Energy Sovereignity and Energy Security

In the winter of 1973, millions of Western Europeans suddenly found themselves confronting a situation they had never imagined possible: petrol stations closed at weekends, home heating systems forcibly shut down, and the streets of major cities that had always blazed with light were plunged into an eerie darkness. The oil crisis of 1973—triggered by the Arab oil embargo against the United States, the Netherlands and their allies in retaliation for their support of Israel during the Yom Kippur War—proved one bitter truth: a nation incapable of controlling its own energy supply is a nation rendered fragile before the power of foreign interests [1].

On the other side of the globe, at roughly the same period, Indonesia was rejoicing. As a member of OPEC since 1962 and a net oil exporter, Indonesia revelled in the extraordinary surge in oil prices. State revenues soared dramatically, infrastructure projects were accelerated, and President Suharto was able to fund an ambitious development programme. Yet concealed behind this euphoria lay the seeds of vulnerability: dependence upon a single commodity, a single world price, and a policy regime that could not be guaranteed to endure [2].

These two narratives—one of panic among developed nations abruptly deprived of energy supplies, another of a developing country lulled into complacency by natural abundance — encapsulate the essence of the two concepts at the heart of this essay: energy sovereignty and energy security. Both were born of the realisation that energy is not merely an economic commodity, but the very foundation of human civilisation, an instrument of geopolitical power, and a mirror of the ideological choices a nation makes [3].

ENERGY SOVEREIGNTY AND ENERGY SECURITY:

A Multidimensional Perspective and an Overview of Indonesia

CHAPTER I DEFINITIONS AND CONCEPTUAL DISTINCTIONS

1.1 Energy Sovereignty

Energy sovereignty refers to the right and capacity of a nation—or a community—to determine its own energy policies independently, encompassing: which energy sources are used, how energy is produced and distributed, who controls energy assets, and on what principles the energy sector is organised [4]. At its core, the concept is an extension of the idea of national sovereignty into the domain of energy.

According to Scholten et al. (2020), energy sovereignty comprises four principal dimensions: (1) control over natural energy resources within national territory; (2) the ability to formulate policy decisions free from external pressure; (3) ownership of strategic energy infrastructure; and (4) the technological capacity to exploit energy resources independently [5].

In a broader context, energy sovereignty also encompasses a community dimension. The food sovereignty movement, popularised by the organisation La Via Campesina in the 1990s, inspired the concept of community energy sovereignty: the right of grassroots communities to manage energy democratically in the public interest, rather than for corporate gain [6]. This includes the right to reject energy projects detrimental to local communities—a dimension of growing relevance in the era of the renewable energy transition.

1.2 Energy Security

Energy security is a more operational and pragmatic concept. The classic definition from the International Energy Agency (IEA) describes energy security as the "availability of uninterrupted energy sources at an affordable price" [7]. This definition, though straightforward, encompasses two fundamental dimensions: the physical reliability of supply and the affordability of price.

Boersma and Johnson (2018) expanded this definition into four dimensions known as the "4As": Availability (the availability of energy resources), Accessibility (the accessibility of infrastructure), Affordability (the affordability of price), and Acceptability (social and environmental acceptability) [8]. This 4A framework demonstrates that energy security is not solely a matter of physics and economics, but also of social acceptance—a dimension of ever-increasing importance in contemporary energy debates.

A more comprehensive definition was put forward by the World Energy Council (WEC), which developed the "Energy Trilemma" framework, balancing three objectives that are frequently in tension: energy security (security of supply), energy equity (equality of access and price), and environmental sustainability [9]. The tension among these three objectives constitutes the principal challenge for energy policy formulation worldwide.

1.3 Fundamental Differences Between Energy Sovereignty and Energy Security

Although frequently used interchangeably, the two concepts are fundamentally distinct in several respects [10]:

First, normative versus technical dimensions: Energy sovereignty is a normative and political concept—it asks "who has the right to decide" and "in whose interest". Energy security is a technical and managerial concept—it asks "how to guarantee supply" without addressing the question of how power is distributed.

Second, internal versus external orientation: Energy sovereignty is inwardly oriented—it emphasises domestic autonomy over energy decisions. Energy security is outwardly oriented—it emphasises protection against external disruptions, whether geopolitical or market-driven.

Third, the collective subject: Energy sovereignty may be held by a local community, a nation, or even an individual (in the context of decentralised energy). Energy security is typically conceptualised at the level of the state or a large energy system.

Fourth, the relationship with capitalism: Energy sovereignty frequently contains a critique of the corporatisation and commodification of energy. Energy security is generally ideologically neutral — it may be achieved through market mechanisms or through state intervention alike.

CHAPTER II HISTORICAL BACKGROUND AND THE EMERGENCE OF THESE CONCEPTS

2.1 The Pre-Industrial Era: Energy as Local Power

Before the Industrial Revolution, the question of energy was essentially a local matter. Energy derived from firewood, wind, water, and animal power—all sourced from the immediate environment of communities. There was no "energy dependency" in the modern sense, as there were no long-distance distribution networks. Consequently, the modern concepts of energy sovereignty and energy security did not yet exist [11].

Nevertheless, the seeds of the problem were already present: the Roman Empire confronted a crisis of deforestation driven by its massive consumption of firewood. Mesopotamian civilisation partly collapsed as a result of soil erosion that diminished agricultural productivity — and with it, the biomass-based "energy security" of those societies [12]. This demonstrates that energy dependency and supply vulnerability are perennial problems of human civilisation.

2.2 The Industrial Revolution and the Emergence of the "Coal Question"

The British Industrial Revolution of the eighteenth century transformed energy from a local commodity into a foundation of national power. Coal became the "lifeblood" of the industrial economy, and control over coal mines became a matter of state strategy. W. Stanley Jevons, in his work "The Coal Question" (1865), was the first to pose the question of the sustainability of fossil energy supply: if Britain's coal reserves were exhausted, would the nation's prosperity collapse? [13]

Jevons's question contained a premise that was to become central to modern energy security: that the prosperity and power of a nation depends upon the continuity of its access to its principal energy source. This was the first clear formulation of what we now call energy security.

2.3 The Age of Petroleum: Twentieth-Century Energy Geopolitics

The twentieth century was the century of petroleum, and with it was born modern energy geopolitics. Winston Churchill, when he decided to convert the Royal Navy from coal to oil in 1911, articulated a dilemma of energy security that was to become classic: oil conferred operational superiority (speed and range), but created dependency upon overseas supply. "Safety and certainty in oil lie in variety and variety alone," Churchill declared—a principle of diversification that remains as relevant today as it was then [14].

The San Remo Agreement (1920) and the subsequent Sykes-Picot arrangements demonstrated how European imperial powers restructured the Middle East largely to secure access to its oil reserves. The Anglo-Persian Oil Company (the forerunner of BP) and the oil cartel subsequently known as the "Seven Sisters" dominated global oil production and distribution for several decades, representing a form of transnational energy control that challenged the sovereignty of producing nations [15].

2.4 The 1973 Oil Crisis and the Awakening of Collective Consciousness

The most dramatic episode in the history of modern energy security was the 1973 Oil Crisis. When the Organisation of Arab Petroleum Exporting Countries (OAPEC) announced an embargo against nations supporting Israel, the price of oil rose by almost 400 per cent within a matter of months [16]. The impact upon the global economy was devastating: inflation soared, economic growth stalled, and long queues at petrol stations became a symbol of the vulnerability of industrial civilisation.

The 1973 crisis had several profound historical consequences. First, it prompted the formation of the International Energy Agency (IEA) in 1974 as a collective response by OECD nations to energy pressures. Second, it triggered substantial investment in energy efficiency and the development of alternative energy sources. Third, and perhaps most significantly, it transformed energy from a technical matter into the highest-order political concern — energy security entered the strategic agendas of governments worldwide [17].

2.5 The Emergence of Energy Sovereignty: From OPEC to Popular Movements

Whereas energy security was born from the perspective of the consumer (importing nations), energy sovereignty emerged from the perspective of producers and communities. The nationalisation of the oil industry in developing countries—from Mexico (1938), Iran (1951), Libya (1969), to Saudi Arabia (1980)—represented early expressions of energy sovereignty: efforts by producing nations to reclaim control over their natural resources from the hands of transnational corporations [18].

In the early twenty-first century, the concept of energy sovereignty acquired new dimensions through social movements. Environmental activists, indigenous communities, and climate justice movements began employing the language of "sovereignty" to assert the rights of local communities over energy decisions. Reports on "Energy Sovereignty" from Food and Water Watch (2013) and the Transnational Institute (2018) formulated the concept as a democratic alternative to energy regimes controlled by large corporations [19].

CHAPTER III THEORY AND ANALYTICAL FRAMEWORKS

3.1 Dependency Theory and World-Systems Analysis

Dependency Theory, developed by Raul Prebisch, Andre Gunder Frank, and Cardoso & Faletto, provides an important framework for understanding global energy dynamics [20]. From this perspective, the relationship between industrialised nations (the "core") and developing countries (the "periphery") within the global energy system is structurally unequal: developing nations sell cheap raw fuels whilst purchasing expensive energy technology from advanced economies — an unjust exchange that perpetuates dependency.

Immanuel Wallerstein, in his World-Systems Theory, extended this analysis: the global energy system is an integral component of the world capitalist system that reproduces the hierarchy amongst nations. Control over energy resources and energy technology is one of the principal mechanisms by which the hegemonic position of core nations is maintained [21]. This perspective explains why the transition to renewable energy also has the potential to become a new arena of geopolitical competition—whoever commands the technology of solar panels, wind turbines, and batteries will determine the power hierarchy of the energy future.

3.2 Realism and Neo-Realism in Energy Security Studies

Within the Realist tradition of International Relations, energy is an instrument of state power. Nations compete to secure access to energy resources within an anarchic international system—one without a binding supranational authority. Hans Morgenthau and subsequently Kenneth Waltz constructed frameworks that explain state behaviour in the context of resource competition [22].

The most tangible application of the Realist perspective in energy policy was the Carter Doctrine (1980), which stated that the United States would employ military force to protect its interests in the Persian Gulf — including the security of oil supply. This doctrine explicitly integrated energy considerations into national security strategy, a logic subsequently adopted by many major powers [23].

3.3 Liberal Institutionalism and Interdependence

The Liberal perspective offers a contrasting view: economic interdependence, including in the domain of energy, creates incentives for co-operation rather than conflict. Robert Keohane and Joseph Nye, in "Power and Interdependence" (1977), argued that non-state actors (multinational corporations, international organisations) play a crucial role in shaping the global energy regime, and that shared interests in market stability encourage states to coordinate their behaviour [24].

The formation of the IEA, mechanisms for sharing strategic oil reserves, and various bilateral energy agreements are manifestations of this Liberal perspective. Critics of this view, however, point out that interdependence is frequently asymmetrical—creating vulnerability for the more dependent party.

3.4 Energy Transition Theory

Frank Geels developed a highly influential "Socio-Technical Transitions Theory" in the study of energy system change [25]. Within this framework, an energy transition (for example, from coal to oil, or from fossil fuels to renewables) is not merely a technological change, but a transformation of a complex socio-technical system involving infrastructure, institutions, user habits, regulation, and knowledge. The implication is that an energy transition requires systemic change, not merely technological substitution.

Germany's Energiewende ("energy transformation") is a real-world test of this theory. Germany's ambitious policy to abandon nuclear energy and fossil fuels demonstrates the extraordinary complexity of an energy transition when it collides with the realities of existing systems: ageing electricity grids, coal industry interests, concerns about costs, and social tensions in communities dependent upon the fossil fuel industry [26].

CHAPTER IV ENERGY POLICIES: INSTRUMENTS, ACTORS AND OBJECTIVES

4.1 A Typology of Energy Policies

Energy policies may be classified according to several dimensions. In terms of instruments, there are three broad categories: (1) regulatory instruments (licensing, efficiency standards, prohibitions on certain technologies); (2) economic instruments (carbon taxes, subsidies, investment incentives, feed-in tariffs); and (3) information and education instruments (energy labelling, public awareness campaigns) [27]. In terms of objectives, energy policies generally pursue three goals frequently referred to as the "energy policy trilemma": security of supply, affordability of price, and environmental sustainability.

4.2 Energy Subsidies: Concept, Typology and Controversy

Energy subsidies are among the most widely employed and simultaneously most controversial instruments of energy policy. The IMF defines energy subsidies broadly (as "post-tax subsidies") as the gap between the efficient market price plus optimal taxation and the price actually paid by consumers — a definition that encompasses not only direct price subsidies but also the failure to internalise environmental and health externalities [28].

According to an IMF report (2023), global energy subsidies reach a staggering figure: approximately USD 7 trillion per annum, or around 7 per cent of global GDP. This figure is dominated by "implicit subsidies" — the failure to internalise the costs of carbon emissions and air pollution — but explicit subsidies remain very substantial, particularly in oil-producing nations across the Middle East and Asia [29].

The typology of energy subsidies encompasses: (1) production subsidies, which support energy producers (for example, tax concessions for oil companies); (2) consumption subsidies, which suppress prices for end consumers (subsidised petrol, low electricity tariffs); (3) feed-in tariffs and premiums for renewable energy; and (4) cross-subsidies between industrial and household users [30].

Fossil fuel energy subsidies face dual criticism: from a fiscal perspective, they burden the state budget; from an environmental perspective, they distort prices and encourage excessive consumption; from an equity perspective, they frequently benefit wealthier groups (vehicle owners) more than the poor. Yet subsidy reform faces powerful political resistance because of its direct impact upon the cost of living [31].

On the other hand, subsidies for renewable energy are regarded as a legitimate instrument for correcting market failure: since the price of fossil fuels does not reflect their environmental externalities, renewables — which are socially more efficient—cannot compete on price alone. Germany's feed-in tariff, introduced in 2000 through the Erneuerbare-Energien-Gesetz (EEG), is an example of how renewable subsidies can dramatically accelerate the diffusion of solar and wind technology [32].

4.3 Strategic Reserves and Supply Diversification

One of the most direct energy security policies is the building of strategic energy reserves. The IEA requires its members to maintain oil reserves equivalent to 90 days of net imports—a "buffer" against sudden supply disruptions. The United States Strategic Petroleum Reserve (SPR), established in the aftermath of the 1973 crisis, was once the largest strategic oil reserve in the world, with a capacity of up to 727 million barrels [33].

Supply diversification is another fundamental strategy. Churchill's principle of "variety" is applied by reducing dependence upon a single source or a single transport route. The European Union, which was heavily reliant upon Russian gas before the invasion of Ukraine in 2022, has accelerated diversification through new LNG terminals, gas network interconnections between member states, and large-scale energy efficiency programmes [34].

4.4 Renewable Energy Policies and the Energy Transition

The transition to renewable energy has now become the central energy policy of many nations, driven simultaneously by two imperatives: energy security (reducing dependence upon imported fossil fuels) and climate change mitigation. The International Renewable Energy Agency (IRENA) reports that renewables have become the cheapest source of electricity in most parts of the world, opening opportunities for developing nations to build clean and self-sufficient energy systems [35].

The Paris Agreement (2015) and subsequently the Glasgow Climate Pact (2021) established an international framework that encourages national energy transitions. Yet the path to a complete transition is fraught with challenges: the substantial cost of infrastructure, the intermittency problem of solar and wind energy, the need for smart batteries and grids, and the social impact upon communities dependent upon the fossil fuel industry [36].

4.5 Actors in Energy Governance

Energy governance involves a complex and frequently contentious network of actors. At the international level, there is the IEA (representing the interests of consumer nations), OPEC+ (representing the interests of producer nations), IRENA, and UNFCCC (in the context of climate change). The tension between the IEA and OPEC reflects the fundamental asymmetry of interests that underlies the global energy system [37].

At the national level, energy ministries, state-owned energy enterprises, sector regulators, and parliaments are the principal actors of energy policy. In the neoliberal model, energy markets are liberalised, and the private sector is dominant; in the statist model, the state retains direct control through state-owned energy companies. A mixed model is the most common arrangement in practice [38].

Multinational energy corporations (ExxonMobil, Shell, BP, TotalEnergies) remain key players in the global energy system despite facing mounting transition pressures. Meanwhile, new actors such as clean energy technology companies (Tesla, Vestas, First Solar) and renewable energy communities are increasingly reshaping the balance of power in the sector [39].

CHAPTER V A MULTIDIMENSIONAL REVIEW

5.1 A Philosophical Perspective

From the perspective of political philosophy, energy sovereignty raises fundamental questions about freedom, autonomy, and justice. John Rawls, in "A Theory of Justice" (1971), argued that the principles of justice require a distribution of resources that benefits those who are least well off [40]. Applied to energy, this principle demands that energy policy ensures universal access to basic energy services—electricity, heating, cooking fuel—irrespective of economic capacity.

Amartya Sen and Martha Nussbaum, through their "Capabilities Approach", offer a highly pertinent framework: energy is not merely a commodity, but an enabler of fundamental human capabilities — health, education, mobility, and social participation [41]. "Energy poverty" from this perspective constitutes a violation of basic human capabilities, not merely an economic deficiency.

Ecological philosophy—particularly the "Deep Ecology" perspective of Arne Naess and the "Environmental Ethics" of Holmes Rolston III—challenges the extractivist paradigm that underpins the fossil-fuel-based energy system [42]. From this standpoint, energy is not merely a "resource" to be extracted and consumed, but part of the web of life that possesses intrinsic value beyond its utility to human beings. The energy transition, in this perspective, is not simply a matter of efficiency or security, but of building a more ethical relationship between humanity and the natural world.

5.2 An Ideological Perspective

Energy policy is an arena in which the great ideologies compete in concrete terms. Economic liberalism supports the liberalisation of energy markets, competition among suppliers, and the minimisation of state intervention—arguing that the price mechanism is the most efficient means of allocating energy resources [43]. Conservatism prioritises stability and security of supply, frequently supporting established national energy industries, even where that means retaining fossil fuels longer than progressives would wish.

Socialism and social democracy emphasise public control over the energy sector as a "vital interest" too important to be surrendered entirely to the market. The nationalisation of oil companies—such as Mexico's PEMEX or Venezuela's PDVSA—is the expression of this ideology in actual policy [44]. Eco-socialism—a fusion of socialism and ecology—proposes a radical transformation of the energy system as part of a broader transformation of capitalism itself.

Resource nationalism is an ideology that asserts natural resources—including energy—belong to the nation and must be controlled in the interests of the people, not of foreign corporations. The waves of nationalisation across the Middle East, Africa, and Latin America in the twentieth century were its manifestations. In the twenty-first century, "green nationalism" or "energy for sovereignty" is becoming an increasingly popular narrative in countries that seek to reduce dependence upon imported energy through the development of domestic renewables [45].

5.3 A Political Perspective

In political terms, energy is the most tangible instrument of power in international relations. The "resource curse" — or the "paradox of plenty"—the phenomenon whereby resource-rich nations tend to possess weaker democratic institutions and more volatile economic growth, demonstrates how energy wealth can distort domestic politics [46]. Michael Ross, in his study "Oil, Islam, and Women" (2008), showed a negative correlation between oil export dependence and women's representation in politics—indicating that the economic structure of energy profoundly shapes social and political structures.

At the geopolitical level, energy has become an increasingly explicit "weapon". Russia has employed natural gas as an instrument of political pressure against Ukraine and Western Europe. China uses infrastructure investment in the Belt and Road Initiative (BRI) as an instrument of influence in developing countries. The United States deploys energy sanctions against Iran, Venezuela, and Russia as instruments of international leverage [47].

The renewable energy transition is generating new geopolitical dynamics. China has positioned itself as the global leader in the manufacture of solar panels, wind turbines, and EV batteries — replicating the dominance that Western nations exercised in the oil industry during the twentieth century. Nations that possess critical mineral reserves (lithium, cobalt, nickel, copper) for clean energy technology—such as the DRC, Chile, and Indonesia—now find themselves at the centre of a new geopolitical competition [48].

5.4 An Economic Perspective

From an economic standpoint, energy is a fundamental input for virtually all productive activity. Rises in energy prices are inflationary, as they increase production costs across the supply chain. Investment in energy efficiency and the diversification of energy sources is, at its core, an investment in long-term economic resilience [49].

The concept of "energy intensity"—the amount of energy consumed per unit of GDP—is an important indicator of a country's economic efficiency. Advanced economies have succeeded in significantly reducing their energy intensity through technological efficiency improvements and a structural shift towards less energy-intensive service sectors. Developing nations, with their dominance of heavy industrial sectors, generally exhibit higher energy intensity [50].

The theories of the "green economy" and the "circular economy" offer a new paradigm: energy efficiency is not only a means of cutting costs, but of opening up new industrial opportunities and employment. The International Labour Organisation (ILO) estimates that a well-managed energy transition could create 24 million new jobs globally by 2030, surpassing the 7.7 million jobs that may be lost in the fossil fuel sector [51].

5.5 A Social and Cultural Perspective

Energy possesses social and cultural dimensions that are frequently overlooked in policy analysis. Access to modern energy is a prerequisite for full participation in contemporary society: without electricity, there is no technology-based education, no modern healthcare, and no access to the internet or information [52]. "Energy justice" is a movement that demands a fair distribution of the burdens and benefits of energy systems, including the right of vulnerable communities not to bear the negative impacts of large energy infrastructure disproportionately.

The gender dimension of energy is an area of growing attention. In many developing nations, women and girls bear the greatest burden of "energy poverty": they spend hours collecting firewood, cook in smoky kitchens that damage their health, and lose time that could be devoted to education and economic productivity [53]. Electrification and access to clean cookstoves have the greatest impact upon rural women—a fact that ought to place gender justice at the heart of energy policy.

In cultural terms, energy also shapes identity and ways of life. The "car culture" that grew alongside the oil industry in the United States is an example of how energy dependence becomes embedded in cultural identity—such that energy reform (such as restrictions on fossil-fuelled vehicles) faces resistance that is not only economic but also cultural in nature [54].

CHAPTER VI ENERGY SOVEREIGNTY AND SECURITY IN INDONESIA

6.1 Indonesia's Energy Profile: A Paradox of Wealth and Vulnerability

Indonesia is a living energy paradox. On the one hand, it is one of the world's largest producers and exporters of coal, possesses substantial natural gas reserves, holds the fourth-largest renewable energy potential in the world (estimated at 3,687 GW from various sources), and has a history as a member of OPEC [55]. On the other hand, Indonesia has been running an oil deficit since the early 2000s, depends upon fuel imports, has millions of citizens without access to electricity, and its energy system is heavily dominated by coal and fossil fuels.

Indonesia's primary energy consumption is still dominated by fossil fuels: petroleum (34%), coal (30%), and natural gas (19%), with only around 17% derived from new and renewable energy (principally geothermal and hydropower) [56]. The government's target in the National Energy General Plan (RUEN) is to achieve a 23% renewable energy mix by 2025 — a target that, according to numerous analyses, will be difficult to attain at the current pace of investment.

6.2 A History of Indonesian Energy Policy

The history of Indonesian energy policy may be divided into several phases. The first phase (1945–1965) was the era of nationalisation and the establishment of national energy institutions. Article 33 of the 1945 Constitution laid the constitutional foundation: "land and water and the natural resources contained therein shall be controlled by the state and shall be exploited for the greatest possible welfare of the people." The establishment of PERTAMINA (1971) as the state oil company was a concrete expression of the energy sovereignty mandated by the constitution [57].

The second phase (1966–1997) was the New Order era, in which the energy sector was integrated into the strategy of economic development. Oil revenues became the engine of infrastructure development, family planning programmes, and education. However, dependence upon oil revenues also created a vulnerability that proved fatal when oil prices collapsed in the 1980s and 1990s [58].

The third phase (1998–present) is the era of reform, liberalisation, and the energy transition. The Oil and Gas Law No. 22/2001 opened the oil and gas sector to foreign and private investment — a dramatic departure from the previous model. The Electricity Law No. 20/2002 sought to liberalise the electricity sector, although it was subsequently struck down by the Constitutional Court for being inconsistent with Article 33 of the 1945 Constitution. This demonstrates the fundamental constitutional tension between market-based development ideology and the energy sovereignty mandate enshrined in the constitution [59].

6.3 Indonesia's Energy Subsidies: A Fiscal and Social Dilemma

Fuel subsidies in Indonesia are among the most politically sensitive and fiscally significant of all policy issues. At their peak (2012–2014), fuel subsidies consumed up to IDR 246 trillion per annum — more than the combined budgets for education and healthcare [60]. The administration of Joko Widodo in 2014–2015 undertook a bold reform: abolishing subsidies on Premium and Solar fuels (with limited exceptions) and redirecting the fiscal savings towards infrastructure.

However, when global oil prices surged (particularly in 2021–2022 following Russia's invasion of Ukraine), energy subsidies ballooned dramatically once again. In 2022, energy subsidies and compensation reached IDR 551 trillion—a record high in the nation's history [61]. This demonstrates that sustainable fuel subsidy reform requires more than mere political courage in a single moment; it demands a structural transformation of the energy system that reduces dependence upon imported fossil fuels.

The debate over energy subsidies in Indonesia is a debate about deeper values: social justice (is cheap energy a right of the citizenry?), economic efficiency (do subsidies distort resource allocation?), and energy sovereignty (do subsidies fund the consumption of imports or encourage domestic production?). There are no easy answers—which is precisely why the issue continues to provoke fierce debate in every budget cycle [62].

6.4 The Challenges of Indonesia's Energy Transition

Indonesia faces unique and complex challenges in its energy transition. First, economic dependence upon coal runs very deep: Indonesia is the world's largest coal exporter, and revenues from coal exports reached USD 47 billion in 2022—a contribution that cannot be relinquished without a well-considered substitution strategy [63].

Second, the geographical challenges Indonesia faces as an archipelago nation make the equalisation of energy access extremely costly. PLN (the state electricity company) must serve more than 17,000 islands under widely varying geographical conditions — from densely populated metropolitan cities to remote villages in the interior of Papua. A nationally integrated transmission network is prohibitively expensive to construct, with the result that Indonesia's electricity system remains highly fragmented between islands [64].

Third, Indonesia possesses extraordinary renewable energy potential that has yet to be optimally exploited. Indonesia's geothermal potential is the largest in the world (accounting for 40% of global reserves), yet only around 9% has been developed. Solar potential reaches 207 GWp, wind 60 GW, hydropower 75 GW, and biomass is abundant — none of which has been significantly exploited due to various regulatory, financial, and infrastructure barriers [65].

In a global context, Indonesia faces a dual pressure: pressure from developed nations to abandon coal more swiftly (through the Just Energy Transition Partnership/JETP, valued at USD 20 billion and pledged at COP26), whilst maintaining access to affordable energy that is needed for economic development and poverty reduction. This tension reflects a structural injustice in the global energy transition: developing nations are asked to bear the costs of a transition that is, in fact, the consequence of the historical emissions of the advanced economies [66].

6.5 Energy Sovereignty and Article 33 of the 1945 Constitution

The constitutional basis of Indonesia's energy sovereignty is Article 33 of the 1945 Constitution, which mandates state control over natural resources for the welfare of the people. The Constitutional Court, through its various rulings, has clarified that "controlled by the state" does not necessarily mean direct ownership, but that the state must maintain "effective control" through a range of mechanisms — regulation, licensing, oversight, and shareholding [67].

The debate over the meaning of Article 33 in the context of the energy sector is an ideological debate that remains unresolved. At one pole, resource nationalists argue that PERTAMINA, PLN, and other state-owned energy enterprises must dominate the energy sector to guarantee sovereignty and benefits for the people. At the other pole, liberals argue that the efficiency and investment required can only come from market competition that attracts domestic and foreign private capital [68].

In practice, Indonesia follows a middle path that is not always consistent: PERTAMINA and PLN remain dominant but are opened to private partnerships; energy prices are subsidised but not fully; the upstream oil and gas sector is opened to International Oil Companies (IOCs) but with increasingly stringent terms. This middle path reflects the political reality of post-reform Indonesia: no single ideology is sufficiently dominant to impose a unilateral solution [69].

CHAPTER VII SYNTHESIS AND PROJECTIONS

7.1 Energy at a Historical Crossroads

We are living through a rare moment in history: a fundamental transition of the global energy system. The combination of three great pressures—climate change that poses an existential threat, the dramatic fall in the cost of renewable energy, and the geopolitical volatility accelerated by the Russia-Ukraine war—is driving the transformation of energy systems at a pace without precedent [72].

In this context, energy sovereignty and energy security are no longer merely academic concepts—they are strategic imperatives. Nations that succeed in building energy sovereignty grounded in domestic renewable resources will hold a dual strategic advantage: independence from the volatility of global fossil fuel markets, and a stronger position in the post-fossil geopolitical order that is now taking shape.

7.2 An Agenda for Indonesia

For Indonesia, the policy recommendations that emerge from this study span several dimensions. First, energy subsidy reform must continue, but be accompanied by adequate social protection for vulnerable groups—ensuring that the reallocation of subsidies does not become a burden on poor households. Second, large-scale investment in renewable energy infrastructure is necessary, with a focus on geothermal energy (Indonesia's unique comparative advantage), rooftop solar, and mini-grids for remote areas [73].

Third, the development of a domestic renewable energy manufacturing industry—solar panels, wind turbines, batteries, EV components—must become an industrial priority to ensure that the energy transition also creates domestic value added, rather than merely replacing imported fuel with imported solar panels. Fourth, reform of energy sector governance that increases transparency, accountability, and public participation—particularly for communities affected by large energy projects [74].

Fifth, and perhaps most fundamentally, Indonesia needs to build a national consensus on the long-term vision for its energy system. The debate between "coal for development" and "renewables for sustainability" will not be resolved without a shared vision that transcends the electoral cycle. This requires an inclusive national dialogue, engaging not only the government and corporations, but also local communities, academics, and civil society [75].

CONCLUSION

Energy sovereignty and energy security are two concepts that complement one another without being identical: the former addresses the question of power and the right to make energy decisions, the latter the reliability and continuity of supply. Both were born of historical experience that demonstrated how fragile societies and nations become when they do not command their own energy destiny.

From a philosophical perspective, both concepts challenge us to reconsider the relationship between humanity, technology, power, and nature. From an ideological perspective, they reflect the unresolved tensions between state and market, nationalism and globalisation, development and sustainability. From a political perspective, they remind us that energy is power—and that the distribution of energy power is the distribution of power itself. From an economic perspective, they affirm that investment in energy independence is investment in long-term resilience. From a social and cultural perspective, they remind us that behind every energy policy lies a choice about the kind of society we wish to build.

Indonesia, with its unique paradox of resource wealth and structural vulnerability, stands at a decisive crossroads. The choices made in this decade—regarding coal, subsidies, investment in renewables, and the governance of the energy sector—will determine not only the nation's energy security, but also the character of the civilisation it is building. It is hoped that those choices are made with the wisdom to transcend short-term interests, and with a vision of an Indonesia that is sovereign, prosperous, and sustainable.

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