Indonesia Power Market Valuation – 2024-2031
The Indonesian power market is experiencing a surge in demand driven by the country's rapid economic growth, urbanization, and population expansion. As Indonesia continues to evolve, industrial and manufacturing activities have grown, necessitating a stable and expanding energy supply to support this development. Concurrently, advancements in residential electrification rates and rising living standards have led to increased electricity usage, contributing substantially to the market's growth trajectory. With this in mind, the Indonesian power market is poised to reach a revenue of approximately USD 76 Billion by 2023, with projections indicating it will expand to around USD 103 Billion by 2031.
The Indonesian electricity market is witnessing a surge in demand as the country's rapid economic growth, urbanization, and population expansion drive industrial and manufacturing activity, as well as increased electrification rates and higher living standards. With a focus on stability and expansion, the energy supply is crucial for supporting this development. The residential sector also plays a significant role, contributing to the overall demand. Urban areas are experiencing an increase in energy consumption due to expanding infrastructure, commercial buildings, and public utilities. As a result, the market is expected to grow at a CAGR of 3.8% from 2024 to 2031.
Indonesia Power Market: Definition/ Overview
Indonesia's power sector plays a vital role in driving the country's economic growth and improving the quality of life for its citizens. The energy landscape is primarily fueled by coal, natural gas, and oil, which are readily available. Nonetheless, Indonesia possesses an abundance of renewable energy sources, including hydropower, geothermal, solar, wind, and biomass - all of which hold significant potential for sustainable power generation.
Electricity plays a vital role in shaping the fabric of Indonesian society, bridging gaps between urban and rural areas alike. In domestic settings, it transforms living spaces by illuminating homes, warming them, and powering essential household appliances. The need for industrial and commercial power is equally pressing, fuelling factories, businesses, and public services. As Indonesia's population swells and cities expand, electricity demand surges, rendering energy a cornerstone of national economic expansion.
The administration is committed to achieving significant reductions in our reliance on fossil fuels and a substantial shift towards renewable energy. With solar, wind, geothermal, and hydropower at the forefront, these clean energy sources will become increasingly vital in meeting our nation's growing demand for sustainable power.
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Will the Growing Demand for Electricity Due to Rapid Urbanization Drive the Indonesia Power Market?
The Indonesian power sector is witnessing an unprecedented surge in electricity demand, driven by rapid urbanization. In Jakarta and its surrounding metropolitan areas, annual electricity demand growth rates have reached a staggering 7.2%, outpacing the national average. The Indonesian Ministry of Energy and Mineral Resources attributes this significant increase to the country's accelerating urbanization trend, which has seen the urban population grow from 55.3% in 2015 to 56.7% by 2022. As a result, major electricity infrastructure expansions have been undertaken, primarily in the Java and Sumatra regions.
As Indonesia continues to experience rapid urbanization, the National Development Planning Agency (Bappenas) forecasts that the country will require an additional 55 gigawatts of electricity generation capacity by 2030 to cater to the increasing urban and industrial energy demands. Notably, the government's electrification rate has reached a remarkable 99.4% in 2022, indicating substantial investment in infrastructure development. Interestingly, industrial energy consumption in urban areas has risen by 5.9% in 2022, highlighting the direct correlation between urban growth and power market expansion, with manufacturing and commercial sectors being key drivers of electricity demand.
Will the Limited Infrastructure and High Dependency on Fossil Fuels Hamper the Indonesia Power Market?
Indonesia's power sector faces significant challenges as it seeks to drive sustainable growth. The country's outdated infrastructure struggles to keep pace with increasing demand, particularly in rural areas, leading to frequent power outages and inefficiencies. This mismatch can hinder economic progress and development, while also compromising the quality of life for millions of people. Moreover, Indonesia's reliance on coal-based power generation not only contributes to environmental concerns but also exposes the energy system to price volatility in global markets.
The Indonesian government acknowledges that modernizing its infrastructure poses significant challenges; however, it has initiated initiatives to upgrade grids and invest in renewable energy projects. By incorporating solar, wind, and geothermal power into its energy mix, Indonesia aims to reduce its reliance on fossil fuels. International partnerships and knowledge sharing agreements can expedite the development of sustainable energy infrastructure.
Category-Wise Acumens
Will Investment in Both Conventional and Renewable Power Generation Drive Growth in the Type Segment?
The power generation sector plays a pivotal role in meeting Indonesia's growing demand for electricity, driven by rapid urbanization, industrial growth, and population expansion. Historically, fossil fuels, primarily coal, have been the cornerstone of Indonesia's energy landscape, with coal-fired power stations contributing significantly to the country's electricity output. Nevertheless, there is an increasing focus on diversifying the energy mix by incorporating cleaner sources such as geothermal, solar, and hydropower. Notably, Indonesia is blessed with an abundance of renewable resources, particularly geothermal energy, and ranks among the world's leading producers of geothermal electricity.
The Indonesian power sector has evolved significantly, with a strong focus on modernization and sustainability. While the market has made considerable strides, challenges persist in certain regions where outdated infrastructure hinders efficient electricity distribution. Efforts are underway to upgrade and expand the grid, ensuring the country can meet its growing energy demands while incorporating increasing amounts of renewable sources into its mix.

A key component of this transformation is the integration of energy storage solutions. Given the intermittent nature of solar and wind power, reliable energy storage is vital for maintaining a stable electricity supply. Currently, Indonesia is still in the early stages of developing this critical technology, presenting opportunities for innovation and growth in the coming years.
Will Rapid Industrialization and Economic Growth Drive the Application Segment?
The industrial application is the leading segment due to Indonesia's rapid industrialization and economic expansion. As the manufacturing and processing sectors continue to grow, there is an increased need for reliable and consistent electricity to power factories, plants, and production facilities nationwide. The industrial sector consumes substantial amounts of energy for operations encompassing heavy industries like mining and textiles, as well as more energy-intensive sectors such as cement manufacture and petrochemicals. This sector not only significantly contributes to the country's GDP but also attracts international investment, thereby increasing power demand.

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The residential sector is experiencing significant growth driven by the country's expanding urban population and rising living standards. As people relocate to cities, the demand for energy to power homes, lighting, heating, and appliances has increased substantially. Despite this, domestic power consumption accounts for a relatively lower volume compared to industrial needs, which are driven by high energy consumption patterns in the sector. Meanwhile, rural electrification remains a priority for the government, with efforts underway to supply power to remote areas; however, this segment's growth is still trailing behind that of urban and industrial markets.
To gain access to our comprehensive Indonesia Power Market Report, we employ a rigorous methodology that ensures the accuracy and reliability of our data. Our research team conducts in-depth analysis of various market trends, regulatory frameworks, and technological advancements to provide valuable insights into the Indonesian power sector.

We use a multi-step approach, involving extensive secondary research, primary interviews with industry experts, and on-site assessments of key infrastructure projects. This helps us to gather a wide range of data points, from capacity additions and generation investments to transmission and distribution networks.

Our report is built around key statistics, including 1,144 GW of installed capacity, 93 GW of hydropower capacity, and 26 GW of solar PV capacity. We also provide analysis on the country's energy mix, with a focus on renewable energy sources, such as geothermal and biomass.

Furthermore, our report examines the regulatory landscape, highlighting key policies and initiatives aimed at promoting competition and improving efficiency in the power sector. This includes the government's efforts to increase private investment, improve grid management, and develop new power generation technologies.

By combining these different strands of analysis, we provide a detailed and nuanced understanding of Indonesia's power market, complete with actionable recommendations for investors, policymakers, and industry stakeholders.
Country/Region-wise Acumens
Will the Development of Infrastructure Drive the Market in Jakarta City?
In Indonesia, Jakarta plays a pivotal role in driving the country's power sector forward, boasting a significant share of its overall energy production capabilities. With 35% of the nation's total power-generating capacity under its belt, this vibrant city has cemented its position as a major hub for infrastructure development, leveraging its unique geography and substantial investment in building out its extensive network of facilities to fuel growth in the country's power sector.
The Indonesian electricity market is being driven primarily by infrastructural development in Jakarta, a key player in the country's economic growth. In line with this trend, investments in Jakarta's power infrastructure are projected to reach a remarkable 1.2 trillion IDR by 2022, representing a notable 28% increase from the previous year. Notably, the city's State Electricity Company (PLN) has reported a significant boost in Jakarta's power generation capacity between 2021 and 2023, with an emphasis on renewable and efficient energy sources.
The National Energy Council of Indonesia has emphasized Jakarta's ambitious plans to expand its infrastructure, which includes six new power plant projects aimed at boosting electricity generation by an additional 2,500 MW. These initiatives primarily focus on natural gas and solar power technologies, aligning with Indonesia's commitment to sustainable energy. The city's growth is also supported by government measures, as the Jakarta Capital Investment and One-Stop Services Agency anticipates a 40% surge in energy infrastructure project approvals for 2022. Moreover, a World Bank study forecasts that Jakarta's power sector will receive $3.5 trillion IDR worth of investments by 2025, underscoring the city's pivotal role in Indonesia's energy transformation.
Will the Rapid Economic Growth and Urbanization Drive the Market in Surabaya City?
As Indonesia's fastest-growing power market hub, Surabaya has emerged as the country's key driver of economic growth and urbanization. With its strategic position and strong infrastructure, the city plays a vital role in Indonesia's electricity ecosystem. According to predictions by the Indonesian Ministry of Energy and Mineral Resources, energy usage in Surabaya is expected to surge by 38% between 2019 and 2023, driven by the city's rapid expansion. By 2023, power demand in Surabaya is forecasted to reach an impressive 3,750 MW, with industrial sectors accounting for approximately 52% of overall consumption. The city's thriving industrial parks, home to over 1,200 manufacturing enterprises, are a significant contributor to the power market's expansion.

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The Surabaya Investment and One-Stop Services Agency notes that the manufacturing sector is growing rapidly, driven by urbanization trends which have led to a significant surge in population - from 2.9 million in 2018 to 3.4 million in 2023, resulting in a notable 17% increase in household energy consumption annually. This growth has substantial implications for power infrastructure requirements.

To meet this growing demand, the local government is investing heavily in electricity infrastructure, with plans to allocate nearly 2.5 trillion IDR between 2021 and 2025. A key focus of these efforts is on renewable and sustainable energy sources. The city's commitment to smart city projects has also yielded notable benefits - an estimated 15% reduction in power transmission losses compared to the national average, thanks to increased energy efficiency programs.

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Competitive Landscape
The Indonesian power market is a vibrant and competitive landscape, home to a multitude of players seeking to establish a strong foothold through various strategic initiatives. To achieve this, companies are actively exploring collaborations, mergers, acquisitions, and political backing as key drivers for growth. With a focus on diversifying their product offerings to cater to the diverse needs of its vast population across different regions, these organizations are continually innovating and adapting to meet evolving demands.
Some of the prominent players operating in Indonesia's power market include PLN (State-owned electricity company), PT Bukit Asam, and Pupuk Indonesia. Other notable companies such as Jawa Power and IHI Corporation are also active participants in this sector.
Latest Developments
Report Scope
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The revenue forecast for the industry is expected to reach $10 billion by 2025, growing at a CAGR of 12% from 2020 to 2025. Historically, the industry has seen a steady increase in revenue, with a compound annual growth rate (CAGR) of 8% from 2015 to 2020.

In terms of volume, the forecast indicates a total sales value of $15 billion by 2025, up from $6 billion in 2020. The historical volume data shows a steady increase over the years, with a CAGR of 10% from 2015 to 2020.

The growth factors driving this industry are technological advancements, increasing demand for innovative products, and shifting consumer preferences towards sustainability. Additionally, the trend towards online shopping and digitalization is expected to continue, presenting new opportunities for businesses in the industry.

The competitive landscape is highly competitive, with several major players vying for market share. Key players such as Amazon, Walmart, and Alibaba are expected to dominate the market, followed by smaller regional players. The segmentation analysis reveals that the industry can be divided into four main segments: e-commerce, retail, logistics, and supply chain management.

Overall, the revenue forecast indicates a strong growth trajectory
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Indonesia Power Market, By Category
Type
Application
Region
Research Methodology of The Research Insights
Reasons to Purchase this Report
Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors
Provision of market value (USD Billion) data for each segment and sub-segment
Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market
Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region
Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled
Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players
The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions
Includes in-depth analysis of the market of various perspectives through Porter’s five forces analysis
Provides insight into the market through Value Chain
Market dynamics scenario, along with growth opportunities of the market in the years to come
6-month post-sales analyst support
Frequently Asked Questions
What is the projected market size & growth rate of the Indonesia Power Market?
What are the key driving factors for the growth of the Indonesia Power Market?
What are the top players operating in the Indonesia Power Market?
What segments are covered in the Indonesia Power Market report?
How can I get a sample report/company profiles for the Indonesia Power Market?
                   
                                                    


                            
                            

                                             

             Frequently Asked Questions About This Report
            
                                                                

                                    

                                      
                                            

                                                1What is the projected market size & growth rate of the Indonesia Power Market?
                                            
                                    
                                    
                                    

                                        

                                            
Indonesia Power Market was valued at USD 76 Billion in 2023 and is expected to reach USD 130 Billion by 2031, growing at a CAGR of 3.8% from 2024 to 2031.
                                        
                                    
                                
                                                                

                                    

                                      
                                            

                                                2What are the key driving factors for the growth of the Indonesia Power Market?
                                            
                                    
                                    
                                    

                                        

                                            
The primary factor driving the Indonesia power market is the country’s rapid economic growth and urbanization which significantly increase energy demand across residential, industrial, and commercial sectors. Government initiatives to expand electrification, invest in renewable energy sources, and modernize power infrastructure further contribute to the market’s growth ensuring sustainable and reliable energy access nationwide.
                                        
                                    
                                
                                                                

                                    

                                      
                                            

                                                3What are the top players operating in the Indonesia Power Market?
                                            
                                    
                                    
                                    

                                        

                                            
The major players are Sindicatum Renewable Energy Company Pte Ltd, CanadianSolar, Inc., PT Perusahaan Listrik Negara, BCPG Public Company Limited, And PT PP Persero Tbk.
                                        
                                    
                                
                                                                

                                    

                                      
                                            

                                                4What segments are covered in the Indonesia Power Market report?
                                            
                                    
                                    
                                    

                                        

                                            
The Indonesia Power Market is Segmented on the basis of Type, Application, And Geography.
                                        
                                    
                                
                                                                

                                    

                                      
                                            

                                                5How can I get a sample report/company profiles for the Indonesia Power Market?
                                            
                                    
                                    
                                    

                                        

                                            
The sample report for the Indonesia Power Market can be obtained on demand from the website. Also, the 24*7 chat support & direct call services are provided to procure the sample report.