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December 2025 • Volume 18 • No 9 • Published monthly • ISSN 1757-7365

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com

Taking the lead on

nance

Investing in Indonesia

Why African banks must lead on

climate nance or risk being

sidelined by foreign investors.

Page 13

TEI Times analyses Indonesia’s net zero

pledges and the shifting macro and policy

landscape shaping risk and return for

investors.

Page 14

News In Brief

Diversication and

cooperation more urgent

than ever, says IEA

Governments need to pursue great-

er diversication of supplies and

increase cooperation, as emerging

economies shape energy market

dynamics, says the International

Energy Agency’s latest ‘World En-

ergy Outlook’.

Page 2

US could fall short of 2030

target for generating

capacity

The US needs around 90 GW of

new generating capacity to meet the

growth in peak-hour demand to

2030, and it is not clear how that

need will be met.

Page 4

China’s new pricing

mechanism drives record

renewable growth

China added a record 264 GW of

wind and solar capacity in the rst

half of 2025, as developers rushed

to meet the deadline for inclusion

in the new auction-free renewable

pricing mechanism, according to

Wood Mackenzie.

Page 6

Germany looks to stable

power for industry

Germany has agreed to open a ten-

der for 10 GW of new dispatchable

generating capacity, which will

include batteries and demand-side

response as well as 8 GW of gas

red capacity.

Page 7

Clean electrication driving

the energy transition

The global energy system is on the

cusp of a new era championed by

clean electricity and the increased

adoption of electrication across

the board, according to Rystad En-

ergy’s Global Energy Scenarios

2025.

Page 8

Siemens Energy prots

surge off data centre and GT

demand

Siemens Energy has raised mid-

term prot targets as its order back-

log reached record levels, driven

by demand for gas turbines and

electricity demand for AI (articial

intelligence) data centres.

Page 9

Technology Review

Can AI tame the chaos of the dis-

tributed grid Page 15

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Although there were some positive outcomes at last month’s COP30 climate summit, the

world’s waning appetite for climate action was reected in the failure to create a roadmap to

transition away from fossil fuels. Junior Isles

Record investment in renewables, but growth pace slows

THE ENERGY INDUSTRY

TIMES

Final Word

It’s time to stand and

deliver on clean,

affordable energy, says

Junior Isles.

Page 16

The 30th Conference of Parties

(COP30) summit on climate change,

held in Belém, Brazil last month, saw

progress in areas such as climate -

nance and a just transition but failed to

reach any agreement on dialling down

the use of fossil fuels.

At COP28 in Dubai, UAE, parties

had agreed on the need to transition

away from fossil fuels (TAFF) and it

was hoped that one major outcome of

COP30 would be the formulation of a

‘transition away from fossil fuels

(TAFF)’ roadmap.

The question of how to build on

commitments to move away from fos-

sil fuels, phase out fossil fuel subsi-

dies, and triple renewables and how

to close the ambition gap in nationally

determined contributions (NDCs),

was key at the summit.

By the end of the rst week 88

countries had thrown their support

behind developing a roadmap to tran-

sition away from fossil fuels, so work

could advance over the coming year.

Brazil had pushed the idea ahead of

the summit, garnering support from

among Latin American states, Eu-

rope, and many vulnerable nations.

Some major fossil fuel exporters

such as Norway also expressed open-

ness to the discussion.

As discussions continued Richard

Folland, Head of Policy, Carbon

Tracker said: “This COP will be

judged by what’s achieved on nance

for the South, and on fossil fuel

phase-out. It’s ironic (if not surpris-

ing in this looking-glass world) that

the single largest climate problem –

emissions from oil, gas and coal –

can’t even get on the formal agenda.

If the COP process is unable to de-

liver a roadmap to phase out fossil

fuels, perhaps it’s time that coalitions

of the willing took over.”

The nal ‘Global Mutiro’ text

agreed at the summit’s conclusion,

however, contained no language on a

roadmap for the transition.

The ingdom of Saudi Arabia was

accused of leading the Arab group –

made up of 20 states, including Qatar

and the United Arab Emirates – in the

pushback against a TAFF roadmap.

The kingdom has long resisted at-

tempts to discuss the shift away from

fossil fuels at global climate talks

despite signing up two years ago to

an agreement in Dubai at COP28 for

a transition from oil, gas and coal by

2050, along with almost 200 other

countries.

Since then, however, and now em-

boldened by US President Donald

Trump’s pro-fossil fuel stance, oil and

gas producers and some other large

consumer countries have insisted the

continued use of fossil fuels will be

required to meet global energy needs.

The nal text launched the ‘Belém

Mission to 1.5’, with COP 30 and 31

presidencies tasked with delivering a

report by COP 31 on enabling ambi-

tion and the implementation of NDCs

and national action plans. Australia’s

Climate Minister Chris Bowen – who

will likely be the COP31 President –

has already said that Australia will

“continue to argue” for a transition

away from fossil fuels.

COP30 came as the latest UN report

revealed the world was headed for a

“climate breakdown” at a global aver-

age temperature rise of 2.8C under

existing government policies.

The apparent diminishing interest in

climate change among some politi-

cians appears to be trickling down to

Continued on Page 2

Global investments in the energy tran-

sition reached a new record of $2.4

trillion in 2024 – a 20 per cent increase

from the average annual levels of

202223. About one-third was directed

towards renewable energy technolo-

gies, pushing renewable energy invest-

ment to $807 billion, according to a

new report.

The study by the International Re-

newable Energy Agency (Irena) and

the Climate Policy Initiative (CPI)

nds that despite this milestone, year-

on-year growth of renewables slowed

signicantly, with annual investments

increasing by 7.3 per cent in 2024,

compared to 32 per cent the year be-

fore.

The ‘Global Landscape of Energy

Transition Finance 2025’, released

ahead of the UN Climate Conference

COP30 in Belém, Brazil, was timed to

inform the global nance dialogue by

tracking investments in renewable en-

ergy technologies and their supply

chains. The report looks at regional

trends as well as nance sources and

instruments.

ey ndings show 96 per cent of

renewable energy investments went

to the power sector, continuing a long-

term trend, with global investment in

solar PV reaching a record $554 bil-

lion in 2024, up by 49 per cent. Invest-

ment in energy transition technolo-

gies grew globally, but 90 per cent

remained concentrated in advanced

economies and China, leaving emerg-

ing and developing countries behind.

The report also nds that investment

in renewable power, grids, and battery

storage exceeded fossil fuels invest-

ment in 2024, though fossil spending

is on the rise.

Francesco La Camera, Director-

General of Irena said: “Investments in

the energy transition continue to grow

but not at the pace needed to achieve

the global goal of tripling renewable

capacity by 2030. Funding for renew-

ables is soaring but remains highly

concentrated in the most advanced

economies.”

Irena’s report shows advanced and

major economies can draw on domes-

tic nancial resources to fund energy

transitions. In contrast, lower-income

countries depend on external support

due to underdeveloped nancial mar-

kets, limited scal capacity, high

capital costs, and debt vulnerabilities

amongst others.

Globally, nearly half of total invest-

ment in 2023 was provided as debt,

most of it at market rates. The rest was

invested through equity. Grants ac-

counted for less than 1 per cent. The

urgent need to mobilise investments,

combined with a scarcity of impact-

driven capital such as low-cost debt

and grants, risks exacerbating debt

burdens, according to Irena.

The report also highlights that in-

vestment in energy transition supply

chains and manufacturing remains

critical, but highly concentrated. Chi-

na accounts for 80 per cent of global

investment in manufacturing facilities

for solar, wind, battery and hydrogen

technologies between 2018 and 2024.

COP30 fails to move the

needle on fossil fuel

dependence

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Junior Isles

Governments need to pursue greater

diversication of supplies and increase

cooperation, as a group of emerging

economies increasingly shape energy

market dynamics in the years ahead,

says the International Energy Agency’s

latest ‘World Energy Outlook (WEO)’.

The IEA’s agship annual report

notes that emerging economies – led

by India and Southeast Asia and joined

by countries in the Middle East, Africa

and Latin America – collectively, take

up the baton from China, which ac-

counted for half of global oil and gas

demand growth and 60 per cent of

electricity demand growth since 2010.

Amid these shifts, the IEA stresses that

traditional energy risks affecting the

security of oil and gas supply are now

accompanied by vulnerabilities in

other areas, most visibly in supply

chains for critical minerals due to high

levels of market concentration.

“When we look at the history of the

energy world in recent decades, there

is no other time when energy security

tensions have applied to so many fuels

and technologies at once… ,” said IEA

Executive Director Fatih Birol. “With

energy security front and centre for

many governments, their responses

need to consider the synergies and

trade-offs that can arise with other

policy goals – on affordability, access,

competitiveness and climate change.”

Electricity is at the heart of modern

economies, and electricity demand

grows much faster than overall energy

use in all scenarios in WEO 2025. In-

vestors are reacting to this trend, it said

– spending on electricity supply, and

end-use electrication already ac-

counts for half of today’s global energy

investment. For the moment, electric-

ity accounts for only about 20 per cent

of nal energy consumption globally,

but it is the key source of energy for

sectors accounting for over 40 per cent

of the global economy and the main

source of energy for most households.

“Analysis in the World Energy Out-

look has been highlighting for many

years the growing role of electricity

in economies around the world. Last

year, we said the world was moving

quickly into the Age of Electricity –

and it’s clear today that it has already

arrived,” Dr Birol said. “In a break

from the trend of the past decade, the

increase in electricity consumption is

no longer limited to emerging and

developing economies.”

A pivotal issue for energy security in

the Age of Electricity is the speed at

which new grids, storage and other

sources of power system exibility are

put in place. For the moment, some of

these elements are lagging. Invest-

ments in electricity generation have

charged ahead by almost 70 per cent

since 2015, but annual grid spending

has risen at less than half that pace.

Although the pace varies across the

different WEO scenarios, renewables

grow faster than any other major en-

ergy source in all the scenarios, led by

solar PV. Notably, fresh analysis for

the WEO 2025 maps the new geogra-

phy of demand onto the distribution of

global energy resources, showing that,

by 2035, 80 per cent of global energy

consumption growth occurs in regions

with high quality solar irradiance.

Another common element across

scenarios is the revival of fortunes for

nuclear energy, with investment rising

in both traditional large-scale plants

and new designs, including small

modular reactors. After more than two

decades of stagnation, global nuclear

power capacity is set to increase by at

least a third by 2035.

WEO 2025 forecasts electricity de-

mand to rise by 40-50 per cent by 2035,

driven by sectors including appliances

and air conditioners, manufacturing,

electric mobility, data centres and elec-

tried heating.

Commenting on the outlook, Maria

Mendiluce, CEO, We Mean Business

Coalition, said: “Clean electrication

and renewables are cutting costs, creat-

ing stability and reducing dependence

on volatile fuel imports – proof that the

‘Age of Electricity’ has truly begun.

Accelerating electrication strength-

ens not just energy security, but na-

tional and economic security and it’s

also how we ensure affordability and

inclusion. The IEA shows that in the

net zero pathway, households ulti-

mately can spend less on energy bills

and raise living standards.”

the corporate level. As world lead-

ers prepared to gather in Brazil, a

new study from Siemens Infra-

structure revealed resilience and

energy security was now taking

precedence, with condence in

achieving global climate goals

starting to fall. More than half (57

per cent) of the 1400 global execu-

tives surveyed expect increased

investment in fossil fuels over the

next two years.

But despite COP30’s failure to

deliver a TAFF roadmap, there re-

mains a clear desire to make prog-

ress in the months and years ahead,

including through collaboration

outside of the UN Framework Con-

vention on Climate Change (UN-

FCCC) process.

“While deep divisions were on

display in Belém, we also saw

strong ambition from countries to

continue working together on the

transition away from fossil fuels,”

said Patricia Fuller, President and

CEO of the International Institute

for Sustainable Development

(IISD). “This work will go beyond

COP 30.”

There were also other positive

outcomes at the summit. Although

not on the ofcial agenda, climate

nance was in the spotlight, with

discussions focused on how coun-

tries would deliver the promise of

the New Collective Quantied

Goal on Climate Finance that was

adopted in Baku (COP29) last year,

including through scaling up the

provision of public nance under

Article 9.1 of the Paris Agreement.

Countries reafrmed the path-

way set in Baku to mobilise at least

$300 billion in annual funding for

developing nations by 2035. They

also recommitted to the broader

goal of $1.3 trillion a year from

public and private sources over the

same period. The text proposed by

the COP Presidency and adopted

by parties, recognises the urgency

of this issue by establishing a two-

year work programme on climate

nance to ensure that countries

continue to discuss the implemen-

tation of the Baku commitment.

In addition, agreement was

reached on the nal decision to

develop a just transition mecha-

nism, aiming to enhance interna-

tional cooperation, technical assis-

tance, capacity building, and

knowledge sharing. The establish-

ment of this mechanism represents

a key step forward in making the

Just Transition Work Programme

more actionable.

On the sidelines of the main con-

ference, the WRI Polsky Center for

the Global Energy Transition – in

partnership with Global Renew-

ables Alliance (GRA), Global

Wind Energy Council (GWEC)

and Climate Group’s RE100 initia-

tive – launched the Latin America

Clean Energy Coalition (LACEC),

a major initiative to rapidly scale

corporate clean energy adoption

and accelerate Latin America’s

transition to a low-carbon, climate-

resilient economy.

Global utilities also announced

upgraded annual investment plans

that will see their energy transition

spend rise to $148 billion per year,

up from previously stated ambi-

tions of $117 billion. The plans

revealed by members of the Utili-

ties for Net Zero Alliance (UNE-

ZA), will see a group of the world’s

leading utilities mobilise more than

$1 trillion in energy transition in-

vestments to 2030 since establish-

ment at COP28.

Continued from Page 1

The EU has made “signicant strides”

in transitioning to a robust and inte-

grated Energy Union according to the

Commission’s recently published

‘State of the Energy Union Report

2025’ and the accompanying Climate

Action Progress Report 2025.

The reports show the bloc is pro-

gressing on the clean energy transition

with more renewables, addressing

high and volatile energy prices and

affordability, and further reducing

greenhouse gas (GHG) emissions.

This, it says, is increasing competi-

tiveness, decarbonisation and

strengthening energy security and

independence by reducing EU reli-

ance on imported fossil fuels.

The reports conrm again that the

EU is on track to meet its 2030 climate

target, with a 2.5 per cent decrease of

GHG emissions in 2024 compared to

2023. As conrmed in the Commis-

sion’s assessment of national energy

and climate plans based on the Na-

tional Energy and Climate Plans and

latest greenhouse gas projections sub-

mitted by Member States, the EU

continues to progress towards the

2030 targets of reducing net GHG

emissions by at least 55 per cent com-

pared to 1990 levels and achieving at

least 42.5 per cent renewable energy

in the EU energy mix.

The reports, however, came as the

bloc signicantly weakened its 2040

climate plan to reduce emissions by

90 per cent by 2040 compared with

1990 levels. In early November, sev-

eral member states refused to agree to

the legally binding 2040 goal unless

signicant concessions were made.

They pushed to delay a landmark car-

bon pricing system and also insisted

that member states be allowed to claim

5 per cent of their emissions reduc-

tions by selling international carbon

credits.

The EU’s scientic advisory board

has previously said that the bloc

should cut emissions by at least 90 per

cent without the use of international

credits.

The 2040 reduction target was even-

tually agreed after 18 hours of nego-

tiation. Member states also agreed to

cut emissions by between 66.3 per cent

and 72.5 per cent by 2035 as part of

the submission that had to be made to

the UN ahead of the COP30 summit.

Global energy efciency has picked up

in 2025, but work is still needed by

governments to meet the target set at

COP28 two years ago.

‘Energy Efciency 2025’, the Inter-

national Energy Agency’s (IEA’s) an-

nual report on efciency trends around

the world, nds that global primary

energy intensity – the main metric for

tracking efciency progress – is on

course to improve by 1.8 per cent this

year, up from just 1 per cent in 2024.

The rate of global improvement in

energy efciency has been largely

lacklustre since 2019, averaging

around 1.3 per cent per year. That’s

down signicantly from the average of

around 2 per cent per year between

2010 and 2019.

“The acceleration in global progress

on energy efciency that we’re seeing

in 2025 is encouraging, including

positive signs in some major emerging

economies. But our analysis shows that

governments need to work even hard-

er to ensure efciency’s full range of

benets are enjoyed by as many people

as possible,” said IEA Executive Direc-

tor Fatih Birol.

The global rate of improvement cur-

rently falls well short of the goal of 4

per cent by 2030 that was set at COP28

in Dubai in 2023, where nearly 200

governments agreed to work together

to double the global average annual rate

of energy efciency improvements

by 2030.

The new IEA report identies where

governments are strengthening action

and also analyses the key trends that

are holding back faster progress. For

example, around two-thirds of global

nal energy demand growth since 2019

has been concentrated in industry, a

sector where energy intensity progress

has slowed sharply in recent years.

Brandon Spencer, President at ABB

Motion, said: “Reading the IEA’s latest

‘Energy Efciency’ report, one thing

stands out the most – despite recent

progress, the world is set to miss the

COP28 goal to double energy ef-

ciency progress by 2030. That’s a stark

realisation but it’s one which has a clear

solution. With nearly one-third of

global greenhouse gas emissions com-

ing from industry, and 45 per cent of

global electricity converted into mo-

tion by industrial electric motors, the

industrial sector faces a pivotal chal-

lenge: how to meet rising energy de-

mand while reducing emissions and

operating a resilient business.

“We co-founded the Energy Ef-

ciency Movement which estimated

that industry could be saving roughly

$437 billion annually by 2030 if ten

energy efciencies measures that rely

on mature technologies are employed.

A more ambitious scenario could see

savings go up to $590 billion annually

by 2030. This is huge.”

Headline News

Energy efciency picks up in 2025 but work still needed

Diversication and

cooperation more urgent

than ever, says IEA

n Emerging economies “take up the baton” from China in terms of

energy demand

n Traditional energy risks affecting oil and gas supply now accompanied

by vulnerabilities in other areas

EU progresses towards 2030 climate goals but weakens 2040 plan

Photo by Wolfram K

At Hitachi Energy, we are

leading the transformer

industry with pioneering

technologies and the

largest manufacturing

footprint, inspiring the next

era of sustainable energy.

Hitachi Energy

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

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THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Europe News

Janet Wood

Germany has agreed to open a tender

for 10 GW of new dispatchable gener-

ating capacity, which will include bat-

teries and demand-side response as

well as 8 GW of gas red capacity.

Tenders for 8 GW will be issued next

year, with the new capacity to come

online by 2031.

The gas capacity is about half the

level planned at the start of the year.

The deal between conservative Chan-

cellor Friedrich Merz and his Social

Democrat coalition partners was said

to be a compromise between support-

ers of a swifter energy transition and

those who believe gas will provide

cheaper reliable energy.

The tender will require the new pow-

er stations to be carbon-neutral by 2045

and in agreeing the deal Merz said:

“The tenders will specify that the new

power stations are technically capable

of being red by hydrogen”, although

neutrality could also be achieved by

carbon capture and storage.

Merz said the European Commis-

sion had signalled it would accept the

new plans. The new plant will attract

subsidies because it is only expected

to be used intermittently to balance

new renewables. Another technology-

neutral tender is planned for 2029.

Meanwhile a feasibility study by

Arthur D. Little and Focused Energy

has concluded that the Biblis site in

southern Hesse, where a nuclear pow-

er plant awaits decommissioning,

could become a centre for a Germany

fusion industry.

In cooperation with RWE and other

partners, Biblis would be a hub for la-

ser fusion research, innovation and the

industrial ecosystem, and eventually

house the rst laser fusion power

plant. The feasibility study clearly

shows that the Biblis site is ideally

suited for this purpose.

“This is a great opportunity for Ger-

many, as fusion energy is rapidly gain-

ing strategic importance,” said Thom-

as Forner, CEO and co-founder of

Focused Energy. Hesse has designated

laser fusion as a politically prioritised

eld of action and, together with Fo-

cused Energy, RWE, Schott, Trumpf,

and other partners, has already signed

a declaration of intent for the long-term

development of the Biblis site.

A new plant could adapt existing in-

frastructure, such as turbine halls, stor-

age buildings and reactor domes. That

would signicantly reduce investment

costs and speed up construction, the

report concluded. The required infra-

structure expansion is also clearly de-

nable and technically manageable.

According to the federal govern-

ment’s ‘Fusion Action Plan’, pub-

lished in October 2025, fusion re-

search will no longer fall under

nuclear law but under radiation pro-

tection law – a crucial step for legal

and industrial implementation.

The European Investment Bank (EIB)

has agreed a €500 million green loan

to Iberdrola for the 315 MW Windank-

er offshore wind farm, currently under

construction in the German Baltic Sea.

The nancing, guaranteed by the

Spanish export credit agency, Cesce,

is the rst use of a guarantee developed

by the EIB and Cesce to support green

projects led by Spanish companies

outside Spain.

The project is part of TechEU the EIB

Group’s programme to accelerate EU

innovation which aims to mobilise

€250 billion in investments by 2027

for startups, scale-ups and innovative

companies across Europe.

“EIB’s 500 million nancing for

Windanker helps bring cutting-edge

wind power technology to the Baltic

Sea for the benet of German consum-

ers and local economies,” said Jean-

Christophe Laloux, EIB Director Gen-

eral of Financing and Advisory

Operations within the European

Union. “The green electricity gener-

ated by the project will also take us

closer towards securing Europe’s in-

dependence from fossil fuel imports.”

The agreement comes as German

offshore wind industry groups and

transmission system operators call on

the federal government to reform the

country’s offshore wind auction sys-

tem, warning that the current frame-

work is deterring investment.

The groups propose postponing the

next auction to Q4 2026 to allow time

for a redesign of the tender process.

They have called for the introduction

of contracts for difference (CfDs) and

long-term power purchase agreements

(PPAs) to provide price stability and

lower nancing costs.

The UK has named Wylfa on the Welsh

island of Anglesey as the site for three

Rolls-Royce small modular reactors

(SMRs) totalling almost 1.5 GW. In a

bid to build up the UK’s SMR industry,

the government has pledged 2.5 bil-

lion of funding for SMRs during this

three-year spending period.

A nuclear reactor was closed at Wyl-

fa in 2015 but previous plans to use the

site for a new reactor have been

scrapped. In 2019, Japanese industrial

group Hitachi wrote off 2.1 billion

when it cancelled plans for a reactor

there.

Llinos Medi, Plaid Cymru MP for the

local Ynys Môn constituency, said:

“We await further details to see how

this announcement will secure high-

quality, long-term jobs, and ensure

local supply chains benet from any

development”.

Meanwhile EDF’s new Chief Execu-

tive, Bernard Fontana, told the Finan-

cial Times that he would use the com-

pany’s Sizewell C UK project to show

that reactors can be built on time.

Fontana said: “There’s a deep well

of efciency to be had and which we

need to exploit… We can surprise

positively on the timeline of our pro-

grammes.” Sizewell C has a 10-12 year

construction schedule, whereas EDF’s

Flamanville 3 reactor in Normandy

exceeded its initial ve-year timeframe

by 18 years

UK electricity companies may not

have to pay the full costs of the EU’s

carbon border adjustment mechanism

(CBAM), after industry warned the

EU that the tax could undermine the

business case for interconnectors and

lead to higher emissions.

The CBAM, which is due to take

effect in 2026, will place a carbon

price on third countries who send

carbon-intensive products such as

electricity, cement and steel to the EU.

The aim is to discourage so-called

‘carbon leakage’, which means that

instead of paying for carbon emissions

in the EU, companies import products

from outside the bloc or even move

their processes abroad.

The UK has 12 cables connecting it

to EU countries. It will not be able to

avoid the CBAM charge despite ef-

forts to link the EU and UK emissions

trading systems. But U generators

say CBAM does not account for the

accelerated domestic rollout of re-

newables and will charge as if the

electricity is more carbon-intensive

electricity than is the case.

The CBAM changes would allow

importers of UK electricity to apply

values that factor in the UK’s emis-

sions trading system and carbon price

support mechanism, as well as the

amount of renewable elelectricity it

produces.

Bruegel, Brussels-based think-tank,

warned that the current policy “risks

undermining… security of energy

supply, while the climate benets are

unclear”.

Janet Wood

The EU, UK, Norway and Switzerland

have together reached 100 GW of in-

stalled storage – enough to meet the

peak electricity demand of Germany

and the Netherlands – according to new

analysis by LCP Delta and Energy

Storage Europe.

Pumped hydro storage was the larg-

est storage type, with 50.6 GW, includ-

ing 500 MW added this year in Bel-

gium and Austria. Battery storage is

expanding rapidly, with over 4 GW of

new utility-scale capacity in 2025. That

includes commercial and industrial us-

ers, which increasingly see batteries as

a way to cut costs and use renewable

energy. LCP Delta and Energy Storage

Europe said they expect energy storage

will surpass 215 GW by 2030, with

battery storage passing 160 GW.

Silvestros Vlachopoulos, Energy

Storage Research Lead at LCP Delta,

said: “Reaching 100 GW of installed

energy storage across Europe is a key

moment for the market. It not only

unlocks more space for renewables on

the grid today but sets the stage for

even faster growth in the coming years.

Keeping investors and developers en-

gaged will be essential to scaling proj-

ects and providing the exibility

needed for Europe’s 2030 targets.”

The report came as Merus Power

announced that it has commissioned

the rst grid forming battery in the

Nordic countries for its Swiss cus-

tomer Alpiq. The 30 MW36 MWh

system in Valkeakoski, Finland,

meets the requirements set by Fingrid,

Finland’s transmission system opera-

tor, for large-scale grid forming en-

ergy storage.

Grid forming batteries can support

the power grid during disturbances

and fault situations, unlike traditional

grid following plant. The new battery

can independently maintain voltage

and frequency, improve grid inertia

and support the power system during

disturbances.

Fingrid rst published its require-

ments for grid forming functionality in

type D and C energy storage in the

summer of 2023. Merus Power said it

had developed the technology and

brought it into commercial use in just

two years.

Asta Sihvonen-Punkka, CEO of Fin-

grid Oy, said: “This rst grid forming

energy storage system developed in the

Nordics is an important step towards

an even cleaner and more exible elec-

tricity system.

“It is great to see new technological

solutions like this being introduced to

the power system to ensure its reliable

operation and enable the growth of

renewable energy in the grid.”

Meanwhile Envision has signed an

agreement with Global Energy Ser-

vices (GES) to deploy its batteries in

the Spanish and European markets.

GES will oversee commissioning,

operation and maintenance of batter-

ies along with Envision’s wind tur-

bines. Spain’s National Integrated

Energy and Climate Plan aims to in-

stall storage totalling 22.5 GW by

2030.

European storage

passes 100 GW

milestone

German offshore wind

tenders ‘need redesign’

UK names Wylfa as small

modular nuclear site

UK generators may get partial relief from EU carbon charge

n Batteries are fastest growing sector

n inland gets rst grid forming battery in ordics

Germany looks to stable power

for industry

n 0  of dispatchable power to be tendered n iblis the focus for longterm fusion plans

Photo by Tapio Haaja

Wärtsilä has won an order to supply

27 50SG gas engines to provide con-

tinuous primary power for a new data

centre under construction in the Unit-

ed States. The plant will have a capac-

ity of 507 MW.

The engines will run on natural gas

and can be converted to run on sus-

tainable fuels in the future. The

equipment will be delivered in 2027.

Acciona Energia has announced it will

add a 1 GWh battery energy storage

system (BESS) to the 238 MW Mal-

garida solar power plant in the Ataca-

ma Desert in Chile.

The BESS to be deployed will be a

200 MW/1000 MWh (5 hour dura-

tion) complex, to be deployed at the

Malgarida solar power plant.

The Malgarida plant was commis-

sioned in 2021, comprising two

phases. Acciona Energia said the

batteries will allow the plant’s output

to be stored, managed, and dis-

patched as required.

Siemens Energy has won ve con-

tracts totalling $65 million to moder-

nise the port in Nassau, Bahamas.

The scope includes power genera-

tion, interconnection to the national

grid, and ship-to-shore electrica-

tion. At the core of the solution is a

combined cycle gas red power

plant, featuring an SGT-800 gas tur-

bine and an SST-300 steam turbine.

This will replace diesel powered

generation on docked cruise ships

with cleaner energy sources, cutting

emissions by up to 140 000

tons annually.

The equipment will be manufac-

tured and assembled at Siemens En-

ergy facilities in Sweden, China,

Spain, and Brazil.

TotalEnergies and Google have signed

a 15-year power Purchase Agreement

(PPA) to supply Google with a total of

1.5 TWh of certied renewable elec-

tricity from TotalEnergies’ Montpelier

solar farm in Ohio. The solar facility

is nearing completion and is connect-

ed to the PJM grid system.

Will Conkling, Director of Clean

Energy and Power at Google said:

“Strengthening the grid by deploying

more reliable and clean energy is

crucial for supporting the digital in-

frastructure that businesses and indi-

viduals depend on.”

Arabelle Solutions will deliver a steam

turbine, a GIGATOP 2-pole generator

and associated auxiliaries and con-

trols, for the Natrium nuclear power

plant currently under development in

Kemmerer, Wyoming, USA, replac-

ing a retiring coal red plant.

The 500 MW steam turbine and

generator will form key components

of the Natrium plant energy island.

The power plant will feature a 345

MW sodium-cooled fast reactor and

a molten salt energy storage system

that allows the plant to temporarily

boost output to 500 MW.

The plant is currently scheduled to

enter operations in 2030.

Once operational, the rst Natrium

plant will deliver enough electricity

to power approximately 400 000

homes.

Iberdrola, in collaboration with Vic-

Grid, will develop the VNI West 240

km, 500 kV double-circuit transmis-

sion line project between Victoria and

New South Wales in Australia. Iber-

drola will design and develop the proj-

ect and subsequently submit a pro-

posal to build, own and operate the

transmission line.

The target construction completion

date is 2030. The line is expected to

increase bi-directional transfer ca-

pacity by up to 3.5 GW.

Va lm e t w i ll d el iv e r a c i rc ul a ti n  u i-

dised bed (CFB) boiler, ue gas treat-

ment and automation system for

Cheng Loong Corporation’s (CLC)

Houli paper mill in Taiwan.

The boiler will use various waste

and biomass streams as fuel to pro-

duce electricity and heat for the mill.

The CFB is a signicant invest-

ment in decarbonisation as it will en-

able the reduction of coal usage and

replaces an older less efcient waste

boiler. CLC has estimated that this

new boiler will reduce mill’s annual

emissions by 48 000 tonnes.

AGL Energy has committed A$185

million to buy four gas turbines from

Siemens Energy for its rst power sta-

tion in Western Australia.

The turbines will be for the 176

MW Kwinana Swift Gas 2 project,

which is scheduled to supply peak-

ing power capacity from October

2027. The Kwinana power plant is

aligned with the objective of the

Western Australian government to

decommission all state-owned coal-

red power plants by 2030.

AGL said that the Kwinana Swift

Gas 2 plant will provide backup

power during periods of high de-

mand and contribute to the overall

security of the Western Australian

electricity network.

GE Vernova has won its rst onshore

wind repower upgrade agreement out-

side the USA, signing a deal with Tai-

wan Power Company (TPC) to supply

25 repower upgrade kits in Taiwan.

Under the terms of the agreement,

GE Vernova will provide repower

upgrade kits for 25 1.5 MW-70.5 m

turbines and deliver a ve-year

O&M service package.

Initial components are scheduled

for delivery in Q4 2025, with retrot

installation taking place throughout

2026 and 2027.

Wind repowering enables turbines

approaching the end of their de-

signed operational life to be mod-

ernised and returned to service with

improved reliability and perfor-

mance.

Chang Chun Petrochemical of Taiwan

has ordered an H-25 gas turbine from

Mitsubishi Power. Chang Chun Petro-

chemical plans to convert the cogen-

eration facility at its Miaoli Factory,

located in Miaoli City in north-central

Taiwan, from existing heavy oil and

coal red boilers to a high efciency

natural gas red system.

The H-25 gas turbine will be the

core of the new gas red cogenera-

tion facility, with an output of ap-

proximately 30 MW. Operation is

scheduled to begin by the end of

2028. Mitsubishi Power will deliver

the main gas turbine and auxiliary

equipment, as well as dispatch engi-

neers to support equipment installa-

tion and commissioning.

Mitsubishi Power previously re-

ceived an order for an H-25 gas tur-

bine for the Miaoli Factory in 2023,

with operation planned to start

around summer 2026.

Nordex has won an order from Grupo

Enhol for the supply and installation

of six N163/5.X wind turbines in Na-

varra, Spain. The repowering project

Caparroso will have a total installed

capacity of 34.2 MW. Nordex will also

provide a 20-year service agreement.

The wind farm is located close to

the village of Caparroso. Installation

work is scheduled to start in July

2026, with commissioning due by

February 2027.

Towers, blades, and nacelles for

the Caparroso project will be manu-

factured in Spain, while hubs and

drive train components will be pro-

duced in Germany.

Separately, Nordex won an order

from SSE to supply and install 12

N133/4.8 wind turbines at the Drum-

nahough Wind Farm in Donegal, Ire-

land. This project is jointly owned

by joint partners SSE and FuturEner-

gy Ireland. Delivery and installation

is scheduled to start in 2027.

Va lm e t w i ll s u pp ly a n a ut o ma ti o n s y s-

tem to Helen Ltd’s Hanasaari electric

boiler plant and a thermal accumulator

being built in Helsinki, Finland. Once

completed, it will be Europe’s largest

electric boiler plant.

The mission-critical Valmet Dis-

tributed Control System (DCS) will

ensure high availability, enhance

performance, and allow Helen to

capitalise on energy market price

volatility with greater exibility and

protability.

As the plant’s main automation

system, the Valmet DCS will control

and monitor the four electric boilers

and two thermal accumulators,

which will be operating as a single

complex.

Urenco has signed an agreement with

EDF to supply uranium enrichment

services for nuclear power stations

across France and the UK.

The multi-billion euro contract will

enable Urenco to support EDF’s nu-

clear eet into the 2040s, contribut-

ing to the reliable and sustainable

generation of electricity.

GE Vernova has received an order

from Enea Group (Enea) for two of its

9HA.01 gas turbine combined cycle

blocks with a combined output of

about 1.2 GW to support Enea’s grad-

ual replacement of coal red power

generation produced at the Kozienice

station.

This project is in line with the Enea

Group’s Development Strategy 2035

and forms part of the company’s re-

sponsible energy transition plan. Im-

plementation of the strategy is ex-

pected to reduce the Group’s

emissions by 64 per cent by 2035.

Enea aims to become a fully climate-

neutral company by 2050.

ABB to modernise CSP

automation system

ABB has been selected by independent

power producer ContourGlobal to re-

place the solar eld control system at

four concentrated solar power (CSP)

facilities in southwest Spain.

The existing systems, which have

been in operation for over 10 years,

will be migrated to ABB SCADA,

based on ABB’s AC500 and AC

800M platforms. These will provide

each CSP plant with a scalable,

high-performance control solution

that ensures long-term system avail-

ability and enhanced cyber security.

JA Solar has signed a module supply

agreement with Larsen & Toubro

(L&T), the EPC contractor for the Sa-

markand 1 and 2 solar power plants in

Uzbekistan.

Under the contract, JA Solar will

supply all of the PV modules for the

two projects.

The Samarkand 1 & 2 projects be-

ing developed by ACWA Power will

have a combined capacity of 1.2 GW,

located near the city of Samarkand in

central Uzbekistan. The projects sup-

port Uzbekistan’s national target of

having 25 per cent of its electricity

being supplied by renewables by

2030.

The European Bank for Reconstruc-

tion and Development (EBRD) is pro-

viding 22.3 million in nancing to

Power One, a private Ukrainian energy

company, to help strengthen Ukraine’s

energy security.

The EBRD’s nancing is supported

by an additional €3 million invest-

ment grant from Norway. The fund-

ing will support development of new

gas red peaking capacity and bat-

tery energy storage systems (BESS).

Power One will use the loan to build

and operate gas engine plants with a

total capacity of 36.8 MW, and BESS

with a combined capacity of 31.5

MW across several locations in west-

ern Ukraine. The new assets will sup-

port the integration of more renew-

ables into Ukraine’s electricity mix.

Wärtsilä has signed a three-year Guar-

anteed Asset Performance (GAP)

agreement with Société Mauritanienne

d’Electricité (SOMELEC) for a power

plant in Nouadhibou, Mauritania.

The 34 MW balancing power plant

is equipped with two Wärtsilä 32 and

two Wärtsilä 46 engines.

The new agreement signicantly

expands the scope of the previous

agreement from technical advisory to

asset performance. Wärtsilä will pro-

vide comprehensive lifecycle servic-

es in the GAP agreement, ; un-

planned maintenance; major

overhauls at 12 000 hour intervals;

spare parts for engines, auxiliaries,

and critical safety components.

Kaishan Group’s subsidiary Kaishan

Terra Green Ammonia Limited has

signed a deal with Kenya’s electricity

producer KenGen to build a 165.4 MW

geothermal power plant in Kenya.

The $800 million project will pro-

vide power for the production of

100 000 t/y of green ammonia,

along with derivatives such as urea

and calcium ammonium nitrate for

fertilizer production.

Americas siaacic

Wärtsilä wins 507 MW

US data centre order

Iberdrola to build

Victoria-NSW link

Valmet WtE boiler to

decarbonise Houli mill

Nordex wins 34 MW

repowering order in Spain

Valmet’s DCS to boost

energy market eibility

Urenco and EDF sign

nuclear fuel deal

GE Vernova H-Class units

for Kozienice

JA Solar wins 1.2 GW

contract in Uzbekistan

EBRD grants €22.3 million

to Power One

Wärtsilä balancing plant

for Mauritania

Kaishan plans Kenyan

geothermal project

AGL invests A$185 million

for Siemens Energy GTs

GE Vernova to repower

Taiwan wind tur bines

Taiwan orders s econd

Mitsubishi H-25 GT

Siemens Energy to

modernise port power

TotalEnergies s igns PPA

for Google data centres

Arabelle Solutions unit for

Natrium NPP

Acciona Energia signs

hile E retrot deal

International

Europe

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Tenders, Bids & Contracts

or African countries attending

the recently concluded COP30

climate summit in Belém, Bra-

zil, a key concern was that the move

to a low carbon energy system must

be a just transition. In a continent

which represents only about 3 per

cent of global carbon emissions, and

where some 600 million still have no

access to electricity, their stance on

the global approach to tackling cli-

mate change in a fair and just man-

ner is understandable.

With no access to the grid, distrib-

uted power systems are at the heart

of bringing electricity to many. But

while accessing capital for such proj-

ects is not necessarily a challenge,

concerns remain around risk. It is an

issue that was widely discussed at

African Energy Week, which took

place at the beginning of October.

With regards to climate nance

there is wide acceptance that Africa’s

energy transition will be a just transi-

tion. Recent oil and gas discoveries

across the continent and a need to

give 600 million people access to

power, means the energy transition

will be based on more than purely

renewables.

Sepo Haihambo, a speaker at the

conference, later told TEI Times:

“Renewable energy will be a build-

ing block in resourcing and power-

ing the continent but it’s just not go-

ing to be a fully renewable energy

transition because there are a lot of

people that have been left behind

that need to be included, and the

continent has to industrialise. Africa

has good sun exposure, so solar en-

ergy becomes a key player; wind be-

comes a key player; gas to power re-

mains very much part of the

conversation; and there’s also explo-

ration into green hydrogen.”

On climate nance, she said the

amounts needed for funding are rel-

atively large. Although there is no

ofcial gure for connecting 600

million people, the World Bank’s

‘Mission 300 Project’ has pledged

funding to connect 300 million peo-

ple and ensure the long-term infra-

structure is in place to maintain that

connectivity. So far, the World Bank

has committed $30 billion, the Afri-

can Development Bank has com-

mitted $18 billion, and other devel-

opment partners have committed

over $6 billion. And while there is

no ofcial estimate, the total sum

raised by the Mission 300 Project is

$54 billion.

Although foreign investment from

international institutions is crucial,

Haihambo notes that African lenders

have a key role to play in providing

local intel in bringing large projects

to fruition, as well as in nancing

smaller rural electrication projects.

“A lot of the time, the international

nanciers look at larger projects.

What African banks do is they bring

local nuances and understanding of

what is required to make these proj-

ects successful,” she said. “There’s a

lot of stakeholder engagement that

needs to happen across different par-

ties – African governments, African

banks, African institutional inves-

tors, and international banks.”

According to Haihambo, the big-

gest challenge to projects where in-

ternational funding is the dominant

source, is that the projects may be

designed in ways that do not natural-

ly support the way that a community

operates. This is evident in other in-

frastructure projects, she said.

“If you look at toll bridges and toll

roads in Africa, there has been mixed

success. Some countries have had

full success, while in others it’s been

not so great. If you know how soci-

eties operate, culturally, you [as a lo-

cal bank] will know that toll bridges

are not widely utilised. So, it’s the

adaptation to the fact that there’s

now going to be these fees – the so-

cialisation and change management

around what that entails – that makes

a project viable. If you have local

participation, that’s the kind of in-

sight that they can bring into the

conversation, to say: ‘you know, ac-

tually, I think this transaction needs

to be structured a little bit differently

and this is why...’”

An example in the energy sector,

might be in projects developed for

‘pay-as-you-go power’. Such proj-

ects are common across the conti-

nent. For project owners this ar-

rangement often means unpredict-

able cash ows. Haihambo ex-

plained how local intel could help

push these projects through.

“If you are working on a purely

metered basis, cashows are predict-

able. With ‘pay-as-you-go’ the cash-

ow prole may not be as smooth,

which could impact the repayment

prole of the facility, said Haiham-

bo. “As an African banker bringing

that viewpoint, you would consider

how to structure this transaction to

cater for this. It’s not to say the proj-

ect is unviable; the solution might be

something small, such as moving

from monthly repayments to quarter-

ly or bi-annual repayments. That

small insight makes the difference

between having arrears on facilities,

and having facilities that perform

throughout the duration of the loan.”

The local knowledge of African

banks and consequently better un-

derstanding of risks involved, was

central to kickstarting rural renew-

able projects in Namibia just over 10

years ago.

“Renewable energy was very slow

to get off the ground in Namibia be-

cause there were Implementation

Agreements that commercial banks

and international nanciers wanted

the government to undertake but the

point of view was that the govern-

ment would not play that role,” ex-

plained Haihambo. “The Develop-

ment Bank of Namibia, however,

took the bold step of nancing the

project without these Implementa-

tion Agreements being in place.

“It was the rst renewable project

to be nanced in the country. It

showed the viability of the project

and became a case study for other -

nanciers to start nancing other re-

newable projects. Until then, Imple-

mentation Agreements had been

show-stoppers. But with Develop-

ment Bank of Namibia stepping in, it

showed that Implementation Agree-

ments were not a show-stopper after

all.”

Haihambo added: “This led to lo-

cal Namibian commercial banks

participating in subsequent projects;

structuring them a little bit differ-

ently, allocating risks to different

stakeholders. It has all been rela-

tively good.”

Haihambo notes that big projects

using fossil fuel sources are still

needed for countries to hit their ener-

gy targets and stressed that African

banks must be mindful of not being

sidelined.

She said that local banks must have

greater dialogue with their respective

country governments to understand

capital expenditure plans and what

the areas of priority are. And then

“work as a bridge” between the

countries and international institu-

tional investors.

Essentially, it is a case of getting

all the stakeholders around the table

so that each can bring their strengths

to the project.

“At this time there are different

conversations but there should be

one conversation,” said Haihambo.

“This allows better risk allocation

because then you will better under-

stand the problem that each stake-

holder can solve, and what part of

the project they are best suited to

capture value from.”

Haihambo is condent that work-

ing this way will ultimately benet

the nancing of African projects and

drive rural electrication, despite the

US’ pull back in providing climate

nance.

She concluded: “The Green Climate

Fund is seen as a lever that can be

used to support climate nance. The

President of Namibia has announced

Namibia’s bid to host the [African

Regional Hub of the] Green Climate

Fund, so this is largely positive.

“In terms of what is available, the

Fund has not been exhausted yet and

what we are seeing is more African

local commercial banks issuing Sus-

tainability Bonds. It’s not a large

number but it does create alternative

funding sources from domestic insti-

tutional investors to participate in

climate nance on the continent. But

the key thing is we don’t have a cap-

ital problem, we have a risk alloca-

tion problem, and African banks are

best placed to navigate this complex

environment.”

Sepo Haihambo is a seasoned pan-

African banker and former CEO of

Commercial Banking at FNB Na-

mibia. She is also an investment

banker and economist with a career

spanning over two decades.

evelopment nance and foreign investment are important lifelines, but African banks are deeply ingrained in the

fabric of local societies and must play a much bigger role in supporting energy proects for local communities like rural

electrication. Junior Isles caught up with panAfrican banker and economist, epo aihambo, who eplains why

African banks must lead on climate nance  or risk being sidelined by foreign investors.

African banks must lead on

climate nance

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Industry Perspective

Photo by Tope J. Asokere

Haihambo: African banks

are best placed to navigate

the complex environment

income, and governance standards

below peers with the same rating.

Domestic interest rates have fallen

as Bank Indonesia has eased policy,

with the benchmark now at 4.75 per

cent after cuts totalling 150 basis

points since late 2024. The rupiah has

stayed volatile, weakening from

about IDR15 400 per US dollar at

end-2023 to an average of IDR16 162

in 2024, and trading between IDR14

211 and IDR17 323 in 2025. Policy

now focuses on keeping the exchange

rate stable while holding ination

near the 2.5 per cent ±1 target.

Some energy transition investment

risks highlighted by an OECD report

in 2020 remain true today. Broader

risks include foreign investors facing

overlapping mandates among minis-

tries, evolving carbon-pricing rules,

as well as currency and macroeco-

nomic risks typical for long-tenor in-

frastructure assets. There is also regu-

latory uncertainty, such as the pending

renewable bill which has been in

preparation for several years, a lack of

tariff clarity, mandatory partner

schemes, local content rules, deliv-

er-or-pay obligations, and procure-

ment complexity. All these factors

raise project risk, according to an

analysis by the Institute for Energy

Economics and Financial Analysis

(IEEFA).

Policies and incentives

Indonesia has established a compre-

hensive policy framework to acceler-

ate renewable energy deployment and

coal phase-out. Presidential Regula-

tion 112/2022 forms the cornerstone.

It sets technology-specic tariff ceil-

ings and mandates PLN to prioritise

renewables in its planning. The regula-

tion also creates pathways for early

coal retirement whilst establishing

clear procurement mechanisms for

renewable projects.

The tariff framework uses feed-in

rates, benchmarks and auctions tai-

lored to technologies and regions.

Developers must navigate local con-

tent requirements and a mandatory

partner scheme, though recent re-

forms will hopefully streamline these

barriers. The Ministry of Energy and

Mineral Resources and PLN jointly

administer procurement processes,

which now extend to small- and me-

dium-scale projects alongside large

grid-connected facilities.

Carbon pricing provides an addi-

tional driver. Law 7/2021 and Presi-

dential Regulation 98/2021 created

the Nilai Ekonomi Karbon frame-

work. It enables emissions trading,

carbon taxation and results-based

payments. The power sector entered

the national Emissions Trading Sys-

tem in 2023, with trading now opera-

tional. New rules are step-by-step

setting up a national system to register

and approve carbon units, which will

allow projects to generate income by

selling carbon credits.

Fiscal incentives sweeten the in-

vestment case. Renewable projects

can access 30 per cent income tax re-

ductions spread over six years, ac-

celerated depreciation, VAT exemp-

tions and import duty waivers on

equipment. Large-scale projects may

qualify for tax holidays. The Ministry

of Finance and BKPM (the Invest-

ment Coordinating Board) oversee

these schemes, which stack with tariff

support to improve project returns.

ndonesia’s energy transition story

is one of big ambition, stubborn

coal dependence, and fast-evolv-

ing investment opportunities.

Decarbonisation commitments

The country has found its net zero

emissions commitments challenging,

given the important role of the fossil

fuel industry in its economy. It rst set

a carbon-neutrality target for 2060 or

sooner in 2021 and has reiterated this

goal several times since. One demon-

stration of a nation’s commitment is

through a Nationally Determined

Contribution (NDC) submitted to the

United Nations. Indonesia submitted

its second NDC in 2025. The country

expects emissions to peak in 2030, at

lower levels than previously antici-

pated, and projects that they will then

gradually decline

The “2060 or sooner” objective re-

ects a delicate balance between the

government’s climate ambitions and

national realities, including poverty

reduction, economic growth, and the

role of fossil fuels, which account for

a small share of GDP but remain an

important source of export earnings

and employment.

In the shorter term, the world’s

ninth-largest emitter is focused on

setting sectoral pathways for energy,

efciency, and electrication. Energy

efciency, clean energy technologies

in the electricity sector, and the elec-

trication of transport are expected to

provide around 80 per cent of emis-

sions reductions from the energy

sector to 2030, according to a 2022

International Energy Agency (IEA)

report.

The country has found these path-

ways challenging, given its continued

heavy dependence on coal, slow

progress in the deployment of renew-

ables, and the complexity of phasing

down coal red generation. These

obstacles are well recognised at the

highest level, and a variety of strate-

gies are being considered to address

them.

Energy mix

Indonesia’s energy is heavily skewed

to fossil fuels. It accounts for most

of the country’s energy supply. In its

primary energy mix in 2024, coal

accounted for 42.6 per cent, oil 28.6

per cent, natural gas 15.4 per cent, and

clean energy including hydroelectric-

ity and renewables was responsible for

13.4 per cent, according to data from

the Energy Institute’s ‘Statistical Re-

view of World Energy’ (see chart).

The electric power generation mix

had a similar fossil fuel reliance. Coal

red generation took up a 60.9 per

cent share, natural gas generation had

a share of 17.6 per cent, while hydro,

renewables and other clean energies

were responsible for 19.6 per cent.

Some oil generation was still being

used in 2024, but it amounted to less

than 1.9 per cent of the total.

An earlier study by Ember, a think-

tank, highlighted that the country’s

renewable energy capacity has been

growing. Between 2018 and 2023,

Indonesia commissioned about 3.3

GW of renewables, with the total

reaching roughly 13 GW by 2023.

The additions included mainly bioen-

ergy (1.3 GW), hydro (1 GW), geo-

thermal (0.5 GW), and solar power

(0.5 GW). Based on planned capacity

additions under PLN, the national

utility company’s 2025–2034 Elec-

tricity Supply Business Plan, about

69.5 GW of capacity will be con-

structed for an estimated $188 billion

(including grid investments). Almost

53 GW or 76 per cent, will be renew-

able energy additions, highlighted PT

Geni Buana Nusantara, an Indonesian

engineering consultancy. Part of the

plan is also to build 0.5 GW in nucle-

ar power generation, a rst for the

country.

Investment environment

Three leading credit rating agencies

rate Indonesia’s credit as “lower me-

dium grade”, two notches above the

non-investment grade level. For the

foreign currency long-term rating,

Moody’s has maintained a Baa2-sta-

ble rating since 2018, S&P a BBB-sta-

ble rating since 2022, and Fitch a

BBB-stable rating, reafrmed in

March 2025. Fitch has commented

that its rating is based on expectations

of solid medium-term growth and

relatively low government debt com-

pared to GDP. It adds that its rating

is constrained by weak government

revenue collection, low per-capita

Recent policy moves include the

B40 biodiesel mandate launched in

July 2025, requiring 40 per cent palm-

oil blending nationwide. JETP-linked

analyses continue mapping additional

incentive mechanisms to mobilise

private capital for renewables and

accelerate coal retirement. Together,

these measures create a multi-layered

framework to drive Indonesia’s ener-

gy transition.

Recent policy changes include the

B40 biodiesel rule, fully in place from

July 2025, which requires all diesel

fuel to contain 40 per cent palm oil.

Short analyses done under Indone-

sia’s Just Energy Transition Partner-

ship (JETP) are still identifying new

incentives to attract private invest-

ment into renewables and to speed up

the closure of coal plants. Together,

these actions build several layers of

support driving the country’s energy

transition.

Investors backdrop

Foreign investors are now deeply in-

volved in Indonesia’s energy transi-

tion, often alongside the state utility

PLN. Masdar, the UAE clean-energy

developer, co-owns the Cirata oating

solar plant in West Java with PLN Nu-

santara Renewables; the 192 MWp

project started operating in November

2023 and is Southeast Asia’s largest

oating PV plant, backed by a

long-term power purchase agreement

and international project nance lend-

ers. Masdar and PLN have since signed

agreements to expand Cirata by up to

500 MW and to develop another oat-

ing solar project, signalling a replica-

ble joint-venture model for large-scale

renewables.

Cross-border projects add another

layer of activity. Indonesia and Singa-

pore have signed a series of Memo-

randum of Understanding to enable

utility-scale solar and battery projects

in locations designed to export power

to Singapore through undersea cables;

these schemes typically use consortia

of foreign utilities and developers,

with joint-venture and project-nance

structures. At the same time, PLN is

partnering with a range of indepen-

dent power producers across solar

and wind, opening more space for

equity co-investment rather than rely-

ing only on EPC-type contracts.

Multi-lateral development banks

(MDBs) are shaping the pipeline. The

Climate Investment Funds’ Acceler-

ating Coal Transition programme al-

locates about $500 million of conces-

sional nance to Indonesia, aiming to

leverage more than $3 billion of

MDB and commercial co-nancing

for coal retirement, grid upgrades,

and new renewables. The Asian De-

velopment Bank’s $150 million loan

to PT SMI under the SDG Indonesia

One – Green Finance Facility is in-

tended to be passed on as loans to at

least ten green infrastructure projects,

de-risking private capital in sectors

such as solar and mini-hydro. To-

gether, these direct investments,

cross-border projects, and blended--

nance platforms give a strong avour

of how international capital is starting

to scale Indonesia’s clean-energy

transition.

Prepared for The Energy Industry

Times by Joseph Jacobelli of actE, a

climate business and nance insights

platform (asiacleantechenergy.com).

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Energy Transition Investment Series

This month

TEI Times analyses

Indonesia’s net zero

pledges, its still

fossil-heavy power

mix, the shifting

macro and policy

landscape shaping

risk and return

for investors, and

highlights examples

of where capital is

already owing.

From coal to solar: investment

trends in Indonesia

Fossil fuels occupy the lion’s share of Indonesia’s energy and electricity mix

he energy sector must contend

with numerous unexpected

phenomena that impact its op-

erations. From articial intelligence

(AI) to decentralisation, this work

has shifted in focus to independence,

analytics and resilience. The advan-

tages are numerous, but so are the

number of end-points global entities

must handle. Will AI streamline

power ow and maintenance to aid

the industry in the age of the distrib-

uted grid?

Forecasting is the rst way it could

prove invaluable to the landscape.

Intermittency is one of the most cha-

otic aspects of the distributed grid

and renewable energy, but AI inte-

grations make their performance eas-

ier to predict. The data is more pre-

cise than other readings because

algorithms can learn over time via

historical and incoming data to make

determinations.

Conventional weather models are

outdated, and an AI model can pro-

cess immense, complex datasets

with seemingly innite points within

seconds. It could pull from assets

like satellites to understand sun ex-

posure or cloud cover. An algorithm

could also foretell how much gener-

ators would produce based on

weather cameras or maps. Eventual-

ly, it will identify patterns it can

make predictions from.

Awareness is a notable advantage

in boosting climate resilience and

encouraging mitigation. It can enable

communities to anticipate periods of

low generation or visualise how

much electricity they have in battery

reserves if a blackout occurs. Dis-

tributed energy resources (DERs)

have an accurate, live perspective

over their assets to prepare for vola-

tile load distribution or a natural di-

saster and reduce fossil fuel reliance.

Most only consider how much re-

newable power generators can create

in a distributed grid. However, AI

also weighs how much demand is

shifting as clean power adoption

continues. The modernising grid

must balance shifts in consumer con-

sumption with transformations in

generating technologies.

Algorithms and machine learning

can observe households and busi-

nesses and discover when usage

peaks and valleys happen to control

distribution. If most homes are unoc-

cupied during the day, then it can re-

serve resources for later to make it

less expensive and more stable.

This is invaluable in an age

where grid oversight is minimal

and sending workers to do manual,

visual inspections is a time-consum-

ing process, especially after a crisis.

AI enables remote inspections and

remote diagnostics to prevent fail-

ures more frequently. Its algorithms

can have eyes on the distributed grid

at all hours of the day. If a trans-

former or cable is faulting or near

failure, the software notices it with-

out needing a technician on-site.

Trees can fall on power lines, or a

wildre could burn grid infrastruc-

ture. A powerful ood could even

threaten the stability of underground

cables if it moves the soil enough. AI

gives global energy workers extra

eyes to observe and manage even the

most remote vegetation and weather

conditions.

These circumstances can occur in

urban and rural areas, and AI makes

it easier to distribute oversight equal-

ly. Algorithms work alongside com-

plementary technologies like videos

from drones or lidar to see how fast

trees are growing or how much wa-

ter levels rise. The details let experts

create better emergency manage-

ment plans by mapping areas with

the highest risk.

The grid collects this information

via sensors and notices key parame-

ters like equipment temperature and

acoustic trends. It could also sense

changes in transmission. Operators

can use these signatures to determine

the best course of action for repairs

before they signify replacement. Be-

cause the data is so accurate, even

the smallest anomalies become ap-

parent if they are leading to a larger

problem. For example, it could sense

corrosion buildup or strange vibra-

tions in a transformer months before

it would shut down.

Maintenance schedules become

more informed and well-timed. In-

stead of relying on outdated ones,

they can perform as-necessary xes

to reduce waste, save time and mend

resources before they fail. Doing so

can extend peak performance, which

is crucial during environmental

stressors like heat waves.

The need for resilience highlights

the importance of distribution and

transmission infrastructure, know-

ing how and where to send energy

if its common route is disrupted.

One of the benets of a distributed

grid is being able to redirect re-

sources if an endpoint goes ofine

or fails. AI can automatically do so

in the distribution management sys-

tem to the locations that need them

most via the most optimised path.

Services can continue without pause

while notifying technicians where

the problem is.

This adaptability will lower wor-

ries about microgrid loops while re-

ducing the number of outages and

expensive recovery processes. Engi-

neers can programme the reclosers,

switches and other machinery

throughout the area to respond to

specic performance triggers so the

grid self-heals within minutes.

Self-sufciency is another way AI

can help microgrids in smaller com-

munities. If the primary grid – re-

gardless of how distributed it is –

goes ofine, then households and

businesses can keep their lights on.

Additionally, microgrids help organ-

isations and communities sustain en-

ergy supplies during natural disas-

ters, which saves money and

recovery time. Doing so is crucial so

that critical infrastructure like hospi-

tals has data-driven insights on on-

site power equipment, allowing them

to tend to patients.

AI makes this viable via automa-

tion. Engineers can programme it to

make real-time decisions based on

internal capabilities like critical

loads and the health of connected as-

sets like batteries. Then, it can opti-

mise output and control distribution

to maximise power usage, prolong-

ing its duration as much as possible,

while minimising non-essential tasks

to conserve resources.

Smart functionality is also vital in

improving the health and lifespan of

other technologies throughout the

grid. Electric vehicles (EVs) and

chargers are often forgotten yet cru-

cial pieces. They could create signi-

cant power, and AI could balance

their utility to help them charge as

fast as possible while preparing for

potential outages. This enables vehi-

cle-to-grid (V2G) operations, creat-

ing virtual power plants everywhere

the technology resides.

Over time, the algorithms learn the

local population, their driving habits

and the capacity of their EV equip-

ment. They also learn driving sched-

ules and charging needs, cutting in-

stances of overcharging so chargers

can send some power back to the

grid during peak hours when conges-

tion issues may arise. In a disaster, a

eet of parked EVs is like a moving

battery storage solution, waiting to

help communities during a blackout.

AI software already provides many

advantages to the average consumer,

but it could also pad their budgets by

enabling peer-to-peer trading. These

platforms work with innovations like

blockchain to heighten security and

increase traceability when selling

electricity resources. Some even

work with V2G setups. With an AI

model overseeing exchanges, the

power market becomes smarter and

better automated. It can also adjust

pricing if necessary, without disputes

from community members.

This means a lot more citizen data

is travelling through the system.

Even the distributed grid is vulnera-

ble to cyberattacks, and the number

of threats hitting grid infrastructure

is increasing. While decentralisation

is ideal for preventing lateral move-

ment, a distributed grid has numer-

ous connection opportunities. The

attack surface is larger, which gives

threat actors more vulnerabilities to

exploit.

An algorithm can serve as a securi-

ty system, detecting and isolating

potential threats. Just as it learns en-

ergy behaviours, it can also observe

trafc and communication patterns

in its network. The model discovers

how equipment like inverters and

control panels are supposed to func-

tion so it can notice when they are

acting suspiciously. Then, it can no-

tify technicians when malicious ac-

tors are present to prevent grid desta-

bilisation and data extrication.

This is possible because power

ow in a distributed grid is a two-

way setup, while in the traditional

grid, energy travelled only in one

direction. AI ensures these exchang-

es are controlled in real-time to pre-

vent overloads and thermal losses.

Using training models like rein-

forcement learning, it can discover

where overloads are common or

where voltage dips occur. These im-

balances could cause grids to col-

lapse, especially with newly estab-

lished green generators.

Resilience increases when AI can

make these decisions for communi-

ties. Grid frequencies stay regulated,

and load balancing requires no man-

ual intervention. Connecting distrib-

uted hardware requires a central so-

lution, and AI could optimise

communications between seemingly

disparate generators.

This would allow DERs to main-

tain agency and earn the other bene-

ts of individual assets while consid-

ering the big picture of electricity

infrastructure. Stakeholders must

embed AI into their work, as the in-

sights will solve the pain points

caused by the grid becoming in-

creasingly distributed.

he use of articial intelligence is growing in the energy sector. Ellie Gabel eplores some of the more interesting

applications as the power industry accelerates the transition to more distributed systems based on renewables.

Can AI tame the chaos of

the distributed grid?

THE ENERG INDUSTR TIMES - DECEMBER 2025

Technology eview

Photo by Pixabay

THE ENERGY INDUSTRY TIMES - DECEMBER 2025

Final Word

ne of the most pressing ques-

tions in many countries is how

to deliver both clean and af-

fordable power. With domestic elec-

tricity costs being among the highest

in the developed world, the UK is an

ideal place to debate the issue.

The price of energy was top of the

agenda at the Aurora Energy Transi-

tion Summit in London last month –

well timed, just a week ahead of the

government’s budget. In his keynote

address Jonathan Brearley, CEO at

Ofgem, the UK’s energy regulator

outlined where the country is today by

rst asking: “Why are prices where

they are today; why are they so high?”

He noted that gas has been a major

factor, with gas wholesale prices

having increased four-fold. “Because

gas often sets the price of electricity,

those costs have owed through both

gas and electricity bills,” said Brear-

ley. But that is not the whole story.

He also said network and system costs

have also grown as the country invests

in renewables, new infrastructure and

resilience.

“These are needed for a cleaner,

more stable and secure system but

clearly that has also added to bills. So

when we talk about affordability, we

need a whole system view. It’s not

just about generation costs; it’s about

how we design and how we operate

the system.”

While he did not go as far as to say

what the government should do, he did

say: “If government does act, the

Climate Chage Committee has said it

would be preferable that actions be

taken on the electricity price because

that would support electrication and

the transition that consumers need.”

Brearley warned, however, that

although unit costs may fall, others,

like keeping the system running and

investing in clean energy may rise over

time. He said Ofgem was therefore,

through its cost allocation review,

looking at how costs are passed

through the bill, including standing

charges, to make sure it is “fair and

transparent”.

The challenge, as is the case glob-

ally, is how to deliver the transition at

least cost. According to Aurora Ener-

gy’s research, as of 2024, UK house-

holds pay around 35p/kWh – higher

than most EU countries, and well

above the US average.

“This is not just a statistical quirk. It

is a real pressure on household -

nances and on the competitiveness of

UK industry,” said Marc Hedin, Head

of Research for Western Europe &

India at Aurora Energy Research.

Aurora’s analysis shows that all

components of the electricity bill have

risen since 2020 – wholesale, net-

works, policy costs, and more.

“There’s no single culprit. It’s not just

high gas prices, or just increasing

policy costs, it’s all of the above,”

Hedin explained.

In his keynote address, Hedin ex-

plored three scenarios for the future of

UK energy bills.

Its ‘Central (Business as Usual)’

scenario sees steady renewables

growth, rising carbon prices, and

continued electrication. Most of the

easy wins are already being targeted

here. The pace of renewable deploy-

ment is slower than current govern-

ment ambitions, but more realistic in

terms of cost and delivery.

In the ‘Back to Gas’ scenario, there

is a rapid policy shift away from de-

carbonisation. Moving back to gas is

not a “silver bullet”, according to

Hedin. Any savings versus Aurora’s

central case would only materialise

after about a decade – and even then,

they would be small. A renewables-led

system, it says, is broadly competitive

with a gas-led system.

Aurora’s ‘Cutting Costs’ scenario

assumes ambitious market reforms,

including rethinking carbon pricing

and lowering Contracts for Difference

(CfD) strike prices, while continuing

to support the deployment of renew-

ables. Aurora’s analysis shows that

bold market design reforms can de-

liver greater and quicker cost savings

than a move back to gas. Compared to

2025, enabling these policy moves

would lower electricity tariffs by 23

per cent, with the effect felt almost

immediately after implementation.

Aurora’s analysis shows that a typi-

cal household today spends around

£3100 per year on energy (electricity,

gas and car fuel), with less than £1000

of that on electricity. “The real savings

come when we electrify heating and

transport. Switching to heat pumps and

EVs removes gas and petrol bills and

takes advantage of their far higher

efciency compared to fossil fuel al-

ternatives,” Hedin explained.

Across scenarios, the total domestic

spend on energy tells a broader story.

In ‘Back to Gas’, slower electrication

keeps households reliant on gas and

petrol, resulting in higher overall en-

ergy costs. In ‘Cutting Costs’, lower

electricity tariffs and faster electrica-

tion lead to the lowest household en-

ergy spend by 2035.

The UK government has promised a

£300 reduction in energy bills by in-

vesting in clean energy sources by

2030.

in her recent budget, Chancellor of

the Exchequer Rachel Reeves at-

tempted to address the urgent issue of

energy affordability. She announced a

£150 cut to household energy bills by

removing some levies on electricity

bills into the Exchequer. But will it

deliver the much needed relief that

consumers need?

RenewableUK welcomed the Chan-

cellor’s Budget commitments to cut

energy bills, speed up the planning

system and remove hydrogen tax.

Commenting on the Chancellor’s

Budget announcements, Renewab-

leUK’s Deputy Chief Executive Jane

Cooper said: “We’re pleased to see the

Chancellor has supported our call to

drive domestic electricity bills down

by moving some energy policy costs

into general taxation. It’s fairer, as it’s

based on people’s ability to pay, so

families on low incomes will benet

most. We also welcome her moves to

make electricity cheaper for industry,

as this will reduce costs for the energy

sector’s supply chain and accelerate

electrication, both of which will, in

turn, reduce electricity costs, benet-

ting billpayers.

“The Chancellor’s commitment to

invest in measures to speed up the

planning system, including recruiting

350 extra planning ofcers in Eng-

land, is a timely intervention which

will enable us to roll out vital new

clean energy capacity signicantly

faster, strengthening the UK’s energy

security.”

Some, however, accused Reeves of

tinkering around the edges. While

shifting the burden of some energy

costs away from domestic customers,

the Chancellor at the same time axed

the Energy Company Obligation

(ECO) scheme, the UK’s biggest in-

sulation programme for households.

New taxes on EVs will also do little

to aid the shift to clean energy.

Ed Matthew, Campaigns Director at

the independent climate change think-

tank E3G said: “Cutting taxes from

electricity bills is a crucial step towards

helping people to switch to clean en-

ergy. But this is overshadowed by the

morally indefensible decision to scrap

the national home insulation scheme,

ECO. This is exactly the kind of stick-

ing plaster politics this government

promised to end and fatally under-

mines the best long-term solution to

fuel poverty.”

Energy poverty and its impact on

domestic customers was the rst point

to be addressed by Brearley at the

Aurora summit. He said: “… I’ve

talked to customers who are just

generally frustrated but I’ve talked to

some of the most vulnerable customers

who have massively struggled… The

story that sticks in my mind is a story

that was given to me by a consumer

group, of a man who preferred to stay

in hospital, simply because he was

warmer there than he was at home…

“This sector has a massive duty to

do its best for all consumers, and we

must continue to do better. That’s why

I support the energy transition we’re

on. Whatever political choices are

made, strategically it is very clear we

need to move to a different system that

manages risks in the best interest of

consumers. We need now to invest to

build out a system that is secure, af-

fordable and t for the future.”

The need to act to reduce the price

of energy is urgent, and politicians are

increasingly realising that their politi-

cal future depends on it – after all, it

is the cash-strapped consumer that

determines that future. In the UK and

many developed countries, it may not

yet quite be “Stand and deliver our

money or your life” but for consumers,

both domestic and industrial, the cost

of energy is sure beginning to feel like

daylight robbery.

Stand and deliver!

Junior Isles

Cartoon by Jem Soar