Liga Asuransi – The energy transition is no longer just an option, but an urgent necessity for Indonesia. The global climate crisis demands that all countries, including Indonesia, reduce their dependence on fossil fuels, which contribute to high carbon emissions. One solution currently in the spotlight is the Wind Power Plant (PLTB) or wind energy.
The Indonesian government is targeting an additional 5 gigawatts (GW) of wind power by 2030 This figure is not just an ambition, but part of a strategy towards net-zero emissions by 2060. However, this ambition is accompanied by major challenges: limited infrastructure, expensive technology, and complex project risks.
This is where renewable energy insurance plays a key role. Insurance is not merely a supplement, but a crucial foundation for ensuring that wind power projects proceed as planned and that significant investments are not lost due to unforeseen risks. This article will discuss global and national wind power trends, business opportunities, the various risks involved, and the critical role of L&G Insurance Broker in supporting Indonesia’s energy transition.
Global Wind Energy Trends
Global Growth
The global wind energy industry is breaking records. By 2024, global wind capacity is expected to increase by 117 GW, pushing the total capacity to 1,136 GW. China leads the way with nearly 80 GW, followed by the United States, Germany, India, and Brazil.
Another growing trend is offshore wind power. By 2025, an additional 19 GW of offshore wind power capacity is projected, with investments reaching USD 80 billion. Offshore wind is gaining popularity due to the more consistent wind stability at sea compared to land.
Trends in Indonesia
Indonesia actually has enormous wind potential, amounting to 154.6 GW (60.4 GW onshore and 94.2 GW offshore). However, as of 2024, installed capacity is only around 152.3 MW—less than 1% of the potential.
To catch up, the Ministry of Energy and Mineral Resources is targeting an additional 5 GW of wind power plants by 2030. Some of the projects currently being developed include:
- Tanah Laut Wind Power Plant (70 MW)in South Kalimantan.
- Timor Wind Power Plant (22 MW)in NTT.
- Another wind power plant project is ready to operate in the 2025–2027 period.
This ambitious target can only be achieved with full support from the investment sector, technology, and of course risk protection through insurance.
Wind Power Trends in Indonesia
Huge Potential, Still Low Utilization
Indonesia has a wind energy potential of 154.6 GW—60.4 GW onshore and 94.2 GW offshore. The regions with the greatest potential include:
- South Sulawesi(the Sidrap 75 MW PLTB and the Jeneponto 72 MW PLTB are already operating).
- NTT(The 22 MW Timor PLTB is under development).
- South Kalimantan(70 MW Tanah Laut Wind Power Plant).
- East Java & Central Java for medium scale projects.
However, by 2024, the installed capacity of wind power plants in Indonesia will only be around 152.3 MW — less than 1% of the existing potential.
Target of 5 GW by 2030
To achieve the 5 GW wind power plant target, the government, through the 2025–2035 RUPTL (Regional Development Plan for Power Generation), has opened up significant investment opportunities. New projects are targeted to be operational between 2025 and 2030. If achieved, wind power plants will become one of the backbones of Indonesia’s renewable energy sector.
Major Challenges in Indonesia
- Expensive technology & import dependence: large turbines still have to be imported from abroad.
- Transmission infrastructure limitations: windy locations are often far from electricity consumption centers.
- Tropical climate: unstable wind patterns make the efficiency of wind turbines lower than in subtropical countries.
- Investment risk: The certainty of electricity buying and selling regulations and tariffs is still a matter of debate between developers and PLN.
Risks in Wind Power Projects
PLTB investments require significant capital, ranging from hundreds of billions to trillions of rupiah per project. With such substantial capital, risks must be managed carefully. Here are the main risks to anticipate:
- Construction & Engineering Risks
- Construction delays due to extreme weather or logistical obstacles.
- Equipment damage during installation, such as a falling turbine or a failed foundation.
- A design failure that could potentially delay the project by months.
- Weather & Environmental Risks
- Although wind is a source of energy, extreme winds or storms can damage turbines.
- Lightning often strikes open areas, causing expensive damage.
- Floods & landslides at project sites could halt operations.
- Logistics Risk
- Turbine components can reach tens of meters in length.
- Land transportation faces the challenge of narrow roads or limited bridges.
- Maritime transport is at high risk from storms and large waves.
- Financial & Legal Risks
- Failure of the contractor to complete the work.
- Default in the power purchase contract (PPA) with PLN.
- Legal disputes with surrounding communities regarding social or environmental impacts.
- Operational Risk
- Machine damage after the PLTB is operational, for example the turbine gearbox.
- Technician work accident during maintenance at height.
- Third party claims, such as damage to residents’ property or the impact of turbine noise.
The Role of Insurance in Supporting PLTB
Without insurance, the risks mentioned above could lead to project failure and significant losses for investors. The key roles of insurance in wind power plants are as follows:
Protects the project from losses due to accidents, equipment damage, or natural disasters during the construction phase.
Covers damage to the main assets of the wind power plant after operation, including turbines, power grids, and control centers.
Protection for shipping large components from overseas to the project site. Reduces the risk of loss due to maritime accidents or damage in transit.
Covers losses due to third party claims, such as work accidents, property damage, or environmental impacts.
Guarantees the contractor will complete the work as agreed. If the contractor fails, the surety bond will cover the project owner’s losses.
- Renewable Energy Insurance Package
Several international insurance companies have developed special packages for renewable energy, covering a combination of all the above risks.
Global Case Study
- PLTB Hornsea (UK, Offshore 1,2 GW)
○ This multi-billion dollar project uses comprehensive insurance, including marine cargo and offshore construction insurance.
○ Without insurance, storm repair costs could cost hundreds of millions of dollars.
- Sidrap Wind Power Plant (Indonesia, 75 MW)
○ One of the largest wind power plants in Indonesia that requires insurance protection from the construction stage.
○ The main challenges are logistics and potential damage from tropical weather.
L&G Insurance Broker: Energy Transition Partner
As an experienced insurance broker, L&G understands the unique challenges of energy projects, including renewable energy. L&G offers the following advantages:
- Extensive experience in handling large-scale infrastructure and energy projects.
- Global network with leading insurance companies.
- Tailor-made solutions tailored to the specific needs of wind power projects.
- Comprehensive risk assistance, from risk analysis, policy selection, to claims.
With L&G’s support, energy companies and investors can focus on development, while risk protection is professionally managed.
Conclusion
Indonesia’s energy transition through the construction of 5 GW of wind power plants by 2030 presents both a significant opportunity and a challenge. Indonesia’s abundant wind potential must be optimized to ensure it stays abreast of global renewable energy trends. However, the complex risks make insurance a crucial factor.
PLTB project insurance is not just a formality, but the key to ensuring that investments run smoothly, assets are protected, and projects achieve their targets.
As a trusted insurance broker, L&G Insurance Broker is ready to support the success of renewable energy projects in Indonesia. With the right protection, the energy transition is not just a dream, but a reality that benefits the nation and the environment.
Want to ensure your renewable energy project is protected from various risks?
Get in touch L&G Insurance Broker right now at 08118507773 for the best insurance consultation and solutions for your wind power and energy infrastructure projects.
