Renewable Energy Regulations: Not Quite the Expectation

The previous release regulations from Ministry of Energy and Mineral Resources (EMR) number 10, 11, and 12, earlier this year had took everybody by surprise due the major changes in renewable energy regulations. Energy communities were reacted to the regulations in written; include Eurocham who sent response letter to emphasize the potential impact of regulation to investment.

In response to such massive objection the government makes amendment to those regulations:

• EMR Ministerial Regulation No. 49/2017 refined the rule 10/2017 on the Principles of the Power Sale and Purchase Agreement.
• EMR Ministerial Regulation No. 45/2017 revise the rule 11/2017 on Utilization of Natural Gas for Power Plant
• EMR Ministerial Regulation No. 50/2017 was second revision of rules 12/2017 on Utilization of Renewable Energy Sources for Power Supply, which regulates additional provisions on marine hydroelectric power and the provisions that the purchase of electricity from renewable energy generation is only done through direct appointment mechanism. This regulation also changes the purchase price of electricity from solar photovoltaic, geothermal, biomass and biogas power plants in the case of local BPP averagely is equal to or below the national BPP, the benchmark price of purchase is determined based on the agreement of the parties.

Directorate General Electricity held Morning Coffee session as a part of socialization those regulations with the relevant stakeholders. Despite the high attendance and interest on the socialization, some participants consider that the changes are not yet suffice to meet the expectation. The ceiling price reference to BPP is still there, but on the light side, now it enable to have B-to-B negotiation in area where local BPP is much lower than National BPP, as such in Java-Bali area.

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