Lakey Peak, a small surfing village on the island of Sumbawa in West Nusa Tenggara, is the kind of place that Indonesia's energy planning has historically struggled to reach. Located hours from the nearest major urban center, the village illustrates a problem that extends far beyond its shores: unequal access to reliable, affordable, and clean energy.

Despite its growing popularity as a tourist destination, Lakey Peak continues to experience power outages, unreliable internet connections, and limited access to air conditioning in the tropical heat. These problems are evident even in commercial hotels catering to visitors, raising a more fundamental question about the conditions faced by surrounding local communities.

The contrast with major cities such as Jakarta is striking. While urban residents generally take reliable electricity, internet connectivity, and modern conveniences for granted, many communities outside Indonesia's major population centers continue to struggle with basic energy infrastructure.

The challenge is not simply about producing more electricity. It is about ensuring that electricity can reach the communities that need it most.

It Is Not Just a Production Problem
At first glance, Indonesia's uneven access to electricity might appear to be a problem of insufficient generation capacity. Yet the country possesses enormous energy resources, including substantial fossil fuel reserves and vast renewable energy potential.

Indonesia's estimated renewable energy potential -- including solar energy -- reaches approximately 3,687 gigawatts (GW). This figure suggests that the country has more than enough natural resources to support a large-scale transition toward cleaner electricity.

However, having the resources to generate electricity is not the same as having the infrastructure to deliver it.

One of the biggest obstacles to renewable energy development is the lack of adequate transmission and distribution infrastructure connecting potential generation sites with electricity consumers.

Consider the possibility of developing a large solar installation on Sumba, another island in West Nusa Tenggara's neighboring province of East Nusa Tenggara. Without sufficient local demand, storage capacity, or transmission connections to larger markets, much of the electricity generated could become stranded.

The economic implications are straightforward. Investors have little incentive to finance capital-intensive renewable energy projects if the electricity cannot be reliably delivered to paying customers.

In this sense, Indonesia's renewable energy production gap cannot be separated from its infrastructure gap. Insufficient transmission networks and distribution systems can discourage investment in new generation capacity, leaving abundant renewable resources untapped.

The central question, therefore, is not merely how much clean electricity Indonesia can produce, but how effectively that electricity can be delivered to communities across the archipelago.

Why the Problem Is Less Visible in Major Cities
Indonesia's electricity infrastructure is heavily concentrated in its most economically developed regions.

The interconnected Java-Madura-Bali electricity system, commonly known as JAMALI, accounts for roughly 70% of national electricity demand. Under PLN's current electricity development plan, the system is also expected to receive approximately 48.2% of the country's planned additional generation capacity over the coming decade.

This concentration reflects economic and demographic realities. Java is home to a large share of Indonesia's population, industrial activity, and commercial electricity consumption.

For residents of Jakarta, Surabaya, or Bandung, the benefits of a relatively extensive and interconnected electricity network are apparent. Dense transmission and distribution infrastructure generally provides greater flexibility to manage demand and respond to local disruptions.

However, this experience does not reflect conditions throughout the country.

Outside Java and Bali, electricity infrastructure varies considerably. Some regions operate through smaller interconnected systems, while others depend on isolated local networks with limited generation capacity and fewer backup options.

The concentration of electricity demand in JAMALI can also obscure the difficulties faced by communities elsewhere. National indicators may suggest substantial progress in electrification even as significant disparities persist in service quality, reliability, and affordability.

These disparities become particularly apparent in remote islands and rural communities, where extending conventional electricity networks can be technically difficult and economically expensive.

The Challenge of an Archipelagic Nation
Indonesia's geography presents an extraordinary infrastructure challenge.

With more than 17,000 islands scattered across a vast maritime territory, the country cannot rely on the same electricity distribution strategy everywhere.

Connecting islands through submarine power cables is technically possible, but such projects can involve substantial construction and maintenance costs. Underwater cables also face risks associated with maritime activities, including fishing operations, shipping traffic, and damage to seabed infrastructure.

An alternative is to develop independent electricity systems that generate and distribute power locally without relying on connections to distant grids.

This approach is particularly relevant for eastern Indonesia, including Maluku, Papua, and Nusa Tenggara, where geographic isolation and relatively dispersed populations make conventional grid expansion more challenging.

Together, these regions are expected to account for a relatively small share of the additional generation capacity planned under PLN's current electricity development program.

This imbalance does not necessarily indicate that energy planners have overlooked eastern Indonesia. Rather, it reflects the difficult economics of delivering electricity across vast distances to communities with relatively low population densities.

Extending a transmission line through densely populated Java allows infrastructure costs to be shared among large numbers of households and businesses. Building comparable infrastructure to serve a small, isolated island can be far more expensive on a per-customer basis.

Consequently, the conventional grid expansion model that has supported electrification in Java may not always be the most practical or economical solution for Indonesia's remote islands.

The Hidden Costs of Electricity
Indonesia's electricity pricing system adds another dimension to the problem.

Government subsidies and compensation mechanisms help keep regulated electricity tariffs relatively affordable across different regions, even when the underlying cost of supplying power varies significantly.

A household in Sumbawa may therefore pay an electricity tariff comparable to that paid by a household in Jakarta, despite the potentially higher cost of generating and delivering electricity in a remote location.

From a social policy perspective, this arrangement serves an important purpose: protecting households from electricity prices that might otherwise be unaffordable.

However, relatively uniform consumer tariffs can also conceal substantial differences in the actual cost of supplying electricity.

Many remote and isolated communities have historically relied on diesel generators because extending transmission infrastructure to scattered settlements is economically impractical.

Diesel generation can be particularly expensive because fuel must be transported over long distances, sometimes by sea, while equipment maintenance and logistics create additional costs.

Estimates cited for remote diesel-based electricity systems range from approximately $0.29 to $0.65 per kilowatt-hour, compared with around $0.08 to $0.20 per kilowatt-hour for certain solar-plus-battery configurations.

Although actual costs depend on location, system design, financing, and operating conditions, these comparisons highlight the potential economic advantages of decentralized renewable energy.

PLN received substantial government subsidies and compensation payments in 2024, totaling approximately Rp 177.25 trillion ($9.9 billion), reflecting the broader financial burden of maintaining regulated electricity prices and supporting the national power system.

Such public spending is essential to ensuring electricity remains accessible. Nevertheless, subsidies alone cannot resolve the structural inefficiencies associated with supplying remote communities.

When subsidies absorb the difference between consumer tariffs and actual supply costs, the economic benefits of investing in more efficient local generation and storage systems may become less visible.

The challenge is therefore not to eliminate support for vulnerable electricity consumers, but to design policies that preserve affordability while encouraging investments capable of reducing long-term supply costs.

Why Microgrids Offer a Practical Solution
Indonesia's energy challenge is not simply a shortage of electricity. In many locations, it is a problem of geographic isolation, infrastructure limitations, and the inability to connect available energy resources with local demand.

This is where microgrids offer a promising alternative.

A microgrid is a localized electricity system that combines generation, distribution, and often energy storage. It can operate independently or, where infrastructure permits, connect to a larger electricity network.

For remote Indonesian communities, solar-powered microgrids supported by battery storage could provide a cleaner and potentially more economical alternative to diesel-based electricity generation.

Three advantages make this approach particularly relevant to Indonesia's geography.

First, microgrids address the archipelago's infrastructure challenge.

Instead of depending on expensive transmission connections between islands, communities can generate and consume electricity locally. Solar panels and battery storage can be installed close to households, businesses, schools, and other essential facilities, reducing dependence on distant generation centers.

Second, microgrids reduce dependence on imported fuel and complicated supply chains.

Diesel-powered electricity systems require regular fuel deliveries, exposing remote communities to transportation disruptions, fuel price fluctuations, and logistical challenges.

Solar-and-battery microgrids can reduce these vulnerabilities by relying primarily on locally available sunlight. Community participation or cooperative ownership arrangements could also strengthen local involvement in electricity management and maintenance.

Third, microgrids can make the economics of electricity supply more transparent.

By generating and distributing electricity locally, microgrids allow project developers and policymakers to assess the actual costs of serving a particular community.

This transparency can help identify economically viable investments in renewable generation, battery storage, and local distribution infrastructure.

However, microgrids are not an automatic solution to every electricity problem. Their effectiveness depends on appropriate system design, reliable maintenance, adequate financing, and sufficient storage or backup capacity to maintain supply during periods of low solar generation.

Successful deployment also requires clear regulations, sustainable business models, and technical support to ensure that systems remain operational over the long term.

Clean Energy Must Reach Everyone
For communities such as Lakey Peak, the solution to unreliable electricity does not necessarily involve waiting for Indonesia's largest interconnected grid to extend across more islands.

A properly designed microgrid could provide an independent and sustainable source of electricity, allowing local communities to generate, store, and manage power closer to where it is consumed.

Such systems should not be viewed merely as temporary substitutes for conventional electricity infrastructure. In many remote locations, decentralized renewable energy could become a permanent and economically viable component of Indonesia's electricity system.

The improving economics of solar power and battery storage further strengthen this possibility. Under suitable conditions, these technologies can offer lower long-term electricity costs than diesel generators while reducing greenhouse gas emissions and dependence on fossil fuels.

Yet technology alone will not close Indonesia's energy access gap. Achieving that goal will require policies that recognize the different infrastructure needs of densely populated urban centers and geographically isolated communities.

Indonesia's clean energy transition should therefore be measured not only by the amount of renewable electricity generated or the number of new power plants constructed, but also by improvements in reliability, affordability, and access across the country.

Communities such as Lakey Peak deserve the same opportunity to benefit from dependable electricity as residents of Jakarta and other major cities.

Ultimately, Indonesia's clean energy transition will remain incomplete if the benefits of cleaner, more reliable power fail to reach the communities that need them most.

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Barron Riady is a senior student at Harvard-Westlake Middle School in Los Angeles, California. The views expressed in this article are those of the author.

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