Powering the Future: Advancing Green Data Centers in Indonesia

February 28, 2026

Indonesia’s digital economy is expanding rapidly, driven by advances in artificial intelligence (AI) and rising demand for digital infrastructure. The World Bank projects that Indonesia’s data center capacity will grow by 16.8 percent annually through 2029, reaching 1.41 gigawatts (GW). While this growth strengthens Indonesia’s digital transformation, it also significantly increases electricity consumption, highlighting the urgency of developing energy-efficient and low-carbon data centers.

Despite having Southeast Asia’s largest digital economy—valued at around US$90 billion in 2024—Indonesia’s data center capacity remains relatively small at approximately 456 MW, lagging behind Singapore (1.4 GW) and Malaysia (1.3 GW). Stronger regulatory clarity, investor incentives, and sustainability frameworks in these countries have attracted hyperscale investments, while Indonesia’s data center readiness remains comparatively limited.

This project assesses Indonesia’s readiness to develop green data centers and identifies key policy gaps. Currently, Indonesia lacks a comprehensive framework specifically governing green data center development. In addition, although Indonesia has vast renewable energy potential—estimated at 3,686 GW—access remains constrained due to limited grid infrastructure and financing mechanisms.

At present, the Renewable Energy Certificate (REC) scheme offered by PT PLN provides the most practical option for sourcing renewable electricity. However, many global operators prefer direct renewable energy procurement to ensure transparency and credibility.

To attract green data center investment, Indonesia must strengthen digital sector regulations, develop digital talent, and accelerate power sector reform. Increasing renewable energy integration and improving grid flexibility will be critical to positioning Indonesia as a competitive and sustainable data center hub in the region.