INDONESIA Trends and Developments Contributed by: Emir Nurmansyah, Serafina (Fina) Muryanti and Adya Sepasthika, ABNR Counsellors at Law
PLN’s Long-Term Electricity Supply Business Plan 2025 – Renewable Energy as the Priority In recent years, a national regulatory frame- work has been put in place by the government to accelerate Indonesia’s energy transition by developing renewable energy and reducing the use of coal-fired power plants (CFPPs). This is to be achieved by providing a mandate to PT Perusahaan Listrik Negara (PLN, a state-owned company or Persero ) to (i) accelerate the decom- missioning of its CFPPs and those owned by independent power producers (IPPs), with early termination of power-purchase agreements (PPAs), and (ii) restrict the development of new CFPPs, except those that have been identified in the PLN’s Long-Term Electricity Supply Busi- ness Plan ( Rencana Usaha Penyediaan Tenaga Listrik – RUPTL). In 2025, the government, together with PLN, have taken a further step with the latter’s latest Long-Term Electricity Supply Business Plan (the “2025 RUPTL”), which emphasises renewable energy by increasing the proportion of new and renewable energy power plants in the energy mix to 76%. The proportion of fossil fuel power plants is thus capped at 24%, and this will likely cover fossil fuel power projects that were includ- ed in the previous RUPTL and those already in the process of being procured. The 2025 RUPTL also covers the development of nuclear power plants with a total capacity of 0.5 GW in Sumatera and Kalimantan, and the development of energy storage from battery and pumped-storage hydropower plants with a capacity of up to 10.3 GW, to enhance the renewable energy capacity. The government, in a press release, also stated that 73% of the new power generation will be allocated to IPPs, thus providing significant potential for new invest- ment in the upcoming years.
On a related note, the Minister of Energy and Mineral Resources (MEMR) issued Regulation No 10 of 2025 on the Roadmap for Energy Tran- sition in the Electricity Sector (MEMR 10/2025), which outlines the government’s commitment to reduce reliance on fossil fuels and increase the use of new and renewable energy sources. MEMR 10/2025 sets outs, among other things: • the criteria and procedure for selecting CFPPs for early or accelerated retirement; and • energy transition programmes in the electric- ity sector, such as retrofitting fossil fuel power plants, limiting new CFPPs, accelerating the decommissioning of existing CFPPs and the development of new and renewable energy power plants, and developing smart grid systems. New regulation on power project agreements (PPAs) for renewable energy In support of the development of renewable energy power plants, the Minister of Energy and Mineral Resources also issued Regulation No 5 of 2025 on the Guidelines for PPA from Pow- er Plants Utilizing Renewable Energy Sources (MEMR 5/2025). While not perfect, MEMR 5/2025 generally fos- ters a more favourable environment for renew - able energy development by incorporating provi- sions such as: • a maximum performance security of 10% of the cost of the power plant; • rights concerning environmental attributes; and • the ability for the parties to agree on the pre- vailing language, including English, if the PPA is in English and Bahasa Indonesia .
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