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The Government of Indonesia has a substantial potential for development of renewable energy resources, and particularly in rural areas of the country that have not been electrified. The government policy is therefore to achieve the goal of rural electrification based on the utilization of renewable energy resources. This policy is considered cost efficient, it achieves the goals of energy diversification, it is consistent with the national environmental policies of sustainable development, and it promotes greater community participation in the management of their basic services.Indonesian palm oil production is the first largest in the world and the second place is Malaysia. With total planted area of over 6.074 million ha, the annual production of crude palm oil in 2006 was 13.39 million tons processed in 340 palm oil mills (POMs). New POMs are being planned to meet milling shortages. The number of POMs and volume of fresh fruit bunches (FFB) being processed gives rise to large quantities of solid and liquid waste. When properly managed the wastes can be a viable energy source, providing a sustainable economic benefit while managing the adverse environmental impacts typically associated with POMs. and other opportunities for renewable energy (RE) projects utilizing POM waste.The long term sustainability of the waste management and energy capture projects from the POM has immense potential to become the backbone of rural electrification initiatives in Indonesia. The high cost of rural electricity production which is normally isolated systems with diesel generators can be displaced using excess power from the POM. The implementation of such widespread rural electrification initiatives requires some support in the initial stages, particularly to prove the technical, commercial and economic viability to the investing organizations and to prepare the guidelines to effectively tap the inherent potential on a nationwide basis.The waste management and energy capture initiatives have good long term potential for Indonesia. Loan assistance to realize the application of the technology and adoption of the country-wide commercialization strategies may be necessary. Implementation support for the development of practical integration guidelines for incorporation of POM waste management and energy capture as part of the provincial energy services to encourage the sustainability aspect of the initiatives identified.
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