers argue that the scale of the program remains inadequate when juxtaposed with regional peers and the baseline requirements of a growing industrial economy.
The evaluation of the national electrification strategy has intensified discussions surrounding energy planning, infrastructural bottlenecks, and the socio-economic implications of energy access. As the administration continues to navigate the complexities of power generation and grid connectivity, experts maintain that structural adjustments and even more aggressive capacity expansions are necessary to secure long-term national competitiveness.
The Macroeconomic Imperative of Energy Access
Energy security and widespread electricity access serve as fundamental pillars of modern economic development. For an emerging market like Indonesia—the largest economy in Southeast Asia—reliable and affordable power is essential for manufacturing, technological advancement, small and medium enterprises (SMEs), and the daily livelihoods of over 250 million citizens.
Historically, archipelagic geographies have presented unique logistical challenges for energy distribution. Connecting isolated islands to a unified or stable grid requires substantial capital expenditure, advanced engineering, and sustained regulatory commitment. Recognizing these structural vulnerabilities, the government launched the 35,000 MW electrification program to rapidly scale up generation capacity, reduce reliance on emergency diesel generators, and stimulate regional economic activity.
However, researchers from the Economic Research Center under the Indonesian Institute of Sciences (LIPI) have pointed out a critical analytical distinction: distinguishing between the mere physical connection of households to a grid and the substantive, productive consumption of electricity required to drive industrialization and wealth generation.
Comparative Analysis: Indonesia Versus ASEAN Neighbors
A closer examination of regional consumption metrics reveals a stark contrast between Indonesia and its neighbors within the Association of Southeast Asian Nations (ASEAN). According to data compiled by LIPI, Indonesia’s per capita electricity consumption hovers at approximately 730 kilowatt-hours (kWh) per year.
In comparison, neighboring countries have achieved significantly higher thresholds of energy adoption. Brunei Darussalam leads the regional cohort with an astonishing 9,092 kWh per capita, followed closely by Singapore at 8,690 kWh. Industrializing and dynamic economies within the bloc also outpace Indonesia by wide margins: Malaysia records 4,345 kWh per capita, and Thailand stands at 2,465 kWh. Even Vietnam, which has aggressively expanded its manufacturing sector over the past decade, registered a per capita consumption of 1,273 kWh as early as 2012, significantly higher than Indonesia’s current baseline.
Maxensius Tri Sambodo, a senior researcher at LIPI’s Economic Research Center, illustrated the mathematical limitations of the current 35,000 MW project trajectory during an evaluation in Jakarta. Based on projections of adding approximately 7,000 MW of generating capacity per year, the resulting boost to per capita consumption is mathematically modest.
"The calculation is straightforward: taking 7,000 MW, multiplying it by 24 hours a day, and multiplying it by 365 days a year, then dividing that total by our population, which we assume to be 250 million," Sambodo explained to press representatives at the LIPI Building in Jakarta. "That yields an increase of roughly 245 kWh per capita. When added to our current baseline, the cumulative figure still leaves us far behind regional competitors like Vietnam."
The Persistent Access Deficit
Beyond the metric of per capita consumption, the quantitative distribution of basic electricity infrastructure remains an unfinished agenda. Despite significant progress over preceding decades, administrative data indicates that approximately 60 million Indonesians continue to live without reliable, continuous access to electricity, particularly in remote, outermost, and underdeveloped regions known locally as the 3T regions (Tertinggal, Terdepan, dan Terluar).
For these communities, the promise of the 35,000 MW mega-project feels distant. Large-scale coal, gas, or geothermal power plants primarily feed major industrial centers, urban conurbations, and the main grids of Java and Bali. Without dedicated transmission lines, microgrids, and decentralized renewable energy solutions, the surplus generated by centralized mega-projects risks bypassing the populations that need it most.
Consequently, researchers argue that evaluating the success of national energy policies solely through the aggregate mega-project target of 35,000 MW creates a misleading impression of absolute sufficiency. If the ultimate policy objective is to elevate living standards, lift remote communities out of energy poverty, and match the industrial readiness of regional competitors, the baseline targets must be scaled upward.
Chronology and Evolution of the 35,000 MW Initiative
To understand the current debate, it is necessary to examine the timeline and policy environment that gave birth to the 35,000 MW program.
- Early 2015: Recognizing chronic power shortages, blackouts in key industrial regions, and lagging electrification ratios outside Java, the newly inaugurated administration officially announced the grand strategy to construct power plants totaling 35,000 MW over a five-year window. The initiative relied heavily on a mix of state-owned enterprise (State Electricity Company / PLN) execution and Independent Power Producers (IPPs).
- 2016–2017: The program faced immediate implementation hurdles. Land acquisition disputes, environmental permitting delays, regulatory bottlenecks, and renegotiations of Power Purchase Agreements (PPAs) slowed down construction timelines. Financial close for numerous projects took much longer than initially anticipated.
- 2018–2019: As initial cohorts of power plants began commercial operations (COD), discussions shifted from pure construction capacity to grid absorption capacity. Analysts began warning of potential oversupply in the Java-Bali grid, contrasting sharply with severe deficits in eastern Indonesia.
- 2020 and Beyond: The COVID-19 pandemic introduced unprecedented macroeconomic shocks, sharply reducing industrial demand for electricity and forcing PLN to renegotiate take-or-pay contracts with independent producers. Concurrently, global pressures regarding carbon emissions and climate commitments pushed policymakers to re-evaluate the fossil-fuel-heavy pipeline of the original 35,000 MW blueprint, prompting a gradual pivot toward cleaner, renewable energy integration.
Policy Implications and Structural Recommendations
The critical insights provided by economic researchers highlight several structural policy implications for Indonesia’s energy future.
First, energy planning must transition from a purely top-down capacity-addition model to an integrated demand-and-distribution strategy. Simply building large power stations without ensuring adequate transmission networks, substation upgrades, and localized distribution grids results in stranded assets and inefficient capital allocation.
Second, the disparity in per capita consumption underscores the need for targeted industrial policies. Low electricity consumption is not merely a symptom of poor infrastructure; it also reflects lower levels of mechanization in agriculture, restricted manufacturing output in secondary cities, and limited adoption of electrical appliances in rural households. Expanding energy access must go hand-in-hand with economic empowerment programs that encourage productive electricity use.
Third, Indonesia faces a delicate balancing act between energy affordability, fiscal sustainability for state enterprises, and global climate commitments. Heavy reliance on subsidized fossil fuels creates fiscal burdens, while transitioning too rapidly without adequate financial support risks driving up tariffs for end-users. Independent experts suggest that unlocking the full potential of renewable energy sources—ranging from solar and hydro to biomass and geothermal—can decentralize power generation, making it technically and economically viable to reach the remaining population clusters currently lacking electricity.
Ultimately, while the 35,000 MW initiative represents a monumental step in the nation’s infrastructural evolution, empirical observations suggest it should be viewed as an initial installment rather than a final destination. As Indonesia strives to achieve its broader economic aspirations and close the developmental gap within Southeast Asia, future energy strategies will demand greater flexibility, decentralized innovation, and a steadfast commitment to equitable distribution across every island of the republic.
