Community-Driven Energy Transition in Bali Advances Through Renewable Energy Village Pilot

Indonesia’s energy transition is often discussed in terms of large-scale power plants, national policy reforms, and international finance. However, a pilot project in Bali shows that locally driven initiatives can play a significant role in expanding renewable energy access while strengthening community resilience. The Renewable Energy-Based Village Pilot Project, supported by the Institute for Essential Services Reform (IESR), illustrates how decentralised clean energy systems can be designed around local needs, governance structures, and economic realities.

The project was implemented in two villages in Bali to demonstrate a community-centred model for renewable energy development. Rather than focusing solely on technology deployment, the initiative integrates social engagement, capacity building, and local economic planning into the energy transition process. This approach aligns with Indonesia’s broader objective of increasing the share of renewable energy in its national energy mix while ensuring that the transition delivers tangible benefits at the local level.

Addressing Local Energy Challenges

Many rural and semi-rural communities in Indonesia face persistent energy challenges, including high electricity costs, dependence on fossil fuel-based power, and limited grid reliability. In Bali, these issues are compounded by the island’s strong reliance on tourism, which drives fluctuating energy demand and exposes communities to economic shocks, as seen during the COVID-19 pandemic.

The Renewable Energy-Based Village pilot addresses these challenges by deploying small-scale renewable energy systems, primarily solar photovoltaic installations, that are adapted to local conditions. The systems are designed to reduce dependence on external energy supplies, lower household and community energy costs, and provide a more stable electricity supply for essential services and small businesses.

According to IESR, the technical design of the systems was informed by detailed assessments of local energy demand, available renewable resources, and existing infrastructure. This data-driven approach helps ensure that the installations are appropriately sized and economically viable, reducing the risk of underperformance or financial strain on the community.

Community Participation as a Core Principle

A defining feature of the pilot project is its emphasis on community participation throughout the planning and implementation process. Residents, village leaders, and community organisations were involved in identifying priorities, selecting system locations, and defining governance arrangements for the renewable energy assets.

This participatory model serves several purposes. First, it helps build local ownership of the project, increasing the likelihood that systems will be properly maintained and used effectively over the long term. Second, it strengthens local capacity by providing training on basic system operation, energy management, and financial planning. Third, it ensures that the benefits of the project are distributed in a way that reflects local social and economic conditions.

IESR notes that community engagement also plays a critical role in addressing non-technical barriers to renewable energy deployment, such as limited awareness, institutional constraints, and concerns about costs. By involving stakeholders early and consistently, the project reduces resistance to change and builds trust in renewable energy solutions.

Economic and Social Impacts

Beyond energy supply, the Renewable Energy-Based Village pilot aims to support local economic development. Lower energy costs can improve the competitiveness of small enterprises, such as food processing, handicrafts, and local services. More reliable electricity also enables the use of digital tools, cold storage, and other technologies that can add value to local products.

In Bali’s context, the project also explores links between renewable energy and sustainable tourism. Clean energy systems can reduce the environmental footprint of community-based tourism initiatives, which are increasingly important as visitors seek destinations aligned with sustainability principles. This creates potential for renewable energy to support income diversification while reinforcing Bali’s environmental reputation.

Socially, improved energy access contributes to better public services, including lighting for communal spaces, power for health facilities, and connectivity for education and communication. These benefits are particularly important for remote or underserved communities, where energy access can be a limiting factor for development.

Policy Relevance and Scalability

The pilot project provides practical insights for policymakers at both the regional and national levels. Indonesia has set ambitious renewable energy targets, including increasing the share of renewables in the national energy mix and achieving net-zero emissions by 2060 or earlier. Achieving these goals will require not only utility-scale projects but also widespread deployment of decentralised systems.

IESR highlights that the Renewable Energy-Based Village model can be replicated in other regions, particularly in islands and rural areas where grid extension is costly or impractical. Key enabling factors include supportive local regulations, access to financing, and coordination between national agencies, local governments, and community institutions.

The project also underscores the importance of aligning energy policy with community development objectives. When renewable energy is framed as a tool for economic resilience and social well-being, rather than solely as a climate mitigation measure, it can gain broader public and political support.

Implications for Stakeholders

For governments, the Bali pilot demonstrates the value of integrating community engagement into renewable energy programmes. For investors and developers, it highlights opportunities in small-scale, distributed energy systems that prioritise long-term social and economic returns alongside financial performance. For civil society organisations, the project offers a framework for facilitating local participation and capacity building in energy transitions.

As Indonesia continues to navigate the complexities of decarbonisation, initiatives such as the Renewable Energy-Based Village pilot show that community-driven approaches can complement national strategies. By grounding the energy transition in local realities, these models help ensure that progress towards net-zero is inclusive, resilient, and sustainable.

Source: iesr.or.id