How a Java-Sumatra interconnection could accelerate Indonesia’s decarbonisation

Summary

The Java-Sumatra interconnection could increase Indonesia’s renewable generation share to 48% by 2040, exceeding current targets while reducing system costs by 6.1%, according to Scenario Builder modelling results.

Transmission delivers climate benefits only when paired with fossil fuel phase-down, highlighting the role of operational policy alongside infrastructure investment.

Strong import demand into Java indicates that planners should pursue phased expansion of transmission capacity, positioning interconnection as a long-term decarbonisation enabler.

Indonesia’s fragmented grid limits renewables deployment

As the world’s largest archipelagic state, Indonesia faces unique challenges in planning and operating its power system. The country’s electricity network is divided into seven grid regions — each serving one of the main island groups — with limited interconnection beyond the Java-Bali link.

This fragmentation has constrained Indonesia’s ability to fully tap into its abundant renewable energy resources, including hydropower in Kalimantan and solar potential in Nusa Tenggara. Meanwhile, it has reinforced reliance on coal power in Java, the country’s primary demand centre.

As of 2024, renewable energy accounted for less than 12% of total power generation. Indonesia aims to increase this share to 41% by 2040, a significant step up that will require not only rapid renewable deployment but also expanded transmission infrastructure to connect resource-rich regions with load centres.

One proposed solution is an Indonesia 'Super Grid', a long-discussed vision to interconnect the country’s major island systems into a unified national network. This includes a planned Java–Sumatra interconnection, which could create a transmission corridor enabling renewable electricity exports from Sumatra to Java. Announcements from the energy ministry outline plans for a 112 km, 500 kV high-voltage alternating current (HVAC) transmission line. The line would have a transmission capacity of 3 GW in each direction and is planned to be operational by 2033.

But would it actually deliver clean electricity? And under what conditions? We used Scenario Builder to find out.

Model and scenario set-up

Assessing the project's economic and climate value requires an understanding of how the interconnection would change system costs and emissions compared with a business-as-usual pathway. Stakeholders also need clarity on the conditions under which the link would enable increased clean electricity trade, rather than simply opening a new pathway for fossil-based generation.

We modelled Indonesia as a 7-node system, allowing the Java and Sumatra grids to be analysed independently while enabling a comprehensive view of the national power system. The configuration was as follows:

Two scenarios were developed.

First, a Base Scenario that replicates the RE base scenario from the Electricity Supply Business Plan (RUPTL) 2025-2034, with demand and emissions beyond 2034 extrapolated from the National Electricity General Plan (RUKN) 2024–2060 national projections.

Secondly, a Transmission (Tx) Expansion Scenario which introduces a bidirectional transmission line between Java and Sumatra, assumed to become operational in 2035. To build this scenario, several constraints were implemented via the input parameters:

For full details on the input data used to recreate both scenarios, please refer to the documentation here.

Interconnection drives faster grid decarbonisation

The modelling results across the two scenarios highlight several key insights.

The Java-Sumatra link could boost Indonesia’s renewable energy share to 48% by 2040

Results from the Tx Expansion Scenario indicate that activating the Java-Sumatra transmission link could enable Indonesia to exceed its 2040 renewable energy target, with renewable generation reaching 48% total electricity supply. More than half of this generation would come from solar power.

Importantly, this expansion is not only cleaner but also economically advantageous: between 2035-2050, the interconnection lowers total system costs by 6.1% and cumulative emissions by 8.5% relative to the Base Scenario.

By comparison, renewable penetration reaches only 34% under the Base Scenario, with solar contributing 12% of total generation.

The stronger role of solar in the Tx Expansion Scenario is driven by accelerated deployment in Sumatra, where installed solar capacity expands to 24 GW by 2040, compared with just 5 GW in the Base Scenario. Much of this additional capacity is developed to supply exports to Java.

From 2038 onwards, as Java’s local solar deployment approaches the assumed technical potential of 57 GW, imports from Sumatra meet approximately 4-8% of Java’s electricity demand, enabling further reductions in coal generation and supporting system-wide decarbonisation.

Clean transmission requires parallel fossil fuel phase-down

Establishing a transmission link between the two systems does not automatically result in renewable electricity trade. This is a critical nuance that the modelling makes visible.

Sumatra is expected to host around 14 GW of coal capacity by 2035, much of which remains underutilised. By 2035, the supercritical coal fleet — which dominates coal generation in the region — operates at an average annual capacity factor of just 50%. If these plants were forced to run under Indonesia’s typical baseload levels of around 80%, exports to Java would likely be dominated by fossil-based electricity rather than new renewable capacity.

To avoid this outcome, utilisation limits were imposed in the Tx Expansion Scenario, including a 50% maximum utilisation rate for the supercritical coal fleet and a 60% limit for combined-cycle gas generators. Under these constraints, the model dispatches thermal generators up to their allowed limits while expanding solar generation to meet additional export demand from Java.

The takeaway is clear: transmission expansion alone is insufficient to guarantee a green power corridor. Complementary policies — including utilisation caps and a credible phase-down of fossil fuel generation — are essential guardrails.

The Sumatra-Java transmission capacity should be gradually expanded

The modelling also reveals an asymmetric utilisation pattern across the two transmission directions — one that points to where the value lies.

Flows from Java to Sumatra remain at the minimum required level of 1.75 TWh per year, equivalent to 10% utilisation of the 2 GW transmission capacity. This suggests that Java’s role in this corridor is primarily one of reliability and optionality, rather than sustained export.

By contrast, electricity flows in the Sumatra to Java direction remain consistently high throughout the modelling period. The model also decides to expand transmission capacity to 4 GW in 2040, and the interconnector still reaches full utilisation in several subsequent years. This points to strong structural demand for imports into Java, and suggests potential economic value in further expanding the transmission capacity beyond the modelled limit.

Building on the analysis: testing policy and investment choices

Scenarios such as the one presented above enable stakeholders to understand the system-wide implications of a specific grid project, and the conditions under which proposals can deliver positive climate outcomes.

For project developers and financiers in particular, the results provide a basis for assessing the interconnection against climate-aligned benchmarks, including principles developed by the Green Grids Initiative. The modelling quantifies expected emissions trajectories, system costs, and transmission flows within a consistent analytical framework — the kind of transparency that green financing standards increasingly require.

Build your own scenario

The conditions modelled here represent one plausible pathway. Alternative assumptions around transmission timing, renewable cost trajectories, or accelerated coal retirement schedules could shift the results significantly.

Access Scenario Builder today and test those alternative pathways yourself.

Written by Thu Vu, Senior Insights Analyst - Southeast Asia.

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