Indonesia Renewable Energy Policy Handbook 2022 Update

Pages: 18 Published: June 24, 2022 Report Code: GDAE1502P

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The government of Indonesia aims to achieve net zero emissions by 2060. The Indonesia renewable energy policy handbook offers comprehensive information on major policies governing the renewable energy market in the country. The report also discusses renewable energy targets and plans along with the present policy framework, giving a fair idea of the overall growth potential of the renewable energy industry. Moreover, the report provides major technology-specific policies and incentives provided in the country.

Indonesia Renewable Energy Market Dynamics

The Ministry of Energy and Mineral Resources (Kementerian Energi dan Sumber daya Mineral, MEMR) is the chief regulator of the electricity sector. It is responsible for the legislation, implementation, coordination, enforcement, and compliance of the electricity sector. Perusahaan Listrik Negara (PLN), a state-owned utility, is the dominant company in the power sector. The company owns most of Indonesia’s power-generating capacity through its subsidiaries and maintains a monopoly over transmission and distribution activities. The remaining portion is owned by the private sector through independent power producers (IPP), whose contribution is likely to increase as new private power projects come online over the next few years.

Electricity Law No. 20 of 2002 allowed for greater private participation in the electricity sector and introduced an independent market regulator through the establishment of the Electricity Market Supervisory Agency (EMSA). The constitutional court revoked this law in 2004 when the provisions for a competitive electricity market and the unbundling of PLN were deemed unconstitutional. At the same time, Electricity Law No. 15 was re-instated, which allowed limited private participation. This contributed to preventing the further introduction of competition and independent regulatory measures in the electricity market.

Major Policies & Incentives in the Indonesia Renewable Energy Market

Some of the major policies & incentives in the Indonesia renewable energy market are National Energy Policy, New Tariff Regime for Renewables, Indonesia Electricity Supply Plan (RUPTL), New Geothermal Law, Geothermal Fund, and Biofuel Consumption Mandates.

National Energy Policy: The National Energy council introduced a national energy policy in 2014 which replaced the previous version that was published in 2006. The current regulation is established by President Regulation No. 22 in the year 2017 on National Energy Planning (RUEN) which provides an overall direction of national energy management to achieve energy independence and energy security to support the country’s sustainable development.

New Tariff Regime for Renewables: The Indonesian government has introduced a new tariff regime for renewable energies. MEMR Regulation 50/2017 provides a new mechanism to determine the tariff for electricity generated by renewable energy power plants and purchased by PLN from IPP. As per the new scheme, the tariff is determined by benchmarking against the applicable BPP (cost of generation (Indonesian acronym)) in the area where the power is generated or through negotiations between PLN and the IPP.

Biofuel Consumption Mandates: Indonesia’s biodiesel industry grew rapidly in 2018 with expanding domestic demand fueled by aggressive domestic mandates and sharply higher demand from overseas markets. A biofuel blending mandate was created in 2008 through MEMR Regulation 32. The blending mandate was most recently revised through MEMR Regulation 12, released in March 2015. MEMR regulation 12/2015 established biofuel-blending targets for transportation, industry, and power generation sectors.

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Indonesia Renewable Energy Market Report Overview

Major Policies & Incentives National Energy Policy, New Tariff Regime for Renewables, Indonesia Electricity Supply Plan (RUPTL), New Geothermal Law, Geothermal Fund, and Biofuel Consumption Mandates

Scope

  • The report covers policy measures and incentives used by Indonesia to promote renewable energy.
  • The report details promotional measures in Indonesia both for the overall renewable energy industry and for specific renewable energy technologies that have potential in the country.

Reasons to Buy

The report will enhance your decision-making capability in a more rapid and time-sensitive manner. It will allow you to:

  • Develop business strategies with the help of specific insights about policy decisions being taken for different renewable energy sources.
  • Identify opportunities and challenges in exploiting various renewable technologies.
  • Compare the level of support provided to different renewable energy technologies in the country.
  • Be ahead of the competition by keeping yourself abreast of all the latest policy changes.

Table of Contents

Table of Contents

1. Indonesia Power Market, Regulatory Scenario

1.1 Renewable Energy Market, Overview

1.2 National Energy Policy

1.3 New Tariff Regime for Renewables

1.4 Indonesia Electricity Supply Plan (RUPTL), 2021–2030

1.5 Revocation of 32 regulations in the Energy and Minerals Sector in 2018

1.6 Other Electricity Sector Regulations

– Ministerial Decree number 10/2017 (MEMR 10/2017)

– Ministerial Decree number 11/2017 (MEMR 11/2017)

1.7 Net-metering scheme

1.8 Value-Added Tax and Import Duty Exemption for Renewable Energy Property

1.9 New Geothermal Law

– Auctions for Geothermal Working Areas (WKP)

1.10 Geothermal Fund

1.11 Biofuel Consumption Mandates

1.12 Other Fiscal Incentives

– Tax Allowance

– Tax Holiday

2. Appendix

2.1 Abbreviations

2.2 Market Definitions

– Power

– Renewable Power

– Installed Capacity

– Electricity Generation

– Electricity Consumption

2.3 Methodology

– Coverage

– Secondary Research

– Primary Research

– Modelling and Forecasting

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List of Tables

Table 1: Specific renewable tariffs and method of appointment, Indonesia

Table 2: Planned Capacity Additions (in MW), RUPTL, Indonesia, 2021-2030

Table 3: Current biodiesel consumption mandate, Indonesia

Table 4: Abbreviations

Frequently Asked Questions

Some of the major policies & incentives in the Indonesia renewable energy market are National Energy Policy, New Tariff Regime for Renewables, Indonesia Electricity Supply Plan (RUPTL), New Geothermal Law, Geothermal Fund, and Biofuel Consumption Mandates.

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