As part of the Innovating New Incentive Mechanisms for Energy Transition Projects initiative, ETP collaborated with the Coordinating Ministry for Economic Affairs (CMEA) to take a closer look at how Indonesia incentivizes and disincentivizes its energy future. The collaboration assessed existing mechanisms for renewable energy development and the reduction of coal-fired power plants (CFPPs), building on the foundation laid by Presidential Regulation No. 112/2022. At stake were not only policy design choices, but their fiscal and macroeconomic consequences.

Those discussions took a concrete turn on December 17, 2025, when CMEA and ETP unveiled a landmark roadmap in Jakarta. Moving beyond theory, the initiative set out the technical and fiscal architecture required to guide Indonesia toward its Net Zero 2060 ambition.

Through regulatory analysis and consultations with key stakeholders, the project identified five high-impact levers capable of accelerating the transition:

• Bankable Renewables: Adjusting tariffs to reflect current costs and ensure that solar and wind projects are truly investor-ready.
• Fast-Track Approvals: Granting “National Strategic Project” status to green initiatives, streamlining tenders and cutting through red tape.
• Strategic Infrastructure: Prioritizing power lines near renewable energy clusters to reduce energy loss and investment risk.
• Market-Based Coal Pricing: Shifting incentives to make renewables the natural choice, while maintaining protections for vulnerable households.
• Grid Stability: Introducing a “Right-to-Match” privilege that allows developers to replace retiring coal plants with clean energy capacity.

By tackling regulatory blind spots and less visible obstacles, such as transmission bottlenecks and distorted pricing, the partnership is laying the groundwork for a more resilient, sustainable economy, one designed to serve both the environment and the people who depend on it.