Indonesia's new power development plan: Highlights from the 2025–2034 RUPTL

Introduction

The long-anticipated new Electricity Supply Business Plan (Rencana Usaha Penyediaan Tenaga Listrik or RUPTL) from PT Perusahaan Listrik Negara (Persero) (PLN), Indonesia's state utility, has been issued on 26 May 2025 and officially released to the public on 3 June 2025. Expectations (and speculations) have been building over the past couple of years about what the new plan would bring and the tone it would set for future investments in power generation and transmission assets across South East Asia's largest economy for the next decade. 

In brief, the 2025-2034 RUPTL calls for a considerable amount of investment in new power generation (69.5GW) and transmission assets with a focus on new and renewable energy (42.6GW), energy storage (10.3GW) and gas-fired plants (10.3GW). It is estimated that the implementation of the plan will require  investments just shy of USD 183 billion). 

The new development plan and these ambitious figures are meant to align with Indonesia's growing electricity needs following a few muted years impacted by the Covid-19 pandemic and the structural oversupply of power on the main Java-Bali grid which resulted from the realisation of the earlier "35GW plan" initiated at the beginning of President Jokowi's first term in office that accelerated the development of additional thermal baseload capacity. 

Whilst recent years have been marked by limited opportunities for investors with only a handful of sizable IPP tenders per year, the 2025-2034 RUPTL appears to call for a new era of significant development which would require a surge of investments and tender opportunities to be implemented. This is especially true for IPPs which are meant to represent 73% of the new capacity, including most of the planned new  renewable energy and gas / LNG-to-power capacity.

As in the past, it will have to be seen whether and how this ambitious plan translates into reality but there are now several tailwinds for increased investment in electricity infrastructure, including the reduced reserve margin on most main grids across the archipelago, growing demand, and the partial moratorium on new coal-fired power plants. Each of these will be drivers for the planning and construction of sizable new generation capacity over the next few years. This should give hope to all stakeholders that a more active period for this critical sector of the economy lies around the corner.

In this article we provide an overview of the 1,245 page long plan which is as succinct as possible yet attempts to highlight its key areas of coverage as well as takeaways for developers, financiers and other institutions looking to invest and participate in the further development of Indonesia's power infrastructure.

1. What has happened in the past 4 years?

As a refresher, the previous PLN Electricity Supply Business Plan (the 2021-2030 RUPTL) was issued on 28 September 2021 and referred to as the "Green(est) RUPTL" given its focus on rebalancing Indonesia's electricity generation towards renewable energy sources of electricity in line with its commitments to energy transition. A key component of the 2021-2030 RUPTL, supported by some of the regulations which were passed shortly after its issuance, lies in a partial moratorium on the development of new coal-fired power plants ("CFPPs"), the backbone of Indonesia's fleet of generation assets.

Under the 2021-2030 RUPTL, PLN committed to several key policies aimed at increasing renewable energy capacity and enhancing efficiency such as: 

1. Prioritizing the development of NRE, with projected increases in renewable energy capacity by 10.6 GW by 2025 and 18.8 GW by 2029. 

2. Fuel conversion and exhaust gas utilization, with PLN planning to transition many small & scattered generation assets from fuel oil to gas or combined cycle (CCGT) generation, as well as collocated solar and battery storage systems (BESS) – an initiative often referred to as the "Dediesilisation" programme. Additionally, the 2021-2030 RUPTL also focused on fuel switching and co-firing of CFPPs.

3. Increased utilization of biomass-based fuels as a primary energy source.

4. Implementation of low-carbon efficient technologies to reduce emissions across Indonesia’s energy sector.

For a more detailed analysis of the previous RUPTL, please refer to our article on the topic through the following link: PLNs New Greener RUPTL Key Highlights.

The new 2025-2034 RUPTL is referred to by the Government of Indonesia (GOI) as "Beyond the Greenest RUPTL" and puts the emphasis on energy self-sufficiency. The key focus areas of the plan (which we will summarize over the next pages) include:

1. Considerable increase in generation capacity from renewable energy sources (from 20.9GW in the previous RUPTL to 52.9GW) with the majority of this to be developed and financed by the private sector;

2. Procurement of approx. 10GW of new gas/LNG-fired power capacity in the next 5 years from IPPs offering renewed opportunities for the private sector in the short term;

3. Limited new CFPP capacity mainly through mine mouth CFPPs to be developed by PLN in support of downstreaming (hilirisasi) and other strategic industries; and

4. Substantial development of new transmission and grid infrastructure including a massive surge in interconnectors between main islands to address the known mismatch between renewable generation potential (mainly solar and wind) with the country's power demand centres.

The RUPTL introduces significant changes in capacity additions, renewable energy targets, and grid development priorities. Compared to the 2021–2030 RUPTL, this version of the plan contains an expanded focus on energy storage, transmission upgrades, and programs to support industrial electrification and downstream processing (hilirisasi).

MEMR and PLN are now eying an increase of power generation capacity of 69.5 GW over the coming decade. This overall target is to be achieved through the development of 42.6 GW of new and renewable energy (NRE) plants, 10.3 GW of energy storage infrastructure (comprising of hydro pumped storage and BESS), and 16.6 GW of non-NRE sources (comprising of gas and coal-fired power plants). The below chart visualizes these targets and spread for each of the main energy sources:

In terms of the phasing of these investments over the next decade, the new RUPTL envisages that 27.9GW of the target, including the bulk of the new thermal capacity (gas-fired and CFPPs), will be developed in the initial five years (2025-2029), and 41.6GW will be developed in the following five years (2030-2034) when the majority of the NRE and storage will be developed. In addition, the RUPTL projects 10.3GW of energy storage capacity to ensure system flexibility, particularly to manage intermittency from variable renewable energy (VRE) sources.

In terms of geographic spread, the planned increase in generation capacity and transmission infrastructure covers all regions but with almost half (48.2%) of the new capacity earmarked for the Java-Madura-Bali region,¹ followed by Sumatra (21.7%), Sulawesi (14.9%), Kalimantan (8.34%), and Maluku, Papua and Nusa Tenggara (6.76%) respectively. 

The plan also includes the development of new thermal generation capacity, especially between 2025-2029 with 16.6GW to be developed, including mine-mouth coal plants and flexible gas peakers to support baseload and reserve requirements. This underlines the transitional nature of the current policy, which blends clean energy expansion with reliability considerations.

A new narrative is also emerging around electrification for industry, explicitly supporting "hilirisasi" (or downstream processing industries) which are a cornerstone of the new administration's agenda and growth plans for the Indonesian economy. PLN is now authorized to fast-track projects serving strategic industries or National Strategic Projects (PSNs), with the potential to adjust the RUPTL accordingly. This creates space for additional, off-RUPTL projects subject to ministerial approval. These shifts signal that while decarbonization remains a clear goal of the GOI, security of supply and industrial development continue to drive planning decisions, with material implications for project selection and regulatory treatment.

In support of the development of new generation capacity, including substantial amounts of intermittent capacity (solar and wind) requiring balancing across multiple grids, MEMR and PLN also plan substantial investments into new transmission lines and substations with targets of 47,758 kms and 107,950 MVA respectively over the next decade. These are linked with PLN’s Smart Grid strategy, which is aimed at reducing technical losses and enabling better load management. Part of the focus here will be to improve interconnection of regional grids outside of the main Java-Madura-Bali (JAMALI) grid, especially in Sulawesi and Kalimantan.

The total cost involved in the implementation of the plan is estimated at approximately IDR 2.967 quadrillion (USD 182.6 billion) of which USD 130.8 billion is required for new generation capacity and the remainder going to transmission and substations (USD 34.7 billion), as well as for other purposes such as distributed energy and "village power" (listrik desa), and ancillary services including the maintenance of generation and transmission assets (USD 16.5 billion). The chart below provides a schematic overview of the anticipated investment needs of the new RUPTL:

In terms of the sources of investment required to implement this ambitious plan, the new RUPTL provides that a clear majority (73%) of the new generation capacity (and especially new renewable energy and gas-fired capacity) is expected to be developed and funded by the private sector through IPPs with PLN in charge of the balance. It is also expected that PLN will be responsible for the development and funding of most of the new transmission and grid infrastructure although there are renewed discussions about the possible involvement of the private sector in supporting part of this effort including through the public private partnership (PPP) scheme.

Finally, the new RUPTL also stresses the positive impact of the investments required in terms of job creation and indirect economic impact with an estimated 1.7 million jobs created as a result of the implementation of the plan. These jobs will cover the typical project lifecycle of industrial manufacturing, construction, operation and maintenance, for both power plants and supporting infrastructure (transmission, substations and distribution), with an estimated 91% of jobs created being labelled by MEMR and PLN as 'green jobs'.

The new RUPTL contains two main electricity infrastructure development pathways that may be adopted by PLN. Each of these differs in ambition, assumptions and implementation pace.

The RE Base scenario reflects a “most likely to happen” trajectory based on:

• Workability constraints: project completion is tied to PLN's practical implementation capacity and financial viability;

• Cost and reliability optimization: prioritizes system stability and affordable tariffs, rather than aggressive decarbonization; and

• Limited ambition on NRE penetration: while a significant amount of new renewable energy capacity is included, the pace of rollout is slower and project selection is constrained by feasibility and system readiness.

In comparison, the ARED Scenario (for Accelerated Renewable Energy Development) is a more ambitious and policy-driven scenario, intended to significantly accelerate clean energy transition by:

• Targeting GHG reduction of 151 million tons CO₂ by 2030, compared to the Business-as-Usual (BAU) scenario;
• Faster COD timelines for renewable projects and broader adoption of VRE (Variable Renewable Energy);
• Large-scale implementation of co-firing (biomass and ammonia) for existing coal plants;
• Significant grid upgrades, including the Sumatra-Java interconnection to allow power transfer from hydro and geothermal sources in Sumatra to load centres in Java;
• VRE Scale-Up target of 11.9 GW by 2030, including rooftop solar and floating solar programs; and
• Storage target of 3.5 GW by 2030, including BESS and pumped hydro.

Both scenarios are used in the 2025-2034 RUPTL to illustrate possible development trajectories and should be considered in conjunction when evaluating project opportunities and policy risks.

To implement the RUPTL, PLN will primarily focus on the following strategies:

Additional Capacity, Development and Funding

The RUPTL 2025–2034 presents a significant scale-up in opportunities for Independent Power Producers (IPPs), with over 49.1 GW of capacity to be developed by IPPs—by far the largest allocation in any RUPTL to date. This shift reflects a marked departure from the relatively subdued procurement landscape of the past five years and points to a future of more frequent, and larger-scale, tenders. 

The scale of the program, especially under the ARED scenario, will require substantial private sector participation to meet targets for solar, wind, hydro, geothermal, and energy storage deployment—particularly in areas outside Java-Bali and in support of industrial electrification.

This growth raises questions about the procurement models PLN will use to deliver this volume of IPP projects. In recent years, the prevailing scheme has involved PLN subsidiaries—most notably PLN Indonesia Power (PLN IP) and PLN Nusantara Renewables (PLN NR)—taking equity stakes of between 15 to 51% in IPP projects through joint ventures with private partners. While this structure has enabled some risk-sharing and internal buy-in, it will have to be seen whether it allows for further scalability, or whether alternative structures and procurement models need to be applied to be able to deliver on the ultimate objectives of the RUPTL with efficiency and to attract a maximum amount of private capital. 

Key legal and commercial positions that are frequently adopted in PLN PPAs - particularly around dispatch rights, curtailment compensation, termination rights and tariff setting - will also be essential for unlocking consistent, repeatable and long-term non-recourse financing. Early engagement with PLN and alignment with its evolving planning and procurement processes will be essential as this wave of IPP development begins to take shape.

Surge in new Transmission and Distribution Infrastructure

To support this significant increase in generation capacity, PLN plans to develop 47,758 kilometres of new transmission lines and 107,950 MVA of new substations. 

On the distribution side, PLN will develop 91,810 kilometres of new Medium Voltage Networks, 106,188 kilometres of new Low Voltage Networks, and install 18,407 MVA of distribution transformers.

It will have to be seen whether any form of private participation may be involved in the delivery of this important pipeline of projects and investments besides the classic EPC procurement model.

Green Enabling Super Grid 

Aside from PLN's development plans for generation, transmission and distribution, the 2025-2034 RUPTL puts a particular emphasis on plans to develop a "Green Enabling Super Grid" consisting of approximately 48,000 kms of additional transmission lines and 108,000 MVA of additional substations. The objective of this initiative is to overcome the mismatch between the potential of NRE - largely concentrated in regions with lesser population density such as Sumatra, Kalimantan, Sulawesi, and Nusa Tenggara - and the centres of demand in Java, Madura and Bali. 

This Super Grid will be supported by smart grid technologies and flexible generation capabilities, with the goals of enhancing system efficiency, reliability, sustainability, and cross-island interconnectivity. Planned interconnections within the Green Enabling Super Grid include Sumatra–Java (ISJ), Kalimantan–Java (IKJ), the Sulawesi Backbone, and the Sumba–Bali–Java Corridor, all of which are designed to mitigate supply-demand mismatches, meet growing electricity needs, and maximize the utilization of renewable energy resources.

Smart Grid Strategy

A further area of focus of the new RUPTL involves the development of PLN’s Smart Grid strategy which integrates advanced information and communication technologies into the national electricity network to improve efficiency, reliability, and sustainability. The Smart Grid system is aimed at accommodating both conventional and intermittent renewable energy sources while enabling customer participation and enhancing distributed generation. Its implementation spans across generation, transmission, and distribution infrastructure and is to be coordinated through PLN's Smart Control Centre, which serves as the central hub of the system.

The roadmap for Smart Grid implementation consists of three phases: Phase 1 (2027–2028) in 12 provinces, Phase 2 (2029–2030) in 17 provinces, and Phase 3 (2031–2033) in the remaining 9 provinces. Pilot projects are earmarked in Bali and Belitung, with microgrid initiatives in Nusa Penida, Biak, and Bawean. BESS will also be integrated in local grids, especially in regions like the new capital city (IKN), Nusa Tenggara, and isolated systems, to support energy smoothing, arbitrage, and backup power.

The rolling out of smart grid infrastructure is also meant to improve the level of penetration of intermittent renewable generation, primarily for abundant solar and wind resources. The chart below indicates the targeted increase in the solar and wind generation capacity of the next decade as a result of this policy:

The RUPTL identifies robust regional renewable energy pipelines, but also illustrates uneven distribution and transmission constraints across the archipelago. A brief summary (based on the ARED Scenario) is set out below:

NRE Power Plant Development Plan RE Base Scenario (MW)

* Excluding the addition of Rooftop Solar Power Plant Quota

NRE Power Plant Development Plan ARED Scenario (MW)

* Excluding the addition of Rooftop Solar Power Plant Quota