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Reshetova, Elena

Preview: Widely recognized as ASEAN’s economic powerhouse, Indonesia recently joined the trillion-dollar economy club with its GDP crossing the $1 trillion threshold at the end of 2017. The country has numerous advantages that translate into steady economic growth: abundance of natural resources, large domestic market, low labor costs, evolving regulatory mechanisms for investment protection and unobstructed access to many sectors of its economy. However, as an archipelagic nation of 17,000 islands and home to a growing population of over 260 million people, Indonesia is an energy-poor country still struggling to address many issues of energy access. Despite significant progress in electrification, which increased nation-wide from 66 percent in 2009 to 91 percent in 2016, many challenges persist. For example, in some, and not necessarily remote, areas electrification rates remain well below the national average, and the quality of electricity access is questionable. Also, despite a relatively low current per capita electricity consumption and in view of rapidly expanding electrification along with delays in streamlining additional electricity generation capacity in a system with already low reserve margins, it is unclear whether the country’s energy infrastructure will be able to keep up with mounting demand.

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