Indonesia to include power wheeling in renewable energy bill

One of the efforts to develop new renewable energy is through the use of solar panels in Pertamina’s operational areas, as seen at the refinery in Cilacap, Central Java. (Photo: Pertamina)

Director General of the Ministry of Energy and Mineral Resources' New Renewable Energy and Energy Conservation Eniya Listiani Dewi said on July 4 that the ministry was in the process of formulating the rules on pricing and terms and conditions of using PLN transmission to distribute renewable electricity.

The government removed articles on power wheeling from the bill in November 2022, but later revived the plan in the following year.

Current regulations require that electricity produced by independent power producers (IPPs) be sold to PLN for distribution under a state-run monopoly, including provisions that limit the economic feasibility of clean energy projects.

Businesses have called for this provision to be included in the bill, but some ministries in President Joko Widodo's administration still do not want to accept it.

The Ministry of Finance believes that this mechanism can cause electricity prices to fluctuate due to market impacts, thereby making people unable to pay. Others worry that PLN could suffer losses when electricity supply exceeds demand.

According to Minister of Energy and Minerals Arifin Tasrif, it will be difficult for Indonesia to achieve its renewable electricity goals if it only depends on a single supplier – PLN, he said, noting that the opening of this industry will encourage independent power producers to produce renewable energy, which can help accelerate the adoption of clean energy in Indonesia./.