JURNAL SOSIAL EKONOMI PEMBANGUNAN Tahun I, No.1 November 2010 - 1 - Seizing the Potential of Renewable Energy In Indonesia Ando Fahda Aulia Department of Economics, Faculty of Economics, University of Riau Kampus Bina Widya Jl. HR Subrantas KM. 12.5, Tampan, Pekanbaru, Riau ABSTRACT The high dependency on fossil fuels, such as oil and coal, in fulfilling Indonesia’s energy consumption, has made Indonesia become a net oil importer country. Moreover, the recent global trend intends to lower the environmental impact due to carbon energy. In order to meet energy sustainability, these concerns have to be reduced through developing alternative sources of energy. Having renewable energy is currently considered as one strategy for Indonesia to meet its rapid economic growth. This paper endeavours to seek the possibility of the implementation of renewable energy in Indonesia. This article is going to argue that renewable energy could substitute the use of fossil fuels in two main ways, namely the economic factor and environmental issue. This essay will examine the reasonable concerns, which might encourage the utilization of renewable energy as well as its barriers. Eventually, the paper will propose policy recommendation regarding the establishment of green energy in Indonesia. Key word : renewable energy