Liga Asuransi – In recent years, the renewable energy movement in Indonesia has grown stronger. After solar panels and solar power plants (PLTS) stole the public’s attention, now it is the turn of Wind Power Plants (PLTB) to be considered as the key to the energy transition towards Net Zero Emission (NZE) 2060. Indonesia actually has huge wind potential, especially in eastern regions such as South Sulawesi, East Nusa Tenggara (NTT), the southern coast of Java, to Maluku and Papua, with average wind speeds in some areas reaching more than 6 m/s—enough to drive commercial-scale turbines.
However, the question now is: is this movement truly underway, or is it still just empty talk and empty promises of project plans? Although the government has inaugurated several pilot projects, such as the Sidrap (75 MW) and Jeneponto (72 MW) wind power plants, the implementation of new projects remains slow. Indonesia desperately needs additional clean energy capacity to achieve its energy transition targets and reduce its dependence on coal.
Many factors come into play: from technical and geographical challenges, regulatory certainty, financing schemes, to the readiness of transmission infrastructure. This is where careful planning and risk management play a significant role. A wind turbine project involves more than just turbine and network construction; it also involves financial protection against the risks of extreme weather, construction damage, and third-party liability.
As a strategic partner in the energy sector, L&G Insurance Broker is ready to support developers, EPCs, and investors with comprehensive renewable energy project insurance solutions—from Construction All Risks, Erection All Risks, to Liability and Business Interruption.
It’s time to not only plan wind power projects, but also ensure proper protection from the start.
The Reality and Journey of the Indonesian Wind Power Project
Despite Indonesia’s significant wind energy potential, the implementation of wind power projects is still in its early stages compared to other ASEAN countries. By 2025, the national installed wind power capacity will only reach around 150 MW, the majority of which will come from two main projects: the Sidrap Wind Power Plant (75 MW) and the Jeneponto Wind Power Plant (72 MW), both located in South Sulawesi.
The Sidrap project, inaugurated in 2018 as Indonesia’s first commercial wind farm, marked a significant milestone in the national energy transition. The giant 80-meter-tall turbines spinning in the Sidrap hills became a new icon, even attracting local tourists curious to see the wind farm in action. However, after the success of Sidrap and Jeneponto, further large-scale wind farm development has been slow.
Several highly touted projects, such as the Tanah Laut wind power plant in South Kalimantan and the Sukabumi wind power plant in West Java, have yet to reach full construction. Several factors contribute to this:
- Regulatory uncertainty, especially regarding electricity selling prices (feed-in tariffs) and purchasing schemes by PLN.
- Wind conditions vary and have not been fully mapped in detail in potential areas.
- Limited transmission infrastructure makes it difficult to distribute power from remote wind power plant locations to load centers.
- The financing scheme is conservative, as investors still consider wind projects in Indonesia to be high risk.
Furthermore, social and licensing factors also play a role. Several projects are delayed due to land acquisition, environmental permitting, or community resistance due to a lack of understanding of the benefits of wind power plants. This situation has led many developers and EPCs to adopt a “wait-and-see” approach, awaiting policy certainty and stronger government support.
However, while the pace hasn’t been as rapid as solar power plants (PLTS), the trend toward wind power development remains positive. The government, through the 2021–2030 PLN (State Electricity Company) RUPTL (Regional Electricity Company) has set a target of adding approximately 597 MW of wind power capacity by 2030. This means investment opportunities will expand in the coming years—especially for developers able to capitalize on the wind potential in eastern Indonesia and coastal areas.
The Great Potential of Nusantara Wind and Areas Ready for Development
Indonesia’s unique geography strongly supports the development of wind power plants (PLTB). Situated between two continents and two oceans, wind currents across Indonesia create stable seasonal patterns. Based on wind energy potential mapping conducted by the Ministry of Energy and Mineral Resources, several prime locations with average wind speeds of 6–8 meters per second are ideal for the development of utility-scale PLTB.
Here are some areas that stand out on the national wind potential map:
1. South Sulawesi – Pioneer and National Wind Center
This region has become a hub for Indonesian wind power development through the Sidrap and Jeneponto projects. Strong and consistent wind conditions make South Sulawesi a benchmark for successful wind projects in Indonesia. The government is even targeting wind power capacity expansion in this area due to its favorable land potential and favorable wind patterns.
2. East Nusa Tenggara (NTT) – Wind Farm of the Future
The East Nusa Tenggara (NTT) region is known for its high wind speeds, particularly on Sumba Island, Kupang, and the surrounding areas. Feasibility studies indicate that this region is suitable for large-scale onshore wind power plants, and even has the potential to attract foreign investors. Access to transmission infrastructure is a challenge, but the potential for it to become a wind energy hub for eastern Indonesia is significant.
3. West Java and Banten – Potential Near Load Centers
The southern coastal areas of West Java and Banten also record wind speeds suitable for medium-scale wind power plants. This region’s advantage lies in its proximity to the Greater Jakarta (Jabodetabek) electricity load centers, resulting in more efficient power distribution costs. This opens up significant opportunities for private and state-owned enterprise developers to build wind power plants that directly support the main electricity system.
4. South Kalimantan and East Kalimantan – Strategic Project Candidates
The government has included several regions in Kalimantan in its national strategic wind power development plan. Wind speeds along the southern and eastern coasts of Kalimantan are quite consistent, and the development of the Indonesian capital city (IKN) requires a large supply of green energy. Wind power in these regions could be a crucial part of the green energy mix to support the IKN as a sustainable city.
5. Islands and Coastal Areas – Hybrid Energy Solutions
Several small islands and coastal areas in Indonesia also have the potential for small-scale wind power plants (PLTB) and hybrid solar power plants (PLTS). This combination model is well-suited for off-grid systems that can strengthen local energy security, especially in remote areas.
🌿 Important note: ESDM data shows that Indonesia’s total wind energy potential is estimated at 60.6 GW, but only 0.25% has been utilized. This figure represents enormous growth potential—both for large utility projects and hybrid community-based schemes.
With such significant potential, EPC developers and investors need to view the national wind map as a business opportunity, not just a technical discourse. These regions will become Indonesia’s future wind energy powerhouses if supported by appropriate regulations, investment, and risk protection.
The Role of Insurance in Supporting Wind Power Projects and Attracting Investors
Wind Power Plant (PLTB) development is not just about turbine technology and wind speed. These projects involve significant investment, long construction times, and…riskcomplex technical and environmental conditions. Therefore, insurance plays a strategic role in ensuring project continuity and investor confidence, both domestic and international.
1. Guaranteeing Investment Security
Wind turbines require significant initial capital investment—from land acquisition and turbine foundation construction to the procurement of high-value imported components like nacelles and rotors. Without comprehensive Construction All Risks (CAR) and Erection All Risks (EAR) plans, the risk of damage during transportation or installation can result in significant financial losses.
With insurance protection from the construction stage, investors and lenders (banks/financial institutions) will be more confident in funding the project, because there is a guarantee of financial recovery if an incident occurs.
2. Protect against Long-Term Operational Risks
Once a wind turbine plant is operational, it faces various risks: mechanical wear and tear, lightning strikes, grid disruptions, and even natural disasters such as extreme winds and tropical storms. Property All Risks and Machinery Breakdown policies are designed to provide comprehensive protection for the plant’s vital assets, including the transmission grid and control systems.
In addition, there is also Business Interruption Insurance, which covers revenue losses due to operational disruptions, so that project cash flow remains stable even if there is unexpected downtime.
3. Managing Environmental Risks and Third Party Liability
Wind power plants, especially those built in coastal areas or near residential areas, also face potential third-party claims. For example, these could involve land damage, changes to the local ecosystem, or accidents involving surrounding communities. Therefore, Third Party Liability (TPL) and Environmental Liability Insurance are crucial to protect developers from potential lawsuits or substantial compensation.
4. Improving Project Eligibility for Green Finance
Many international financing institutions require risk protection schemes as part of their Environmental, Social, and Governance (ESG) framework. With the right insurance protection, wind power projects become more bankable and have a greater chance of securing funding from global institutions such as the ADB, the World Bank, or green financing institutions.
5. Supporting Net Zero Commitments and the Energy Transition
The Indonesian government is targeting Net Zero Emissions by 2060 and an increase in the share of renewable energy to 23% by 2025. Insurance plays an enabler in achieving these targets by ensuring that strategic wind energy projects can run smoothly without unexpected financial obstacles.
With the right protection scheme, developers not only secure their projects but also help strengthen the foundation of the national energy transition.
Amid growing investor interest in renewable energy, wind power projects with comprehensive insurance schemes will have an advantage in the tender and funding process compared to projects without clear risk mitigation.
Conclusion and Recommendations 🌬️🏁
Indonesia’s wind energy potential can no longer be underestimated. With adequate wind speeds in areas such as South Sulawesi, East Nusa Tenggara, and the southern coast of Java, Indonesia has a significant opportunity to make wind power a key pillar of the national energy transition. However, this potential can only be realized with a sound financing and risk mitigation strategy.
One of the main challenges in developing wind power plants is the high technical, environmental, and financial risks, particularly due to the large initial investment and technology still focused overseas. This is where insurance plays a crucial role—not only as a financial cushion in the event of an incident, but also as a determining factor in project viability in the eyes of investors and international funding institutions.
For renewable energy developers, EPC contractors, and project owners, having a comprehensive insurance protection package—from construction and turbine transportation to commissioning to long-term operation—will provide a much stronger position in facing risks, winning tenders, and attracting green investment.
Furthermore, it’s crucial for industry players to collaborate with experienced insurance brokers who understand the unique characteristics of wind energy projects in Indonesia. Brokers not only act as bridges with insurance companies but also act as risk consultants, helping design the best protection programs tailored to project needs and international standards.
Recommendation:
- Regional and central governments need to expedite the development of wind turbine (PLTB) roadmaps so that potential areas can be developed quickly with clear regulatory support.
- Developers and investors are required to integrate insurance from the project planning stage, not after the risk arises.
- Collaboration between industry players, financial institutions, and the insurance sector needs to be strengthened so that wind power projects can develop massively and sustainably.
L&G Insurance BrokerWe are ready to be your trusted partner in protecting your strategic projects. With extensive experience in the renewable energy, construction, and power plant sectors, we provide comprehensive insurance solutions ranging from Construction All Risks, Marine Cargo, to Business Interruption and Liability.
📞 Contact us at 08118507773 for free risk consultation and get the best protection solution for your project.
