Indonesia’s Wind Power Potential Reaches 167 GW, While Investment Remains Constrained by Economic and Infrastructure Challenges
Indonesia has significant potential for the development of wind power plants (PLTB), although investment realization continues to face challenges related to economic viability, regulatory frameworks, and project readiness. The Ministry of Energy and Mineral Resources (MEMR) noted that no new investment in wind power projects has been recorded in approximately four years, despite the 2025–2034 Electricity Supply Business Plan (RUPTL) targeting an additional 7.2 GW of wind power capacity. The government is currently pursuing a revision of Presidential Regulation No. 112/2022, including a review of wind power electricity pricing, while also exploring concessional financing schemes from European partners. Potential areas for wind power development include South Sulawesi, East Java, South Kalimantan, East Nusa Tenggara, Maluku, and other parts of eastern Indonesia. A study by the Institute for Essential Services Reform (IESR) estimates that economically viable wind power capacity could reach approximately 167 GW across 203 locations, with several sites potentially achieving an economic internal rate of return (EIRR) above 10%. Wind power is also considered suitable for integration with hydropower to help maintain energy supply stability when hydropower generation declines during the dry season.
Despite its considerable potential, high upfront investment costs, variations in wind characteristics across locations, electricity pricing, land readiness, and limited transmission infrastructure remain major barriers to wind power development. The government is encouraged to strengthen preliminary surveys and technical planning, adapt turbine technologies to local wind conditions, and establish electricity pricing mechanisms that can attract investment while maintaining project viability. IESR also recommends integrating potential wind power development areas into Regional Spatial Plans (RTRW), establishing an integrated land acquisition system, providing transparent digital databases, and expanding PLN’s substations and transmission networks toward areas with high wind energy potential. In addition, implementing bulk procurement by bundling several smaller projects could improve cost efficiency and accelerate project development. A combination of regulatory reforms, competitive financing, infrastructure readiness, and comprehensive project planning will therefore be essential to unlock Indonesia’s wind energy potential and achieve the wind power targets set under the 2025–2034 RUPTL.
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