Indonesia’s clean energy future is at a crossroads.
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Group led by Jacksonville-based billionaire Patrick Zalupski gets OK from MLB to purchase Tampa Bay Rays: report Read full article: Group led by Jacksonville-based billionaire Patrick Zalupski gets OK from MLB to purchase Tampa Bay Rays: reportFILE - Workers walk near solar panels that provide partial electrical power to Istiqlal Mosque as the city skyline is seen in the background, in Jakarta, Indonesia, Wednesday, March 29, 2023. FILE - Women sit on a hill overlooking the Suralaya coal power plant in Cilegon, Indonesia, Jan. 8, 2023. FILE - A model stands near a Sealion 7, an electric vehicle from Chinese automaker BYD, during the Gaikindo Indonesia International Auto Show in Tangerang, Indonesia, Wednesday, July 23, 2025. FILE - Workers walk near solar panels that provide partial electrical power to Istiqlal Mosque as the city skyline is seen in the background, in Jakarta, Indonesia, Wednesday, March 29, 2023. The race to replace coal in Indonesia, the world’s largest coal exporter, has become a contest between the U.S. and China. At stake is not only Indonesia’s climate future, but also which superpower sets the terms for the next generation of energy in the developing world.Chinese companies signed more than $54 billion in agreements in 2023 with Indonesian state utility PLN, while Indonesian President Prabowo Subianto’sadded $10 billion in commitments. Chinese firms are now rapidly embedding themselves in Indonesia’s clean-energy supply chain, from solar and critical mineral mining to electric vehicles, also known as EVs., or JETP, signed in 2022 between Indonesia and a group of wealthy nations to help the country shift away from coal, which contributes 3.6% of the country’s GDP.even before U.S. President Donald Trump's administration formally withdrew in March. Only $1.2 billion, or about 6%, of JETP finances have been disbursed while Indonesia believes it needs over $97 billion for the transition., or LNG, as part of talks meant to head off tariffs for Indonesia. It touts “energy dominance” as a way to cut dependence on rivals like China. Beijing is betting on big renewables to cement its role as the biggest supplier of clean energy technology. The U.S. path risks deeper fossil fuel dependence, while China’s promises jobs and cleaner power with fewer safeguards. “These two countries ... they’re shaping two different visions of the future,” Putra Adhiguna of the Energy Shift Institute said.The U.S. withdrawal in March didn’t derail the JETP, but impacted political leadership, analysts said.Biden-era climate policies and pushed fossil fuel development, Indonesian officials questioned why they should transition if America isn’t, Adhiguna said. Early JETP conversations “set expectations unrealistically high,” raising goals that were hard to achieve regardless of U.S. policy changes, he added. The U.S. pledged $2 billion, with roughly half still accessible via loan guarantees, said Jordan Lee of the Tony Blair Institute for Global Change in Jakarta. The JETP always was meant to cover only a portion of the roughly $97 billion needed. Foreign investment was critical given Indonesia’s tiny solar and wind sector, accounting for 0.24% of total energy compared with 3.8% in the Philippines and 13% in Vietnam. Lee said the JETP also provided a unifying platform for stakeholders and helped Indonesia partner with new countries like the UAE and Saudi Arabia.China offers a"different version of energy security," replacing imported fossil fuels with solar panels that generate electricity for decades, Adhiguna said. Major Chinese projects in Indonesia include a $6 billion supply-chain venture by battery giant CATL with local partners in 2022 and BYD’s $1 billion EV plant announced in 2024 will produce 150,000 cars annually and employ 18,000 workers. China's BTR New Material Group launched a $478 million factory in 2024 that will make anode materials for EV batteries and create around 8,000 jobs, while a solar panel factory unveiled in 2025 by LONGi has an annual capacity of 1.6 gigawatts. “It’s a whole-systems change,” said Dinita Setyawati, an energy analyst focused on Southeast Asia at the think tank Ember. She noted this meant a country could buy solar panels from China and charge their Chinese-built electric cars with clean electricity. These projects are deployed quickly, which is crucial for Indonesia’s five-year political cycles, even if Western investors offer more safeguards. POWERCHINA built a 100-megawatt solar park in just seven months in 2024. “If a U.S. company takes four years to do a feasibility study, Chinese companies will already have invested by then,” Adhiguna said.Most of Indonesia’s nickel mines, for instance, are Chinese-owned. The country has the biggest reserves of the mineral needed to build EV batteries and the mines rely on captive coal-fired power plants, built on-site to supply electricity. A 2024 study by the Centre for Research on Energy and Clean Air on the impact of nickel mining in three Indonesian provinces found pollution from smelters and the coal-fired power plants would cost the economy $2.6 billion in 2025, rising to $3.4 billion by 2030, while resulting in more than 3,800 deaths in 2025 and nearly 5,000 by 2030.Indonesia’s energy minister, Bahlil Lahadalia, said in April it would boost LNG imports from the U.S. by around $10 billion as part of tariff negotiations. LNG is natural gas cooled to liquid for storage and transport, burning cleaner than coal but still The risk is that the gas deals could further entrench Indonesia’s reliance on fossil fuels. Committing to long-term deals risks leaving countries stuck with outdated infrastructure, even as the world moves quickly toward cheaper, faster-to-deploy solar and wind power, analysts said. Indonesia could risk falling behind in the clean energy transition and miss out on investment opportunities, such as data centers seeking renewable energy in Southeast Asia, Setyawati said.Meanwhile, Indonesia remains deeply tied to coal. It was the only country to propose building new coal plants and had the third-highest amount of coal capacity globally in 2024. About 80% of the 1.9 gigawatts of coal capacity Indonesia built was for the captive coal plants for smelters processing minerals like nickel and cobalt for electric vehicles, according to a report by U.S.-based nonprofit Global Energy Monitor. “The Indonesian government needs to realize that this is where the world is heading, like it or not,” Setyawati said.The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. The AP is solely responsible for all content. Find the AP’sCopyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
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