Indonesia can tap its potential in renewable energy to fulfill the country's commitment to the Paris climate accord and reduce its dependence on coal-based power, according to analysts.

Southeast Asia's biggest economy aims to slash emissions by 29 percent by 2030. State-owned utility Perusahaan Listrik Negara said in May that it will stop building coal-fired power plants after 2023 to meet Indonesia's carbon-neutrality goals.

Sisilia Nurmala Dewi, Indonesia team leader of international environmental organization 350.org, welcomed the company's move on coal but called it "insufficient" to meet Indonesia's climate goals.

Between now and 2023, construction is expected on more new thermal plants, likely locking in more carbon emissions for decades to come, Dewi said.

Fabby Tumiwa, executive director of the Institute for Essential Services Reform think tank in Jakarta, said it will be difficult for Indonesia to reduce dependence on cheap coal.

Indonesia is among the world's biggest coal producers and exporters. It produced 550 million tons of coal in 2020, over 70 percent of which were exported. Coal accounts for roughly 60 percent of electricity generation in Indonesia.

"We have too much coal in the (power) system, so it's not very easy to escape from this track," Tumiwa said.

But Tumiwa is optimistic that Indonesia can be weaned away from coal by investing in renewables. He estimates that if Indonesia builds an additional 10 gigawatts of renewable energy capacity each year until 2030, the country could achieve net-zero emissions by 2050.

Carbon trading system

Rida Mulyana, director-general of electricity at Indonesia's Ministry of Energy and Mineral Resources, told a parliamentary hearing on May 27 that Indonesia plans to offer renewable energy incentives, impose carbon taxes and develop a trading system.

Renewable energy accounted for 12.2 percent of total electricity generation between 2015 and 2019. Indonesia installed 10,491 GW of renewable capacity in 2020, a mere 88 MW increase over 2019.

"Indonesia has a rich renewable energy potential," said Dewi. With abundant solar energy resources, the country can create a more climate-friendly energy infrastructure."

"The combination of increasingly competitive solar photovoltaic, batteries, low-cost electrolyzers, and huge solar potential throughout the archipelago will make solar PV (photovoltaic) the primary source of electricity generation in Indonesia by 2050," the Ministry of Energy and Mineral Resources said.

As a signatory to the 2015 Paris Agreement, Indonesia has pledged to cut carbon emissions to keep the global temperature rise below 2 C.