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When heavy storms triggered a fault on a major power line in Indonesia’s Sumatra in late May, blackouts plunged homes and businesses across the island into darkness, leaving millions to cope without power in the humid heat for up to a day.

Failed traffic lights caused chaos on the streets of Medan, one of the country’s biggest cities, and restaurants and shops had to shutter or throw out food after fridges stopped working. Four people were reported to have died from carbon monoxide poisoning from generators.

A power outage caused by damage to cables on a high-voltage transmission line, the first of two to strike Sumatra in a fortnight, highlighted the huge challenge facing Indonesia and much of neighbouring Southeast Asia – the maintenance and upgrading of inadequate grid capacity that industry analysts say is proving an obstacle for billions of dollars in planned clean power investments.

Experts told Climate Home News the Galang–Simangkuk transmission line, which was relatively new and only began operating seven years ago, should have been able to withstand the storms that caused transmission towers to collapse in early June.

“It should not have had these grid failures,” said Wai-Shin Chan, Hong Kong-based head of research at Asia Research & Engagement, a consulting firm, warning that climate change would bring more frequent episodes of extreme weather.

“The grid resilience is really not there,” Chan said.

The Indonesian Air Force helped state-owned utility PT Perusahaan Listrik Negara (PLN) transport emergency power towers to restore electricity supplies within 24 hours, but the two incidents could cause longer-lasting damage to investor confidence – hurting the delivery of much-needed reliable clean electricity supplies.

PLN did not respond to a request for comment.

    Grid bottlenecks and projects stuck on hold

    With electrification high on the agenda of the COP31 climate talks later this year, there is growing global focus on the need to bolster grid infrastructure to cope with increased electricity use and more renewables in the power mix.

    In Southeast Asia, energy experts say inadequate grid capacity and maintenance is already proving a major factor in the region’s stuttering rollout of new clean energy projects.

    About 50% to 60% of renewable energy projects in Vietnam, Thailand and Indonesia were cancelled or stalled between 2021 and 2025, according to a recent report by consultancy Bain & Company and Standard Chartered. In Indonesia, 48% of announced projects were subsequently dropped or delayed during that period.

    Progress in the region is also being hampered by issues ranging from unclear power purchase agreement (PPA) structures, a failure of power policies to keep up with investor needs, permitting and licensing approval delays, grid connection constraints, limits to private sector involvement in electricity markets, and policy and tariff uncertainty, energy experts said.

    Some renewable energy projects have also faced opposition due to their environmental impact and issues related to land rights.

    But Bain researchers found grid infrastructure was the biggest bottleneck for Southeast Asia’s energy transition, with about $18 billion per year needed in investment for modernisation and upgrades.

    The International Energy Agency (IEA) has warned that electricity grid and storage investment in the region was higher in 2015 at $15 billion compared with $12 billion in 2025, even as electricity demand and renewable energy growth accelerated.

    “It’s a concern for long-term power development in the region,” Chan said.

    “If these risks – grid curtailment, policy uncertainty, permitting and PPA – are not adequately addressed, investors just don’t have the confidence to hit the final investment decision button,” he added.

    A stuttering energy transition

    Ramping up progress on solar, wind, hydro and geothermal projects is vital for Southeast Asian nations to hit their targets on cutting planet-heating carbon emissions.

    Indonesia has pledged to reduce emissions by 31.9% by 2030 compared with business-as-usual levels, or by 43.2% with international support, on the way to reaching net zero by 2060.

    Renewables accounted for about 18% of Indonesia’s energy mix in April 2026 according to local media reports, falling short of the country’s initial 23% target for 2025, with the majority of its energy needs met by coal, oil and gas. In 2025, a new National Energy Policy postponed achieving the target to 2030.

    “The region carries significant weight in global terms, given its share of world population and energy consumption,” said Joseph Jacobelli, an impact investor and author of Asia’s Energy Revolution and Powering the Unstoppable Green Shift.

    “Every delay in renewable energy deployment extends dependence on fossil fuels and pushes net zero targets further out of reach,” he said.

    A technician in a green shirt walks next to solar panels that partially provide electrical power to the Grand Mosque of Istiqlal, in Jakarta, Indonesia
    A technician walks next to solar panels that partially provide electrical power to the Grand Mosque of Istiqlal, in Jakarta, Indonesia (Photo: REUTERS/Willy Kurniawan)

    There are cost benefits of increasing renewables in the overall power mix, too.

    In many parts of the region, new renewable power – especially solar and onshore wind – is cheaper than building new fossil fuel generation. The global energy shock unleashed by the Iran war has highlighted the energy security benefits of renewables, though it also raised concerns about coal backsliding in countries including Indonesia.

    Surging oil prices exposed Southeast Asia’s vulnerability to fossil fuel supply disruptions, causing energy prices to soar and widespread fuel shortages that led the World Bank to downgrade the region’s growth projection.

    “This situation pushes us to accelerate [the energy transition], we must move faster,” Indonesian President Prabowo Subianto said in March, adding that the government was focused on solar projects that would deliver a total installed capacity of up to 100 GW.

    At the same time, progress on moving away from coal has been sluggish. Both Indonesia and Vietnam signed up for Just Energy Transition Partnerships (JETPs) – a funding initiative set up by the G7 to help developing nations shift away from coal – though a lack of favourable financing is holding back these plans.

    The US withdrew from its JETP deals with the two countries last year, reflecting President Donald Trump’s wider energy policies, and Indonesia abandoned plans to close a major coal power plant.

    Lack of finance, or lack of faith?

    But a shortage of financing to bring new renewables projects online is not the cause of foot-dragging in Indonesia, where installed solar capacity reached only about 20% to 30% of the government’s 2020-2025 target, Bain researchers said.

    Of an estimated $540 billion in green capital expenditure announced across Southeast Asia’s power and electric vehicle value chains between now and 2030, only about $315 billion is on a credible path towards deployment under current conditions, according to the report.

    Between 2022 and early 2026, more than a quarter of the 452 new solar projects announced in Southeast Asian countries were postponed or cancelled, according to Global Energy Monitor‘s Global Solar Power Tracker.

    In Indonesia, the Batam Bintan Karimun solar farm was initially expected to come online by 2024 but was cancelled in 2023 for unknown reasons, Kasandra O’Malia, a project manager at Global Energy Monitor, told Climate Home. The project also included plans for Southeast Asia’s largest associated battery storage facility.

    Another high-profile Indonesian development that has stalled is a 3,500 MW solar and storage project proposed on Riau Island to export clean electricity to Singapore. While not formally abandoned, there have been few updates to this project since April 2022.

    “This execution gap is not really to do with money – there is available capital – but the finance is not being deployed effectively because the risks have not been adequately redressed,” Chan said.

    In a bid to foster investor certainty, Indonesia’s government approved a new 2025-2034 Electricity Supply Business Plan (RUPTL) for PLN in May 2025, replacing years of delays over the country’s power development roadmap.

    As well as aligning government policy, streamlining permitting, simplifying purchase procedures and targeting 70 GW of new generation, with renewables accounting for the vast majority of additions, the plan includes the construction of about 47,800 kilometres of new transmission lines and substations with a total capacity of 108,000 megavolt-ampere, spread across Indonesia.

    The Ministry of Energy and Mineral Resources, several domestic and international renewable energy developers, and the Indonesia Renewable Society, did not respond to requests for comment.

    Another way to soothe investors’ nerves would be for governments to use public money to de-risk investments, but there is little appetite for this approach in the region, Chan said.

    A more effective tool would be ensuring stable, investment-friendly energy market policies and regulations, said Alnie Demoral, a Manila-based energy analyst at climate think-tank Ember who previously worked with solar developers and investors.

    Renewable energy developers, investors and authorities can spend years negotiating the project’s costs, permitting and whether grid connection will be available to bring clean power online, she said.

    Often the longest discussions focus on the power pricing tariffs that governments set for renewable energy producers. Changing policies or disagreement on underlying cost assumptions can stall or delay a project before it reaches financial close, she added.

    “Governments have to do their part by making sure the investment environment is stable,” Demoral said.

    “But this is a two-way process. The private sector and developers must also ensure that their assessments of the project are based on robust assumptions.”

    AI data centres add to the strain

    At the same time, rapid growth in power-hungry AI data centres is putting extra strain on the region’s overstretched grids.

    AI data centres, which use much more power than regular data centres, are becoming one of the largest drivers of new power demand in Southeast Asia as governments in the region jostle for more multibillion-dollar investment in the sector.

      The slow pace of renewable energy deployment and grid modernisation, coupled with ongoing reliance on fossil fuels in the electricity mix, will make it difficult for the region to meet a new, fast-growing source of additional demand without increasing emissions.

      Emissions from data centre power use in Indonesia are expected to quadruple between 2024 and 2030, according to Ember.

      AI data centres operate around the clock and will often use any power that is available – be it renewables or fossil fuels, said Chan, urging policymakers to first ensure they can meet the power needs before courting data centres.

      Many new AI data centres are planned for areas with insufficient high-voltage transmission capacity, according to the Bain report, suggesting that countries should focus on new high-voltage lines, larger substations and stronger interconnections between regions.

      The researchers note that AI data centres also typically take about one to three years to build, while major electricity transmission lines and grid updates can take five years or more, adding that power grid investments must happen before renewable energy or AI projects.

      “Growth in data centres and AI is already adding pressure to constrained grids,” said Christina Ng, the Kuala Lumpur-based co-founder of Energy Shift Institute, an Asia-focused, independent energy finance think-tank.

      “The risk is that new demand is met through high-emitting electricity if clean power and clean grid investment do not keep pace.”


      Main image: A technician walks next to solar panels that partially provide electrical power to the Grand Mosque of Istiqlal in Jakarta, Indonesia (Photo: REUTERS/Willy Kurniawan)

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      New Zealand moves to protect business with law curtailing climate litigation

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      New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.

      The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.

      Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.

      “Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.

      Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.

        Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.

        Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.

        In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.

        Corporate lobbying in the shadows

        Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.

        “That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”

        The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.

        The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.

        Green groups fail to stop bill

        The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.

        But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.

        A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.

        “Pathetic”: New Zealand plans to barely cut emissions between 2030 and 2035

        Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.

        But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.

        The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.

        Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”

        Copycat legislation on the rise

        New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.

        In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.

        The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.

        UN General Assembly backs “climate obligations” set by world’s top court

        Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.

        “Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.

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        Indonesia’s nickel production cuts are not enough to create a sustainable industry 

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        Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS. 

        Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.

        Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.

        The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.

        The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.

        Restricting Indonesia’s nickel output

        Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.

        Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.

          Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.

          Stronger environmental enforcement

          Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.

          This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.

          The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.

          A coastal village is wedged between the sea and a large nickel mine in Indonesia
          The fishing villages of Tapunggaya in Sulawesi, Indonesia, are squeezed between the sea and an expanding nickel mine (Photo by Garry Lotulung/NurPhoto)

          The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.

          In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.

          None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.

          Unequal benefits

          For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.

          Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.

            In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.

            Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.

            The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.

            None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.

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            Risk of “catastrophic” oil spill reaching Kimberley coast found in Woodside’s Scott Reef gas drilling plans

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            SYDNEY, Monday 24 August 2026 – New analysis of Woodside modelling released by Greenpeace Australia Pacific and Environs Kimberley has revealed the oil and gas corporation’s plans to drill at Scott Reef could cause an oil spill up to 30 times bigger than the 2009 Montara disaster, impacting the Kimberley coastline and reaching as far as Indonesia.

            The new analysis details the “catastrophic” oil spill risk put to environmental regulators for approval by Woodside in its Browse to North West Shelf Project (Browse) plans, the worst-case scenario being a blowout directly below Scott Reef, polluting whale migratory pathways and covering isolated turtle nesting ground with oil condensate.

            An FOI application (F348) revealed the federal environment department (DCCEEW) asked offshore oil and gas regulator NOPSEMA to look into the oil spill risk in 2025. NOPSEMA’s response to the application refused access to its report, and one document shows DCCEEW sought further advice this year.

            Greenpeace and Environs Kimberley are calling on the Federal Government to publicly release the NOPSEMA report given the risk of an uncontrolled release of oil condensate from directly below Scott Reef.

            Hannah Schuch, Senior Campaigner at Greenpeace Australia Pacific, said: “Woodside is aware that drilling at Scott Reef risks a massive oil spill that would have severe, far-reaching consequences. It appears environmental regulators are aware too.

            “The state and federal governments need to take this risk from Woodside’s drilling plans seriously, as they could end up allowing the worst oil spill in Australian history.

            “The pygmy blue whales that migrate up and down the WA coast with their newborns each year could be swimming and feeding in toxic, oil-slicked water. Woodside’s proposal to drill at Scott Reef is an environmental disaster waiting to happen, and the WA and federal governments have one surefire way to prevent catastrophe — reject Browse.”

            Martin Prichard, Executive Director at Environs Kimberley, said: “A catastrophic oil spill by Woodside would be disastrous not just for marine life in the area but also for the Kimberley’s $500 million tourism industry.

            “The state and federal governments will see five marine parks on the Kimberley coast included in the risk area of a catastrophic Woodside oil spill.

            “The Montara oil spill was disastrous for West Timor with the toxic oil destroying seaweed farmers’ livelihoods. The Kimberley dodged a bullet with Montara, we were lucky the spill didn’t head our way. Myself and a crew flew over the Montara oil spill and followed it as far as we could. It was like a scene from a disaster movie.”

            After the WA Environmental Protection Authority deemed Browse “unacceptable” due, in part, to oil spill risk, Woodside submitted a mitigation plan based on technology that has never been used “in anger”, a weakness stated in an independent expert review of the plan.

            Professor Richard Steiner, independent oil spill expert, said: “A large offshore spill is impossible to effectively contain or recover. Historically, only 2-6% of total spill volume is recovered and the ecological injury from the release of toxic hydrocarbons in the sea can be severe, extensive, and long-term.

            “Here in Alaska, government research concludes that several marine populations injured by the 1989 Exxon Valdez oil spill, including whales, fish, and seabirds, are still not recovering today, 37 years later. We should expect similar long-term ecological impacts in Western Australia if there were to be a major oil spill. The only sure way to avoid the risk of a catastrophic marine oil spill is to not develop oil and gas projects in marine environments.”

            -ENDS-

            Media contact

            Emma Sangalli on emma.sangalli@greenpeace.org or 0431 513 465

            Risk of “catastrophic” oil spill reaching Kimberley coast found in Woodside’s Scott Reef gas drilling plans

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