The Energy Challenge Indonesia is known as the biggest energy consumer and producer in South East Asia.

Indonesia also has massive clean energy sources potential, but bizarrely it still Uses and subsidises non renewable sources as the main countrys energy source. This obviously shows that Indonesia has a backward trend in developing renewable energy. As the transport and industrial sector develop, the countrys energy demand also rises 7 per cent per year (Green policy paper released by finance ministry). At the same time almost one third of Indonesian does not have access to the electricity especially for those who live countryside. More than 80 percent of Indonesias power plant is using non renewable sources such mainly oil, and less than 20 percent using renewable energy to generate electricity. Instead build new renewable energy power plant, Indonesia current program is to build 10.000 MW coal power plants to cope the electricity shortage, meaning that Indonesia has a lack commitment in preventing climate change. While, at the present Indonesia has a range of prospective renewable energy resources, for example geothermal, it can cover about 40% of the demand but in reality we only use 3,4% from the total of prospective reserves. Actually there are two obstacles in applying renewable energy in

Indonesia: first it requires a vast investment, and second come from the government itself. Indonesia government has complicated bureaucracy, lack of human resources, and decentralisation that lead to separation power between central and local government. Most of local government have very limited knowledge about energy circumstances. Furthermore there is no framework that encourages local government to trail renewable energy programme. Electricity and fuel subsidises is responsible for negative economic implication. Most of high class economic level gets the subsidy and this lead to energy overconsumption because costumer doesnt charge the real price of the energy. By removing the subsidy and adjusting the fuel and electricity cost will gain positive impact, such as promote better energy efficiency, and encourage renewable energy development as the sustainable energy growth path. However removing the fuel subsides and implementing renewable energy never been an easy task it required serious good governance reform, huge investment and strong leadership and clear guidance from the top.