Energy Transmission and Indonesia's Economic Constitution

For decades, Indonesia’s economic development has been synonymous with the construction of roads, ports, airports, dams, and industrial zones. However, entering the era of energy transition, one type of infrastructure is becoming increasingly decisive for investment and economic growth, yet often escapes public attention: the energy transmission network. Many still view transmission lines merely as cables connecting power plants to consumers. In the 21st century, however, energy transmission has evolved into strategic infrastructure that determines the location of industries, data centres, new economic zones, and even a nation’s competitiveness. In this context, energy transmission is no longer just a technical asset of the state electricity company; it has become part of Indonesia’s economic constitution.

This idea may sound exaggerated. But upon deeper examination, Indonesia’s entire economic transformation agenda rests on the nation’s ability to provide reliable energy connected through an adequate transmission network. Indonesia is currently pushing for mineral downstreaming, the development of an electric vehicle ecosystem, battery industries, AI-based data centres, high-tech manufacturing, and a green economy. All these sectors share a common requirement: a large, high-quality, and continuously available electricity supply. No global-scale data centre will invest in a region with a weak electricity system. No battery factory can operate optimally without a stable grid. No green industrial zone can develop if transmission capacity is unable to channel electricity from generation sources to production centres.

In other words, modern investment no longer seeks only land, ports, or fiscal incentives. It also seeks energy network capacity. This is the fundamental shift occurring globally. In the 20th century, energy followed economic growth; power plants were built after industrial areas developed and demand increased. In the 21st century, this relationship is reversing. The availability of energy and transmission networks is becoming the factor that determines where investment will move. This phenomenon is visible in various countries. The United States is accelerating transmission network construction to support the investment boom in data centres and AI-based industries. The European Union has placed electricity grid modernisation as a priority within the European Green Deal. China is building thousands of kilometres of ultra-high voltage (UHV) networks to connect renewable energy sources in the west with industrial centres in the east. They understand that the transmission network is not just an electricity project, but an instrument of economic policy.

Indonesia faces even greater challenges and opportunities. As an archipelagic nation, its primary energy sources are scattered across various regions. Hydropower potential lies in Kalimantan and Papua. Geothermal potential is spread across Sumatra, Java, Sulawesi, and Nusa Tenggara. Solar and wind potential also develops in areas not always close to electricity consumption centres. This means the economic value of these resources can only be realised if a transmission network is available to connect generation sites with industrial zones and demand centres. From this perspective, the transmission network essentially serves the same function as toll roads do for national logistics. Toll roads connect producers to markets. The transmission network connects energy sources to economic activity. Without this connectivity, economic potential will remain just that—potential, not added value.

Here, the relevance of Article 33 of the 1945 Constitution gains new meaning. The constitution mandates that the land, waters, and natural resources contained therein shall be used for the greatest prosperity of the people. So far, our attention has focused more on the control of natural resources like oil, gas, coal, nickel, copper, or bauxite. Yet, controlling resources alone is insufficient. Prosperity can only be created if these resources can be distributed and utilised efficiently. In the context of modern energy, transmission is the link between natural wealth and public prosperity. Geothermal energy in a remote area has no economic value if it cannot be channelled to an industrial zone. The same applies to hydropower, solar, or wind power plants. Without a transmission network, all this potential will remain isolated. Therefore, the development of the energy network should be viewed as a tangible implementation of the mandate of Article 33. The state is not only obliged to control energy resources but also to ensure the availability of infrastructure that allows these resources to provide maximum benefit to society.

The construction of the transmission network must also be seen as a long-term economic investment, not merely infrastructure spending. Every kilometre of a new network opens opportunities for the emergence of industrial zones, increases the reliability of the electricity system, expands investment access, accelerates electrification, and strengthens domestic market integration. In the long term, transmission will even become the foundation for regional energy integration through the ASEAN Power Grid. However, before Indonesia can connect with neighbouring countries, the national network must be strengthened first. Regional integration will only succeed if each country has a strong domestic foundation.