INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Serafina Muryanti, Adya Sepasthika and Kenny Poltak, ABNR Counsellors at Law
photovoltaic (PV), wind and bioenergy. In 2025, Indo- nesia recorded significant growth in renewable energy development, with the total installed renewable energy capacity reaching 15,630 MW, reflecting an increase from 14,877 MW in 2024. The additional renewable energy capacity installed in 2025 was reported as the largest increase in the past five years. As of December 2025, the renewable energy gen- eration mix consisted primarily of hydropower (7,587 MW), followed by bioenergy (3,148 MW), geothermal (2,744 MW), solar PV (1,494 MW), wind (152 MW), waste-to-energy (36 MW) and other renewable sourc- es (18 MW). In addition, coal gasification projects con- tributed 450 MW. Indonesia’s renewable energy share in the national energy mix increased to 15.75% in 2025, improving from the 2024 level. Meanwhile, the country’s total installed power generation capacity reached 107.51 GW in 2025, following an increase of approximately 7 GW from the previous year. Nevertheless, Indonesia’s power generation mix continues to be dominated by conventional energy sources, particularly coal and natural gas, although the government continues to accelerate renewable energy development through various regulatory reforms and implementation of projects under the national electricity supply busi- ness plan ( Rencana Usaha Penyediaan Tenaga Listrik – RUPTL). 2.4 Market Concentration Limits There is no regulation regarding market concentration limits. However, the electricity market in Indonesia is generally controlled by the government, with PLN as the SOE being given the mandate (and thus priority) to ensure the supply of electricity meets the public requirement. Consequently, the electricity market is monopolised and, to a certain extent, controlled by PLN. 2.5 Surveillance to Detect Anti-Competitive Behaviour Although private-owned companies are allowed to participate in the power market in Indonesia, the mar- ket itself is heavily regulated by the government and thus is not as free or competitive as in other jurisdic- tions. Market surveillance in Indonesia is conducted
by the Indonesia Competition Commission ( Komisi Pengawas Persaingan Usaha – KPPU). The KPPU’s powers include conducting assessments of the activities and/or actions of businesses that may result in monopolistic practices and/or unfair business competition, conducting investigations or examina- tions of cases of alleged monopolistic practices and/ or unfair business competition and conducting inter- views for the purpose of obtaining evidence. The KPPU also has the authority to impose administrative sanctions on business actors that violate anti-com- petition law or engage in anti-competitive behaviour. 3. Generation Facilities 3.1 Constructing and Operating Generation Facilities The construction of generation facilities is subject to the Electricity Law, the “Construction Law” (Law No 2 of 2017 as amended by Law 6/2023) and the imple- menting regulations – ie, Government Regulation No 25 of 2021 on the Implementation of Energy and Min- eral Sector, Government Regulation No 62 of 2012 on the Electricity Supporting Services Business and Government Regulation No 22 of 2020 on Construc- tion Services as amended by Government Regulation 14 of 2021. The operation of generation facilities is subject to the Electricity Law and the implementing regulation – ie, Government Regulation No 62 of 2012 on the Electricity Supporting Services Business. To construct generation facilities, the contractor must have (i) a business entity certificate from the Ministry of Public Works and the MEMR and (ii) an electricity- supporting business licence. If the generation facilities are operated by a third-party operations and mainte- nance (O&M) contractor or company instead of the IPP/asset owner, the O&M contractor must have (i) an electricity-supporting business licence and (ii) a business entity certificate. 3.2 Obtaining Approvals to Construct and Operate Generation Facilities In addition to the licences associated with the con- struction contractor, to construct a generation facil-
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