Indonesia’s captive coal generation is equivalent to more than 50% of on-grid coal generation, new analytical approach finds

“Mandating the limit of coal use in the captive power sector could accelerate Indonesia’s green economic ambitions. As coal reserves become increasingly constrained, harnessing Indonesia’s abundant solar resources could unlock its economic potential and establish the country as a global green-industry leader,” according to Dr Dinita Setyawati, External Affairs & Strategic Impact Lead, Ember.

The report notes that better data depends on operators as much as on regulators. MEMR Regulation No 22/2019 already requires energy businesses to report emissions through the APPLE-Gatrik platform, the AMPERE-Gatrik platform launched in 2021 to collect operational data from licence holders, and HEESI 2025 moved to a licence-based classification of plants, an improvement on the previous on-grid/off-grid split.

However, compliance varies widely across companies. For example, Ditjen Gatrik’s 2025 performance report notes missing emissions and operational data, and the directorate raised reporting compliance with licence holders at a meeting in May 2026. In addition, complete submissions from the companies that operate the plants are also missing due to the voluntary nature of the reporting compliance.

“Captive coal power has been massively driven by Indonesia’s metal downstreaming boom, placing industrial power supply at the centre of national planning. How this capacity is steered will determine not only the pace of the country’s energy transition, but also its global competitiveness as overseas markets embed carbon metrics into trade policy. Bridging top-down national reporting in HEESI with a bottom-up approach establishes the transparent baseline essential for credible decarbonisation. Prioritising this integration is critical if Indonesia is to align its primary industrial growth drivers with its climate ambitions,” said Katherine Hasan, analyst at the Centre for Research on Energy and Clean Air (CREA).

Export markets add commercial risk of relying on coal for power needs. The EU’s Carbon Border Adjustment Mechanism (CBAM) prices the carbon embedded in imported iron and steel, aluminium, cement and fertiliser, and exporters can only evidence a footprint that has been measured and verified.

Renewable trajectory is needed to avoid further carbon lock in in the non nickel sector. Currently, hydro and bio and solar supply around 10% of captive power, concentrated outside nickel. Bioenergy powers pulp, paper and palm oil mills through combined heat and power systems that burn process residues on site, at scales from 1-2 MW turbines up to the 535 MW Kerinci mill in Riau. Captive solar was also recorded in the pulp and paper industry, with around 70 GWh of estimated generation, and also been used as alternate fuels in some captive coal plants. This is a first step for the cost-effective solar paired with battery storage to be installed to meet round-the-clock industrial electricity demand.

Ember’s report positions the industry-level estimates as an input to MEMR’s existing reporting work rather than a substitute for it, alongside capacity tracking by Global Energy Monitor, CREA, IESR and Earthwise.