The energy transition is a global challenge faced by all regions of the world. It requires a shift to sustainable energy sources to meet growing energy demands while replacing fossil fuels. According to the International Energy Agency (IEA), 66 percent of the electricity generated in Indonesia in 2022 came from coal-fired power plants (CFPPs). The Institute for Essential Services Reform (IESR) reported in 2022 that these plants emit 800–1,200 kg CO2e per MWh, making CFPPs the largest contributors to greenhouse gas (GHG) emissions in Indonesia. This positions Indonesia as one of the highest GHG emitters globally. As a signatory to the commitment to combat climate change under COP 29, Indonesia must address this pressing issue.

In recent years, wind and solar energy have become the poster children of renewable energy development. They are hailed as the solution to the energy trilemma of affordability, reliability, and sustainability, as mandated by the United Nations Sustainable Development Goal (SDG) number 7. Last year, China, Europe, and the United States each set new records for solar installations within a single year, according to the International Energy Agency (IEA). Additionally, the world added enough wind energy capacity to power nearly 80 million homes, marking a record-breaking achievement. Politicians and decision-makers often champion these technologies as cheap and fast to deploy, making them appealing for swift implementation. However, the realities of their limitations, particularly during periods of low sunshine and wind, known as “dunkelflaute”, highlight significant challenges in grid balancing and the hidden costs of variable renewable energy (VRE).

Dunkelflaute, German for "dark doldrums," describes periods of minimal solar and wind availability, posing a major challenge for energy grids reliant on VRE. During these times, balancing the grid to match electricity consumption with production becomes increasingly complex. To maintain grid stability, fossil fuels are often used as balancing power sources, which increases carbon emissions and drives up electricity prices due to the higher costs of starting and operating backup generators on short notice, particularly for gas-fired plants during volatile energy markets. The intermittency of wind and solar means that the excess energy produced must be stored for later use. This requires expensive storage technologies such as batteries, pumped hydro, or flywheel energy systems. Moreover, integrating VRE into the grid necessitates extra ancillary services, such as frequency regulation, voltage control, and spinning reserves, to stabilize the grid and prevent blackouts. These services further contribute to the hidden costs of VRE by requiring additional infrastructure and operational complexity. Coupled with the costs of storage, grid integration, and backup systems, these factors dramatically increase the true cost of VRE.

Many advocates for wind and solar rely on the Levelized Cost of Electricity (LCOE) to compare the economic viability of different energy sources. While LCOE is useful for comparing similar generation technologies, it fails to account for the unique challenges of VRE, such as intermittency and non-dispatchability. A more accurate metric is the Levelized Full System Costs of Electricity (LFSCOE), which includes all costs associated with reliably providing electricity from a specific source, assuming it must supply the grid independently with the necessary storage and backup. For instance, in a recent study using data from Germany, the mean LFSCOE for solar was $1,380 USD/MWh, wind was $483 USD/MWh, while nuclear power stood at a far lower $105 USD/MWh. Nuclear power’s high capacity factor (above 80 percent) makes it an unparalleled baseload power source, capable of providing electricity 24/7 without the need for extensive storage or backup systems.

Learning from global energy challenges, Indonesia must tackle three critical priorities to achieve a sustainable energy transition. First, the country must gradually phase out its reliance on coal-fired power plants. Second, Indonesia must substantially scale up its renewable energy production capacity (including geothermal and hydropower) to ensure a diversified and resilient energy mix. As a nation rich in geothermal resources, Indonesia is well-positioned to leverage this sustainable energy source. However, geothermal and hydropower alone are unlikely to fully meet the growing baseload power needs of the country, mainly due to the resource distribution of these energy sources. This brings in the third point, Indonesia needs to adopt and accelerate the deployment of nuclear energy. Small Modular Reactors (SMRs) present a particularly promising option, as their modular design enables faster deployment and lower costs compared to traditional nuclear reactors. By integrating SMRs with its geothermal and hydropower assets, Indonesia can build a reliable, scalable, and sustainable energy system for the future. In the meantime, an intermediate solution such as natural gas with significantly lower emissions compared to other fossil fuels needs to be widely deployed in sectors with the highest energy demand.

The purpose of this article is not to discourage the development of wind and solar. On the contrary, VRE will play a vital role in the global energy transition. However, their limitations mean they cannot stand alone. A sustainable and resilient energy future requires a balanced mix where geothermal, hydropower, and nuclear to provide the backbone of reliable baseload power, supplemented by wind and solar to meet peak demands and reduce carbon footprints. Indonesia’s energy strategy must embrace this balanced approach, prioritizing long-term reliability and sustainability over short-term gains. Only then can the country achieve its energy goals and transition to a low-carbon future.

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Rizky Amanda Syahrul is a geologist and strategist currently working in an energy company based in Norway.

Agus Hasan is a professor in cyber-physical systems at the Department of ICT and Natural Sciences, Norwegian University of Science and Technology (NTNU)

The views expressed in this article are those of the authors.

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