Prabowo Pushes Palm-Oil-Based Fuel and Large-Scale Solar Power, IESR Flags Up Costs
JAKARTA, KOMPAS.com - The government’s efforts to accelerate energy independence through palm-oil-based fuels and the construction of large-scale Solar Power Plants (PLTS) are still seen as facing economic viability and industry readiness challenges.
President Prabowo Subianto has previously stated that the government is accelerating the development of energy based on domestic resources to reduce Indonesia’s dependence on imported fossil fuels. The government is also examining the production of petrol from crude palm oil (CPO) and the development of energy from coal through gasification technology and synthetic fuels.
‘IESR welcomes the government’s bold ambitions to accelerate the energy transition as a means to increase energy independence and resilience,’ said Raditya Wiranegara, Director of Research and Innovation at the Institute for Essential Services Reform (IESR), in a statement on Wednesday (20 May 2026).
‘Regarding the 100 GW PLTS vision, IESR views this aspiration as a positive signal of political commitment,’ he added.
Therefore, IESR provides notes on the rationalisation of the implementation stages so that the large target can be executed sustainably without neglecting system stability, industrial readiness, and the availability of human resources.
In addition to developing PLTS, the government also plans to accelerate solar production based on palm oil and examine the production of petrol from crude palm oil (CPO).
The government is also preparing to develop energy from coal through gasification technology and the production of synthetic fuels. Furthermore, agricultural waste is said to be utilised as a cheap and accessible alternative energy source for the public.
As the link in this energy diversification strategy, IESR regards reducing the fossil energy mix as an important step to achieving national energy independence.
‘The crisis currently unfolding is essentially a fossil energy crisis driven by Indonesia’s heavy dependence on fossil energy commodities, whose prices are highly volatile due to various factors in global markets,’ said Deon.
‘Therefore, to achieve energy independence and sovereignty as Indonesia envisions, reducing the fossil energy mix is an absolute necessity,’ he continued.
IESR considers that proposals to utilise palm-oil-based fuels or coal could raise energy costs and may not necessarily address the root problem if a similar crisis recurs in the future.
According to IESR, these various options are inherently more expensive energy sources than the fossil fuels they replace, thereby risking increasing the fiscal burden in the energy sector.
Moreover, palm oil and coal are also exposed to market risks similar to those facing petroleum fuels.
IESR also warned of potential clashes between the energy independence targets and the agenda for food self-sufficiency.
Rising demand for palm oil and corn waste for energy needs could threaten their availability for cooking oil production and livestock feed required by households and farmers.
IESR also urged the government to focus on increasing the share of renewable energy and energy efficiency through electrification of the transport, industrial, and domestic sectors.