New Regulation for Indonesia's PV Policy
Indonesia’s solar photovoltaic ('PV') industry has welcomed the long-awaited Ministry of Energy and Mineral Resources ('ESDM') Regulation No. 19 of 2016 (the 'Regulation'), which introduces a new first-come, first-served ('FCFS') capacity quota offering process following the revocation of ESDM Regulation No. 17 of 2013 (the 'Original Regulation') by the Supreme Court.
Under the Regulation, PLN must deliver a revised model PPA to ESDM through EBTKE (defined below) by 24 August 2016, which will comprise an extendable 20-year term from the commercial operation date. Feed-in tariffs ('FiTs'), including power transmission line connections fees, will be established under the FCFS process and paid in Indonesian Rupiah using JISDOR.
Not entirely clear cut, local content requirements appear to be defined by reference to existing Ministry of Industry regulations for electricity infrastructure. This is in contrast to the Original Regulation, which contemplated that olar developers and investors ('SDIs') do not necessarily need to comply. For communal or centralised solar power plants (which is undefined), the existing regulations require 43.85% local content for combined goods and services. Failure to meet these requirements may result in FiT reductions or other penalties.
1. New Government Regulation
PERMEN ESDM No. 19 / 2016
Indonesia Solar IPP Tariff Review
ID ABB, Business Development Specialist, Solar PV – Budi Supomo, October 2016
29. 25 October
2016 | Slide 29
(Source: PLN RUPTL 2012 - 2022)
Indonesia Solar IPP Market Analysis
Players: PLN Organization Structures
30. Indonesia Solar IPP Market Analysis
Players: Ministry of Energy& Mineral Resources Org. Structure
25 October
2016
| Slide 30
Immediate responsibility for Indonesia’s energy policy lies with
the Ministry of Energy and Mineral Resources (MEMR).
. DGE&EU electricity sector functions
are still a mix of policy and
regulation. The Electricity Law No.
20/2002 proposed to establish a
partly independent regulatory
authority and required that “the”.
Regulating Board shall make
decisions independently
and make a transparent clarification
regarding all of the considerations in
its decision-making
The Directorate General of Electricity
and Energy Utilization (DGE&EU) is
primarily responsible for electricity
sector policy and for its regulation. The
distinction in these different
responsibilities is not clearly reflected
in the structure of the Directorate
General.
The Directorate General is divided into
three electricity focused Directorates,
namely Electricity Program
Supervision, Electricity Business
Supervision, and Electricity Technology
and Environment. It also has a
Directorate of New and Renewable
Energy and Energy Conservation
(Source: IEA report 2008)