New Regulations for Renewable Energy in Indonesia

November 2020

The Indonesian government is preparing a new regulation on renewable energy pricing to encourage more investment in renewables. According to official statistics, Indonesia has over 400 GW of potential renewable energy capacity from hydropower, solar, and geothermal, but only around 2.5% has been utilized. The South East Asian nation has set out to achieve 23% renewable energy use by 2025 and 31% by 2050.

According to Harris Yahya, who heads the Directorate General of Renewable Energy, the new regulation would include simpler pricing norms, new incentives, and a feed-in tariff system for certain projects. Power producers won’t have to negotiate pricing with the sole off-taker state power company PT Perusahaan Listrik Negara (PLN).

Resonating with the Government’s emphasis on renewables, Pertamina, the biggest oil and gas company in Indonesia, is taking action. Besides building and revitalizing refineries, it has also developed oil palm-based biorefineries that convert biomass into energy.

In July 2019, this state-owned oil and gas company was successful in the testing of Green Diesel D100 production of 1,000 barrels per day at the Dumai Refinery in Riau. The production of D100 uses 100% raw palm oil and will absorb at least 1 million tons of palm oil produced by farmers per day. The process of turning palm oil into green gasoline by Pertamina is the first at an operational level. In the past, this was only done in the laboratories for research purposes.

(Sources: The Jakarta Post; Reuters; Mercom India)

Our Services

Orissa International provides consulting services to companies that want to develop a market entry strategy for Southeast Asia or implement their business expansion into the region. We have very strong domain knowledge of markets and industry sectors, and a business network of over 16,000 distributors, resellers, and system integrators, built through advising and guiding more than 5,000 companies with their market expansion into Singapore, Malaysia, Indonesia, Thailand, Vietnam and the Philippines over the last 25 years.