Fossil fuels like oil, gas and carbon are the primary energy supply in Indonesia, while renewable energy, principally hydro and geothermal, made up a small percentage of its energy supply. Electricity generation is especially dependent on fossil fuels, with 57 percent and 25 percent of the electricity generated in 2017 coming from coal and natural gas respectively.
In 2018, the coal energy supply amounted to approximately 483.34 million barrels of oil equivalent. This value has more than doubled in the last ten years. In comparison, the hydro power energy supply only amounted to approximately 40.2 million barrels of oil equivalent at in the same year. Knowing that the country’s renewable energy resources has not been fully explored, the state electricity firm PLN has started to build the country’s biggest hydropower plant (PLTA) in North Kalimantan in 2019, aiming to generate 1,350 megawatts (MW) upon the project’s completion in 2025. Besides hydropower, Kalimantan is also a source of wind energy, with a potential wind energy value of 2.5 thousand megawatts.
Primary energy demand in Indonesia increased by 4.9 percent in 2018, more than its average annual rate of 2.8 percent between 2007 and 2017. Over the past decade, energy consumption per capita has risen steadily. This growth comes largely from the transportation and industrial sectors, which were still heavily dependent on oil. However, Indonesia's oil production has been declining for the past few years. While the investment value in the oil and gas sector in Indonesia is still high, its contribution to the state revenue has been declining.
Mainly due to its energy industries, Indonesia was the world’s fifth largest emitter of greenhouse gases. After the Paris Agreement in 2015, the Indonesian government pledged in 2017 that no new coal power plants would be built on Java, in a bid to reach the country’s renewables target of 23 percent in energy mix by 2025. In 2010, East Java was ranked third in greenhouse gas emissions in Indonesia. However, this pledge has been rated “highly insufficient” by Climate Action Tracker (CAT), an independent research project tracking climate policies.