3. Regulatory framework

Indonesia’s energy policy environment has transformed greatly since 2007, when Energy Law No. 30/20071 set forth the legal foundation and institutional structure for energy management. Since then, the government has implemented a number of regulatory changes to encourage and promote energy efficiency and renewable energy development, in line with the vision set forth in the country’s National Energy Policy (KEN), adopted by parliament under Government Regulation No. 79/20142, and Indonesia’s National Energy Plan (RUEN), set forth in Presidential Regulation No. 22/20173 (see Chapter 2).

These actions, complemented by a number of energy efficiency and renewable energy policies and regulations, are steps in the right direction, affirming Indonesia’s resolve to turn its clean energy ambitions into legal commitments using market rules and regulations. Strengthening these reforms, for example through measures to facilitate business development in the new Omnibus Law (see Chapter 4), will help to ensure Indonesia’s regulatory framework addresses remaining policy gaps and market barriers in order to enable a vibrant and robust investment environment for clean energy development.

The government is to be commended for signalling from the highest political offices that clean energy is an important part of Indonesia’s future. The evolution of regulations in support of energy efficiency and renewable energy over the last decade is a positive step towards those ambitions, and developments such as the country’s first energy performance standards alongside the expected presidential regulation on renewable energy are important milestones denoting Indonesia’s commitment to accelerate clean energy deployment. Still, Indonesia has had many revisions in rules and regulations that govern renewable energy and energy efficiency, some of which have caused uncertainty for project developers and investors. Achieving wide-spread uptake of clean energy solutions will thus require further evolution in Indonesia’s regulatory environment (as well as improved co-ordination [see Chapter 2]), building upon what has worked and addressing shortcomings in existing policies.

Regulations have helped create some demand for energy-efficient products and services in recent years, but there are still important gaps in policies, including low public awareness about minimum energy performance standards (MEPS) and energy labels (CLASP, 2020[1]; MEMR, 2020[2]). Air conditioner (AC) and lighting energy performance standards have not been updated regularly to ensure they keep up with market trends and product availability. Work on MEPs for ten new appliance categories is encouraging, but further effort is needed to expand and strengthen overall energy efficiency regulations. Indonesia can pull from international knowledge, such as the International Energy Agency’s collaborative platform on Energy Efficient End-use Equipment4, and work with partners such as the United for Efficiency5 and ASEAN SHINE6 initiatives to increase its energy efficiency policy strength and coverage.

Progress in developing and implementing new energy efficiency regulations is important. Improvement in the number of products in the market officially tested is equally positive, though emerging data, for example on AC equipment, show that policy is not always keeping up with market developments, with MEPS below least available efficiency levels. Addressing these gaps requires strengthening of monitoring and evaluation of regulations, not only to ensure compliance but also to improve data on product availability and market preferences (e.g. trends in equipment size and features, which influence energy consumption). Indonesia can pull from international experiences and best practices with monitoring, verification and enforcement of energy efficiency policy, such as the International Energy Agency’s policy pathway on improving compliance within equipment energy efficiency programmes (IEA, 2010[3]), to improve its regulatory capacity and ensure compliance in product testing and industry reporting.

The 2018 revocation of the Ministry of Energy and Mineral Resources (MEMR) regulation on energy conservation services leaves the market without standard documents for energy performance contracting, limiting the market to mostly small engineering firms operating on a business-to-business basis. To tap into the enormous potential for energy service models that have been successful in other countries, clear regulation, including standard documentation, is needed to address repayment conditions (e.g. minimum charges for energy service companies [ESCOs] if energy savings are not as expected), security of payment and contract terms between parties. The government can also support development of an energy services market, for instance by providing technical support and supporting pilot projects to help the market recognise monetised energy savings, which has been a critical factor in enabling wide-spread and bankable ESCO markets in other countries.

Recent growth in renewable power generation capacity is encouraging, though there remain barriers to scale up development. This includes issues with electricity market practices in which power purchase agreements (PPAs) may not be negotiated in a transparent manner with the state electricity company, Perusahaan Listrik Negara (PLN). Lack of clear and consistent application of procurement not only creates the impression of unfair and/or risky investment conditions but also reduces competition in the market, which is critical to achieve cost-competitive electricity market development. In other countries, the terms and conditions of a tender that have relevance for PPA pricing are typically made public, at least to pre-qualified bidders, to encourage competition focused on price, experience and the financial stability of developers. Indonesia should look to address these types of barriers in regulations governing independent power producers (IPPs) and PLN’s purchase of power to create clear and credible market conditions.

New measures such as the Omnibus Law (see Chapter 4) and forthcoming presidential regulation are expected to provide a clearer policy framework and improved business environment for renewable electricity. Development of a presidential regulation rather than ministerial decree also is a clear signal that the government is serious about the clean energy transition. Ensuring these measures achieve their intended effect will require a clear, consistent and fair regulatory environment – essential conditions to unlock wide-spread private sector engagement. In particular, it is vital to address perceived and real risks for renewable project developers, avoiding unclear operational conditions or abrupt changes in rules that discourage investment while also creating a regulatory environment that encourages competition and provides opportunities to achieve cost reductions.

Regulatory changes addressing IPPs and electricity tariffs in recent years have not necessarily helped to facilitate renewable electricity development. Large untapped market potential, for instance through corporate sourcing of renewables, is still hindered by a number of barriers, such as lack of implementing regulation on power-wheeling and current net-metering policy, which are not in line with good practice in other countries. These issues can make it uneconomical to invest in self-generation or challenging to procure off-site generation, thus hindering development of a vibrant market for renewable electricity. To tap into the significant potential for renewables procurement in Indonesia, current regulations and pricing practices need to be reviewed, ensuring transparent and fair application of settlement for self-generation and facilitating contractual agreements between businesses, PLN and IPPs.

Indonesia has initiated several programmes and policies on energy conservation and efficiency over the last decade and since its National Master Plan for Energy Conservation (RIKEN) in 1995. Notable measures include implementation of several regulations for energy management and energy performance standards, such as Ministry of Industry (MoI) Regulation No. 51/20157 on mandatory minimum energy standards for heavy industry users (pulp and paper, textiles, cement and ceramics). The government has also initiated several awareness raising initiatives to increase uptake of energy efficiency as well as capacity building programmes (see Chapter 7).

These measures reflect Indonesia’s commitment to reduce overall national energy intensity, though they can lack incentives or clear implementing guidelines in terms of enforcement of energy efficiency policy. The RUEN minimum 1% annual energy intensity improvement target (for total of 17% energy savings by 2025), is encouraging, but these targets are unlikely to be met. The 1% intensity improvement also is less ambitious than calls to put the world on a path to three percent annual efficiency improvement by the Energy Efficiency Global Alliance8. To meet those recommended improvements, Indonesia’s energy intensity targets would need to be in the order of 2% or 3% per year, alongside increased coverage and enforcement of energy efficiency regulations to send a strong market signal for energy efficiency development. This would also give greater incentive to asset owners or managers, particularly in sectors with often long-lived assets such as industry and buildings, by encouraging them to prioritise actions and investment that will meet policy requirements.

Government Regulation No. 70/20099 set requirements on energy conservation for companies with annual energy consumption exceeding 6 000 tonnes of oil equivalent, representing around 60% of Indonesia’s industry energy consumption (IEA, 2018[4]). It requires those users to appoint an energy manager, develop an energy conservation plan, perform an energy audit and report annual energy consumption to the government. MEMR later enacted its Regulation No. 14/201210 to implement the 2009 Government Regulation, establishing provisions for energy preservation and management for these targeted energy users by establishing requirements to: develop short, medium and long-term energy conservation programmes; conduct regular energy audits (at least once every three years); implement the recommendation of those audits; and submit reports to the government each year on the status of energy conservation and energy audit implementation.

MEMR has also worked with the MoI and the National Standardisation Agency (Badan Standardisasi Nasional) through the support of the United Nations Industrial Development Organisation and the Global Environment Facility to support adoption of energy management and system optimisation standards for industry, based on the International Organisation for Standardisation (ISO) 50001 energy management system, which was used in over 100 countries across more than 42 000 sites in 2019 (ISO, 2020[5]). The resulting Indonesian National Standard (Standar Nasional Indonesia, or SNI) ISO 50015/201411 established the general principles and guidelines for measurement and verification of energy performance of an organisation or its components, and by 2019, 76 sites in Indonesia were ISO-50001 certified.

Indonesia has also taken steps over the last decade to establish building standards and mainstream energy efficiency into building codes. The first SNI on Energy Conservation in Building Envelopes12 established in 2011 set code references for energy conservation and energy audit procedures for all new non-residential buildings and those undergoing substantial renovations. While the code is voluntary, it did create needed standards forlighting and energy audit procedures, all of which are critical steps for moving towards mandatory building energy codes. In effect, the Ministry of Public Works and Housing (MPWH) issued a 2015 decree13 requiring buildings with more than 500 square metres to meet minimum energy performance requirements, with obligations for implementation and certification as well as related incentives for green buildings (see Chapter 5). Unfortunately, the decree does not impose any sections for non-compliance, although it did provide an important framework for the development of green building codes at the sub-national level (Hakim, 2015[6]).

By 2017, 412 of 508 local jurisdictions had a form of building regulation in place, including growing use of international certification programmes such as the EDGE certification14, which was used to certify 339 green buildings in Jakarta in 2018 (Rahman, 2019[7]). The Green Building Council of Indonesia has also been supporting introduction of its Greenship Rating Tools15. In practice, though, application of local building energy codes and standards is rather weak, and only three cities (Jakarta, Bandung, and Surabaya) had implemented the 2015 MPWH decree on green buildings as of 2019.

Bandung has local green building codes with mandatory energy efficiency requirements for large buildings and some additional energy performance requirements for small buildings (Pahnael, Soekiman and Wimala, 2020[8]). Jakarta also passed Regulation No. 38/201216 on mandatory energy efficiency requirements and energy use consumption standards for large buildings. Importantly, Jakarta’s regulation legalised the planning, construction, utilisation, maintenance, and deconstruction of buildings, focusing on energy efficiency, water efficiency, indoor air quality, waste and soil treatment, and construction activities. It also prevents and restricts buildings that fail to meet these standards from receiving building permits – a vital regulatory measure that other cities could adopt to improve compliance with energy performance regulations.

For end-use equipment, Indonesia established its first energy efficiency labelling programme under MEMR Regulation No. 6/201117 to provide information on compact fluorescent lamp (CFL) energy performance. The initial programme covered voluntary labels for CFLs, and then for AC equipment, refrigerators, and freezers. In 2014, first mandatory labelling requirements and MEPS were developed for CFLs18 and then later for single split, wall-mounted residential ACs (inverter and non-inverter types) in 201519. These mandatory energy labels use Indonesia’s one-to-four-star rating scheme, developed in 2016, which shows product energy performance alongside the star rating, with four stars reserved for top-performing products.

The government is pursuing plans to increase the coverage of MEPS for ten other end-use equipment such as electric fans, televisions, rice cookers, refrigerators, and electric motors. This is an important step, as increased MEPS will help to address critical gaps in policy coverage, such as the lack of mandatory performance standards for electric motor systems, which account for around 60% of electricity use in industry (IEA, 2018[4]). In fact, an estimated 35% of the installed motor stock in Indonesia operates at an International Energy (IE) efficiency class of IE0, leaving large room for energy savings. If currently planned MEPS for electric motors set the threshold as the IE2 level (as in China), industrial electricity use by 2030 could be cut by more than 2 terawatt-hours (TWh), or nearly four times the electricity generated by solar and wind power in Indonesia in 2019 (IEA, 2017[9]; IEA, 2020[10]).

The planned expansion of MEPS in Indonesia is a critical step forward, given that energy efficiency policy covers only around 18% of total final energy use in Indonesia, without taking into account actual compliance and enforcement of energy efficiency regulations (Figure 3.1). Policy coverage is highest in industry, thanks to the 2009 Government Regulation and 2012 MEMR requirements for large energy users, though compliance is not comprehensive. Energy codes for large commercial buildings similarly mean there is solid policy coverage of non-residential building energy use, though, again, this does not reflect actual uptake of energy efficiency measures, as codes are mostly voluntary. On the residential side, lack of building energy codes and limited MEPS for appliances and end-use equipment mean there is very low policy coverage (IEA, 2018[4]).Transport similarly lacks energy performance standards, particularly for the rapidly expanding fleet of passenger vehicles.

Roll-out of Indonesia’s energy efficiency regulations, standards and labelling regimes has come with a number of limitations in compliance, enforcement and policy effectiveness, though this has been improving in recent years. For example, MEPS such as the CFL and AC regulations require products on the market to be tested in a government-approved facility before obtaining commercialisation permits. Yet, only 18 of 35 companies were complying with CFL testing in 2016, covering just 27% of the 280 million CFL sales that year (IEA, 2017[9]).

The government has taken this lack of compliance seriously, for instance revoking permits in recent years and telling producers to withdraw products that do not comply with regulations. The result has been an increase in product compliance. For instance, 32 companies were compliant with CFL MEPS and labelling requirements as of 2019.

Similar compliance issues could be seen in industry energy management reporting. Of the 346 industries covered by MEMR energy audit reporting requirements in 2018, only 44 submitted their results, underscoring missed opportunities for energy savings, as the companies that did submit their reporting alleged total energy savings of 1.1 TWh that year (MEMR, 2019[12]). The government has since increased its monitoring and compliance, and by 2019, 148 companies were reporting their energy management activities. This number can still be increased further, in line with the growing number of companies that comply with ISO 50001 (up from 26 companies in 2017 to 106 in 2019). In early 2020, MEMR also expressed its intention to increase significantly energy audits and surveys, and it upgraded its Energy Management Online Reporting System (IESR, 2021[13]).

Another challenge faced by the government on energy efficiency policy is poor market data on available efficiency levels. For example, 2015 AC MEPS were designed with a minimum energy efficiency rating (EER) of 2.5. However, improved data through AC registration and other market statistics showed that the least efficient imported AC was already a 2.53 EER, while the least efficient locally produced AC was above a 2.65 EER. In fact, as much as 80% of available ACs in the Indonesian market already met the highest rating (four stars) in 2015, illustrating the gap between policy and market trends (Letschert et al., 2017[14]).

Positively, an update of AC MEPS was announced under MEMR Regulation No. 57/201720, targeting the minimum EER values of 2.64 by August 2018 and 2.92 after July 2020. These EERs are still close to the lower end of available efficiency levels in the market (IEA, 2018[4]), but the new regulation sets an essential requirement for testing procedures to be carried out by a certified agency, which should help to improve market data on available performance levels. SNI 8476/201821 also added testing requirements for liquid-chilling packages with a vapour compression system and cooling capacity of 350 kilowatts or more.

Indonesia has enacted a number of other policies to support the effective implementation of its energy efficiency regulations. For instance, the 201522 and 201623 MoI Regulations designated accredited institutions and testing laboratories to implement and monitor SNI for ACs, refrigerators and washing machines. MEMR Regulation No. 01/201624 also provided guidelines and procedures on the actual testing and certification of products, implementing Presidential Regulation No. 79/2010 concerning Ratification of the Association of Southeast Asian Nations (ASEAN) agreement regarding harmonization of procedures for the regulation of electrical and electronic equipment25.

Additional standards have been implemented to support effective validation of energy performance in the market. SNI ISO 50006/201426 provided general principles and guidelines on how to establish, use and maintain energy performance indicators and energy baselines as part of the process of measuring energy performance, while SNI ISO 50002/201427 applied ISO standards and specified the principles of carrying out energy audits, including requirements for common processes during the audits, and deliverables for the energy audits. These measures are important milestones to ensure the operative application of Indonesia’s growing energy efficiency regulations.

As Indonesia looks to expand its energy efficiency regulations, it can look to other countries’ experiences in ensuring better monitoring, verification and enforcement of standards and labelling programmes. For example, Australia has shown good practice in monitoring through a mandatory product registration database coupled with market sales data to provide very detailed tracking of the market (Energy Rating, 2016[15]). In India, the Bureau of Energy Efficiency created an independent agency for monitoring and evaluation28, similar to the national independent market surveillance programme established by the Government of the United Kingdom with ring-fenced funding (OPSS, 2019[16]). Likewise, the European Union’s Anti-Circumvention of Standards for Better Market Survey project was set up in recent years to address gaming of test procedures (AntiCSS, 2019[17]).

Indonesia should also accelerate the update of its existing standards and labelling schemes to close the gap between policy and market-available energy efficiency potential (e.g. taking advantage of the big cost declines in light-emitting diode [LED] technology). In addition, the government can complement its growing energy performance standards with supportive elements such as financial incentives, technical assistance and awareness raising programmes to create a “push and pull” approach that is common in other countries, helping to drive out least efficient products and encouraging adoption of the most efficient ones (see Chapter 5).

Indonesia has a number of awareness building programmes that aim to promote energy efficiency uptake and compliance. The PEEN energy efficiency awards29 was initiated by MEMR’s Directorate-General of New, Renewable Energy and Energy Conservation in 2012 to improve energy efficiency in the building and industry sectors. Aligned with the ASEAN Energy Award, PEEN promotes energy efficiency in building and industry by: recognising institutions that have successfully implemented energy efficiency measures; improving participation and awareness of stakeholders in implementing energy efficiency and energy conservation; introducing best practices for energy management systems; and providing incentives to central and local governments that have implemented energy efficiency measures. In 2019, there were 120 participants in the PEEN awards, a tenfold increase since the 2012 kick-off (MEMR, 2020[18]).

MEMR also has three programmes in place to improve awareness of the importance of energy efficiency, targeting different groups of audiences. These include:

  • Kampanye Potong 10% (the 10% [Energy] Cut Campaign), a nation-wide programme kicked off in 2016 targeting stakeholders in the energy sector. There are no incentives to participate, although MEMR encourages energy consumers to participate and benefit from reduced energy bills.

  • Konservasi Energi Goes to Campus (Energy Conservation Goes to Campus), a programme introducing university students to the basic principles of energy efficiency, the ISO 50001 standard and job opportunities for energy auditors and energy managers.

  • A street lighting initiative kicked-off in 2016 to replace conventional halogen lamps with LED lighting in 93 cities as part of a public campaign for energy efficiency using state budget each year. As of late 2018, around 15 000 units had been installed, saving 6.7 gigawatt-hours of electricity each year (MEMR, 2019[12]).

Similar initiatives include the Ministry of Environment’s Adiwiyata Award targeting about 500 junior and senior high schools that implement an environmental approach, including energy efficiency, in their school activities. MEMR and the Ministry of Home Affairs have also collaborated in recent years to encourage energy efficiency in buildings owned by provincial and regional governments, targeting implementation in 18 provinces in 2020. Similarly, MEMR has cooperated with the Muslim clerks and other Islamic associations to promote energy efficiency, as well as with the Dharma Wanita housewives association and sub-district government in the greater Jakarta area.

More recent communications such as MEMR’s annual editions tracking Data & Information of Energy Conservation30 help to demonstrate progress on energy efficiency policy implementation and initiatives. This information is critical to an effective energy efficiency policy regime, and the government could consider tracking additional indicators such as the evolution in shares of star-rated appliances in the market. This would inform the public on policy progress, while equally increasing capacity to identify gaps and opportunities in the market.

The government should continue to build upon its awareness raising initiatives, as these are important elements of an interactive process to engage citizens, business and related energy stakeholders through communication and empowerment strategies that have proven effective in other countries. For example, France has a media campaign to promote residential building energy retrofits, pointing to non-profit organisations that provide free and independent advice to help homeowners choose appropriate energy efficiency solutions (IEA, 2019[19]). The media campaign also uses renovations in schools to communicate the value of sustainable buildings with teachers, children and parents (IEA-UNEP, 2018[20]). These efforts have complemented policies aiming to improve the energy performance of existing buildings in France, helping to create a growing public acceptance of the need to invest in building energy efficiency measures.

The energy services market, which has played an important role in delivering energy performance improvements in other major economies like China, India, the United States and Europe, remains quite nascent in Indonesia, with limited development of ESCOs and energy performance contracting models. These contractual arrangements, typically using a guaranteed or shared savings approach, can help overcome critical barriers to energy efficiency investment, such as lack of technical capacity or adequate financing for upfront capital expenses.

To date, Indonesia’s experience with the ESCO market has been mixed, and the regulatory environment can make it challenging for third-party actors to step into the energy services space. MEMR Regulation No. 14/201631 on the implementation of energy conservation services put forward the policy framework for ESCOs, including standards on the operation of energy conservation service companies to ensure they are independent, reliable, transparent, competitive and efficient, notably with provisions for use of guaranteed and shared savings.

While these types of standards are generally good practice in other countries with robust ESCO markets, the MEMR regulation itself unfortunately did not drive noticeable ESCO market development in Indonesia. This was due in part to other related concerns or market issues, such as lack of sufficient capital or collateral for many ESCOs to meet banks’ requests for a guarantee. Other barriers such as underdeveloped capacity to finance and perform investment grade audits also can impede market growth, as most energy service contracting to date in Indonesia has been with smaller engineering firms.

Ultimately, the MEMR regulation was revoked in 2018 to leave energy service contracting to a business-to-business model, thus leaving ESCOs without a proper regulatory environment common in other countries with robust ESCO markets. By default, Energy Law No. 70/2009 provides an overall policy context for ESCOs. However, this does not provide sufficient provisions or guidelines to unlock the potential for energy service agreements or energy performance contracting on a large scale.

The result is that Indonesia’s ESCO market remains small: the Indonesia ESCO association, APKENINDO, estimates there were around 25 companies listed as ESCOs in 2018 (Tumiwa et al., 2019[21]). In comparison, there are about 50 ESCOs operating in Viet Nam, 125 enlisted by the Bureau of Energy Efficiency in India, and 205 registered in neighbouring Malaysia (Anh, 2020[22]; BEE, 2019[23]; STEC, 2020[24]).

In principle, government regulations on energy audits and energy management systems should help to grow demand for energy services in coming years. To a certain extent, the energy services market may also naturally be driven by the growing number of firms looking to achieve energy savings (e.g. those with ISO 50001 energy management requirements). Yet, the business-to-business model in practice may only work for smaller firms like engineering services, as the lack of regulatory conditions (e.g. standard contract documents, transparent accounting rules and procedures for arbitration) leave risks for overall growth of the ESCO market in Indonesia.

The government also faces its own challenges in spaces where the public sector could lead by example, for instance, by driving energy service market development through public procurement or PPPs. Regulatory conditions have made this engagement challenging, notably because of limitations to government institutions entering multi-year contracts. Presidential Regulation No. 38/201532 on PPPs to provide public infrastructure (including energy conservation) set to make the PPP process more efficient and bankable (Hermawan, Hermawan and Bahar, 2015[25]). Yet, PPPs for energy efficiency are still uncommon, in part because the process requires extensive co-ordination of many stakeholders and also because government contracting agencies often lack the skills and experience to prepare PPPs.

The government does have a PPP Joint Office to support capacity building with central and local governments and to facilitate government contracting agencies in preparing PPP projects. However, the number of energy efficiency PPPs across the country has still remained limited. In turn, the lack of energy efficiency PPPs contributes to banks and other market actors being unfamiliar with these types of projects and their risks, thus limiting overall appetite to provide finance to ESCOs for these types of projects.

There are ways to address these barriers and enable use of market-based solutions for public procurement of energy efficiency, ranging from pilot programmes to demonstrate the potential for energy efficiency PPPs to creation of standardised documents for those projects. For example, the government can develop institutional guidelines and standard PPP documents, such as the Australian government’s Best Practice Guide (AEPCA, 2000[26]) to support government institutions (as well as businesses and facility owners/managers) in using energy performance contracting. This would complement existing Bappenas Regulations No. 04/2015 and No. 02/2020, providing the overall standards for PPP planning and implementation in Indonesia, as well as the toolkit on preparing preliminary study documents that Bappenas produced for street lighting PPPs. Indonesia could also look at potential solutions to address limitations to multi-year contracting, for instance by allowing municipal energy budgets to “freeze” throughout the term of the service agreement, which in turn would help address some of the bank concerns over financing those projects.

Addressing regulatory barriers for public procurement of energy services and solutions will help create a sizeable demand for energy efficiency services, where well-establish ESCO markets in places such as the United States, Europe, India and China all developed largely as the result of the public sector. Insights can also be taken from global experience addressing barriers to energy service market development. For example, the Czech Republic reformed public procurement procedures to facilitate ESCO contracts in the public sector, allowing multi-year contracts and retention of savings for energy efficiency projects (Hofer, Limaye and Singh, 2016[27]). Other countries such as Singapore, Thailand and Turkey developed ESCO accreditation schemes to increase confidence of both public and private actors looking to engage in energy performance contracts, while in India, the creation of the publicly-owned Energy Efficiency Services Limited company was used to apply standard offers for contracts between public agencies and ESCOs.

Electricity Law No. 30/200933 established that PLN would remain the main provider of electricity generation, while also maintaining control of the national transmission network and remaining the sole provider of overall transmission and distribution networks, except in some specific locations or industrial zones. As such, Indonesia remains a traditional vertically integrated market in which IPP electricity generation is sold to the single buyer, PLN. There is no independent regulator, and MEMR’s Directorate General of Electricity is the only institution with mandate to regulate PLN and the electricity sector (see Chapter 2).

While PLN is granted first priority in electricity generation, transmission and distribution, other electricity supply businesses can still operate under the Electricity Law, provided they have the appropriate licence (an “IUPTL”). Government Regulation No. 14/201234 established the formal rules on obtaining licences for electricity supply businesses, and the subsequent MEMR Regulation No. 35/201335 set the procedures to obtain permits. MEMR Regulation No. 12/201636 amended this with additional provisions for private companies to sell electricity to the public or directly to customers, so long as they obtain an electricity business area (Wilayah Usaha) licence as per MEMR Regulation No. 28/2012, later amended by MEMR Regulation No. 07/201637.

The Electricity Law and MEMR regulations stipulate that electricity businesses carry out activities in an integrated way, though this does not include all types of electricity activities. Specifically, the Constitutional Court ruled in its Decision No. 111/PUU-XIII/201538 that unbundling (notably vertical unbundling by directly supplying electricity to consumers) is unconstitutional. This decision in effect means that the power sector allows either disaggregated businesses, with PLN as the off-taker, or private power companies that operate within Wilayah Usaha (e.g. direct electricity generation and use for industrial zones). As such, a business license is needed to sell renewable electricity directly to another entity. It also complicates eventual wheeling of power, for instance for corporate sourcing of off-site renewables, as any wheeling arrangements need to be agreed with PLN, as per MEMR Regulation No. 01/201539.

Intrinsically, PLN’s role as the single buyer and single retailer electricity market greatly influences electricity market development in Indonesia. Its electricity supply business plan (RUPTL) sets forth development plans with the expected role of IPPs, and as such, it is a critical document for project developers, laying forth the path for procurement of and investment in power generation and electricity grids (Figure 3.2). In principle, developers can propose projects that are not in the RUPTL, or conversely propose to change planned projects (MEMR, 2017[28]). However, in practice, PLN is the counterpart of any PPA governing the sale of electricity from IPPs. This creates a convoluted operating environment in which other market actors can manoeuvre.

Legally, procurement by PLN can be done through three tracks, as regulated in MEMR Regulation No. 01/200640 (later amended by MEMR Regulation No. 04/2007) on the procurement of electricity; PLN Director Regulation No. 0022P/DIR/201841 (amended by No.1720P/DIR/2018 and No.0062P/DIR/2020) on Electricity Purchasing from Renewable Energy Sources; and by Government Regulation No. 14/201242 (with amendments in Government Regulation No. 21/2014) regulating electricity supply business activities. These three tracks are (PLN, 2017[30]):

  1. 1. Direct appointment, wherein an IPP is directly appointed by PLN without reviewing or competitively selecting other projects. This includes unsolicited proposals, which must be listed in the next RUPTL, as a first step after being accepted, before proceeding to PLN’s assessment.

  2. 2. Direct selection, in which more than two IPPs submit a project proposal for selection by PLN. The selection process can be tied to a capacity quota (offered by PLN, where the direct selection is based on RUPTL), and PLN performs its due diligence per MEMR Regulation No. 10/201743 on the technical and financial capabilities of the IPPs.

  3. 3. Competitive tender, which has not been used successfully, despite the legal possibility. A large-scale solar auction was organised in 2013 when MEMR announced a reverse auction for 140 megawatts (MW) of solar photovoltaic (PV). However, the auction was cancelled as the practice of foreign investors using only imported components was deemed unconstitutional (Burke et al., 2019[31]).

In practice, direct appointment is the easiest procurement route with PLN. IPPs that signed PPAs through the direct selection process have not always reached financial close, though this can be due to low quality of feasibility study documents (see Chapter 6). The direct selection process from pre-qualification to contract arrangement can also be long, taking up to 150 days (PwC, 2018[32]). MEMR Regulation No. 03/201544 would have shortened the process time to 45 days (PLN, 2017[30]), but it was revoked under MEMR Regulation No. 03/17.

In theory, Presidential Regulation No.16/201845 on public procurement of goods and services (revoking and replacing Presidential Regulation No. 54/201046) simplified and optimised the procurement process. However, the regulation does not officially apply to state-owned enterprises like PLN. Even if it did, the rules do not oblige disclosure of the basis for using a non-competitive procedure, but instead only to indicate the type of procedure (IDFI, 2018[33]). This is different from best practice in countries where there are clear and transparent regulations for electricity procurement, whether it is through direct selection processes or competitive tenders.

The process for IPP grid connection and operations, while regulated, similarly lacks transparency. MEMR Regulation No. 01/201547 set forth the conditions for joint use of the electric power network, and in principal, there is no discrimination in connection to the grid for IPPs, as long as they meet reliability, security and economic considerations. Notably, Regulation No. 01/2015 Article 6 states that power wheeling should follow applicable costs by the transmission licence holder. However, with no detailed implementing regulation on how applicable costs should be understood, the methodology of applicable costs can be different from area to area, thereby creating uncertainty in determining grid and network usage costs, which may deter project development.

Lack of transparency and consistency for electricity market development can create the impression that procurement through PLN is unpredictable and risky (see Chapter 4). This not only limits potential investment in the electricity market but also dissuades a competitive environment that has been critical to cost-effective development in other countries.

Indonesia should look to address these barriers, considering international experiences, such as market reform in Morocco that established an independent agency to organise tendering of renewable energy projects. Morocco succeeded in creating a level playing field between the utility and private investors by performing tenders outside the incumbent utility. These types of practices in other countries and their lessons learned can help Indonesia to apply regulatory conditions that lead to clear and fair competition across all actors and investors.

MEMR Regulation No. 50/201748 on the utilisation of new and renewable energy required most renewable electricity projects to be procured through direct selection with capacity quotas. PLN subsequently implemented Decree No. 0022P/DIR/2018 (and then PLN Director Reg No.0062P/DIR/2020) regarding the purchase of renewable energy, and in order to participate, IPPs must pre-qualify based on certain criteria in order be integrated in the final list (the “DPT”) of qualified IPPs (Hadiputranto, 2019[34]). Criteria are administrative (e.g. having fulfilled tax obligations), technical (e.g. experience in developing IPPs and being able to meet local content requirements issued by the Ministry of Industry) and financial (e.g. demonstrated credit rating or sound financial statement (PwC, 2018[32]).

These changes made the renewable electricity procurement process more transparent, but perhaps not simpler. For example, a direct selection process by PLN was organised in 2017 with a capacity quota of 168 MW, but as of 2019, results still had not been announced (Burke et al., 2019[31]). Part of this is due to local content requirements factored into the selection process, limiting opportunities to achieve cost reductions and creating a possible issue for international IPPs who would compete in the process.

Similarly, MEMR Regulation No. 10/2017 expanded mandatory provisions (e.g. for commissioning and commercial operation dates, dispute resolution and termination of PPAs) for dispatchable electricity projects (PwC, 2018[32]). This helped to provide greater consistency with standards already applied for thermal, geothermal and hydroelectric PPAs. Yet, officially, the regulation only applied to geothermal, hydropower and biomass plants, but not to intermittent renewable energy projects such as solar and wind (regardless of size), mini-hydro (below 10 MW), biogas and waste-to-energy power plants. Moreover, previous specific regulations, such as PPAs for solar PV projects under MEMR Regulation No. 19/201649, were revoked in MEMR Regulation No. 9/201850. The result, despite its intent, is an uncertain regulatory environment for project developers concerning those types of renewable electricity projects.

MEMR Regulation No. 49/201751 integrated additional provisions to MEMR Regulation No. 10/2017, mandating that build-own-operate-transfer (BOOT) schemes for PPAs have concession periods no longer than 30 years. The regulation also required all PPAs (including renewable electricity) to apply the BOOT scheme, effectively transferring IPP facilities to PLN at the end of the agreement and implying that PPA renewals will not be possible. This may not be a concern for all project developers (e.g. 30 years would not be an issue for typical renewable electricity discounted cash flow analysis), and most projects already effectively constitute BOOT arrangements with PLN. However, the requirement can create issues for some renewable electricity projects, such as biomass power plants, where the power assets are sometimes inseparable from other IPP assets (e.g. land to produce the biofuel feedstock).

MEMR Regulation No. 10/201852 further amended MEMR Regulation No. 10/2017, creating concerns of risk allocation between IPPs and PLN. Previous regulations distinguished several types of risks, including natural force majeure (NFM) and government force majeure (GFM), which was differentiated for “change in laws and policies” and “unjustified government action or inaction” such as unjustified license revocation. Those force majeure risks were traditionally borne by PLN, but MEMR Regulation No. 10/2017 integrated a provision that released both parties in the case a GFM caused the IPP to stop operating, thus shifting the de facto risk to IPPs. The 2018 amendment then removed the mention of GFM altogether, leaving it up to the PPA parties to negotiate risk allocation on a business-to-business basis. The amendment also released PLN from making a deemed dispatch payment when NFM events prevent PLN from taking power, instead allowing compensation by extending PPAs by the length of time lost by the disaster and any associated repairs. This can be problematic for IPPs with regular debt service payments from project cash flow (PwC, 2018[32]). It also poses a risk to asset owners since they would still have debt to service in the event of force majeure, thus influencing the bankability of PPAs.

MEMR Regulation No. 04/202053 again amended the 2017 regulation, notably enacting three changes to the procurement of renewable electricity projects. The first re-established the possibility for PLN to use direct appointment of renewable IPPs, and the second removed the requirement for those projects to be developed exclusively under the BOOT scheme. The third requires PLN to prioritise electricity from renewable IPPs based on a must-run regime, without restriction on the generation capacity of those IPPs. These are all positive developments, more closely in line with international practice.

A presidential regulation on renewable electricity is also expected in 2021, and this should help to facilitate further renewable electricity projects. For example, it is expected that MEMR will provide renewable energy quotas, that the Ministry of Spatial Planning will provide assistance with land permitting issues, that MoI will relax some of its local content requirements, and that the Investment Coordinating Board, BKPM, will implement an integrated permitting process to monitor and ease permit issuance with central and local governments. At the same time, future implementing regulations will need to ensure that the overall procurement process is clear and consistent across all renewable electricity projects. The government should work to ensure that recent positive policy changes are part of a more predictable and transparent process. This has been a critical element in making large-scale and wide-spread renewable electricity development attractive in other countries.

MEMR Regulation No. 31/2009 was the basis for renewable energy pricing in Indonesia, stipulating a single flat FiT for renewable electricity purchases by PLN. Subsequent changes by MEMR and PLN raised the FiT successively in an attempt to attract renewable electricity project development, but the FiT was revoked by MEMR Regulation No. 04/2012 and then by MEMR Regulation No. 07/2018. An entirely new price ceiling system was introduced under MEMR Regulation No. 50/2017 (later revised by MEMR Regulations No. 53/2018 and 04/2020). As such, tariffs for renewable electricity projects are determined relative to PLN’s average costs of electricity provision (Biaya Pokok Penyediaan, or BPP) at the national and local level.

In essence, BPP represents the cost to PLN of procuring power from different systems listed in a BPP decree, which is reviewed annually. The BPP must include considerations of fuel price, operation and maintenance depreciation, incurred costs for generating power and an annual adjustment. Present year BPPs are based on the BPP realised in the previous year and should take into account the principles of effective, efficient and accountable processes. MEMR has the right to set the formula for calculating the BPP, as spelled out in MEMR Regulation No. 24/2017 on the mechanism for determining the generation cost for PLN, though the actual calculation of the listed BPP is still not very clear. By contrast, the use of the listed BPPs is straightforward: where local BPP is above national BPP, tariffs for solar PV, wind, biomass, biogas and ocean power shall not exceed 85% of local cost (for municipal waste, geothermal and hydropower, it is 100%); where the local BPP is below national BPP, IPPs and PLN can mutually agree on the tariff, the most likely being 100% of local BPP.

This approach to remuneration is not typical practice used globally (Figure 3.3), and may create barriers to creating price reductions that benefit consumers and attract further investment. FiT and feed-in-premium (FiP) schemes have been the most common method used to determine renewable electricity tariffs, though the number of countries using these has decreased slightly in recent years as the use of auction schemes has increased. In the growing market for auction schemes, price caps can be implemented, but they are more commonly related to a calculation of an acceptable rate of return, rather than the current generation cost of a system. International experiences also show that the price of renewables reduces significantly once a country obtains a certain scale of deployment. Thus, by tying the price of renewables to BPP, Indonesia may be creating a barrier to achieving price reductions that attract further investment.

The change in regulation to use of BPPs was widely criticised by renewable energy proponents, who noted that the tariff structure is both challenging and risky for developers. In particular, continued use of subsidies for consumer electricity prices (see Chapter 5) indirectly encourages use of cheap coal, which decreases BPPs in many regions, thereby creating an uneven playing field for renewable electricity generation (Bridle et al., 2018[36]). In fact, a study by the Global Subsidies Initiative found that if coal subsidies (e.g. through credit support and domestic market obligations) were removed, the price of electricity from coal-fired power generation would rise by as much as USD 0.05 per kilowatt-hour (kWh), making renewable electricity projects more attractive under the current BPP scheme (Attwood et al., 2017[37]). Thus, while the government’s goal understandably is to reduce BPPs across the country in order to ensure affordable electricity, the continued use of fossil fuel subsidies does not create a level playing field to achieve those ambitions in a cost-effective and competitive manner.

It remains to be seen whether future regulatory measures such as the presidential regulation on renewable electricity will address the BPP pricing scheme and resulting concerns for renewable project bankability. One key expectation for the forthcoming Regulation is that it will introduce auctions for larger scale renewable projects and reintroduce a FiT for smaller projects. The threshold is expected to be 10 MW, and a locational component is anticipated in the pricing structure, though it is not clear if there will be a locational component for both auctions and the FiT. It is also envisaged that remuneration of the FiT will use two levels, with a higher FiT in the beginning of the PPA and lower one towards the end of the agreement.

Such a layered payment is not necessarily common in other remuneration mechanisms around the world, but it should not be a disadvantage in the FiT design. The most important element is the transparency of pricing and the balance between level of pricing and other factors such as ease of permitting, perception of regulatory stability and related contractual elements (e.g. arbitrage clauses). If designed and implemented carefully, the presidential regulation on renewables can be a facilitator of higher levels of renewable investment in Indonesia, addressing some of the issues in current regulations that can act as barriers in attracting investors for renewable electricity projects.

RUEN set a target of installing around 6.5 GW of solar projects, including distributed rooftop solar, and the government has tried to encourage development of solar capacity through its “One Million Solar Rooftops” initiative, which achieved more than 2 300 customers by mid-2020, with a total capacity reaching 11.5 MW (MEMR, 2020[38]). Yet, recent changes in the regulatory framework have not mirrored these ambitions. Notably, MEMR Regulation No. 49/201854 on the utilisation of solar rooftop changed net-metering arrangements with PLN. Under the regulation, customers are required to submit a formal application to benefit from the net-metering scheme, under which any electricity exported to the grid is counted at 65% of the applicable PLN tariff. In practice, this means that if rooftop PV produces and exports 600 kWh, then the customer will be credited only 390 kWh (600x65%). The justification for this 65% benchmark is to pay for the cost of grid infrastructure supporting the generating asset. Yet, as the calculation clearly favours on-site consumption (in which case 100% of the on-site production is deducted from the consumer’s final bill), the net-metering scheme does not necessarily provide real incentive for potential exporters of on-site renewable electricity production.

This practice contrasts historical policy that credited “savings” from rooftop solar electricity production, meaning every kWh of electricity was credited up to a year in the consumer’s balance. Forthcoming changes to MEMR Regulation No. 16/2019 (which amended MEMR Regulation No. 49/2018) are expected to raise the export calculation from 65% to 75%, and to 90% for consumers with battery capacity. However, these tariff rules are still not in line with net-metering schemes globally. Depending on the sophistication of the market, in some countries exported power is paid at a FiT rate, while in others it is settled at the hourly spot price. In Denmark, for example, any power exported from rooftop solar is settled at the hourly market price, and grid tariffs are calculated separately. India uses different settlement structures, depending on the state and business model. In general, if net metering is used, the net between consumption and self-production is settled at the applied tariff (i.e. the tariff would be 100% if compared to Indonesia). In the case of gross metering, exported generation is settled at a FiT, which typically is below the tariff applied to consumption.

The lack of transparency about the value of exported solar in Indonesia, by integrating grid tariffs into the settlement of exported power, has likely created a barrier for investment, in addition to making it difficult to benchmark the pricing of grid services from PLN. This is true not only for small rooftop solar installations (e.g. on residential buildings), but also for the growing number of businesses and industry looking to procure renewable electricity through corporate sourcing of renewables (see Chapter 5). While captive power plants within Wilayah Usaha may work for some consumers, a large number of corporate customers looking to source renewable electricity require a grid connection. Settling the net-metering export price at a reduced rate can thus be seen as a disadvantage for on-site renewables (for example compared to investing in energy conservation measures to achieve the equivalent of on-site power generation).

There is no official alignment of renewable electricity and energy efficiency regulations in Indonesia, though KEN and RUEN both oblige Indonesia’s planning authorities to include energy conservation in electricity planning. As a result, energy modelling for RUEN and the 2019-28 RUPTL include energy efficiency targets in their electricity supply scenarios. This is important, as integration of energy efficiency with renewable electricity will be key to decreasing the burden of peak loads on power needs.

In practice, Indonesia does have some experience in combining efficiency and renewable energy as part of its development plans, for instance to achieve 100% electrification across the archipelago. The Energy Saving Solar Lights (Lampu Tenaga Surya Hemat Energi) programme launched in 2017 was part of a pre-electrification programme in areas of low energy access. Each household under the programme was given four LED lamps, together with a 20 watt-peak solar PV module and lithium battery that can last for 60 hours. While relatively small in size (the programme aimed to reach 175 782 homes in 15 provinces by 2018) and scale (in terms of electricity supply), the programme did underscore the importance of integrating renewable energy with energy-efficient end-use equipment to ensure secure and reliable energy access. In fact, had incandescent lamps of equivalent light output been used, the households would have needed six to eight more solar PV modules of the same watt-peak power (IEA, 2018[4]).

A similar initiative called TaLis (for Tabung Listrik, or Electric Tube) was launched by the University of Indonesia in 2018 to provide lightweight, portable batteries with 630 watt-hours of electricity for underserved and rural areas. Given the relatively small capacity of those batteries, use of energy-efficient lighting and equipment plays a central role in how often households need to recharge.

As renewable electricity shares increase in Indonesia’s power generation mix, integrated planning of renewable energy and energy efficiency policy will be critical to transcending eventual supply and demand silos, which presents both challenges and opportunities at higher levels of renewable electricity penetration (IEA, 2020[39]). For instance, electricity savings in one area can mitigate need for additional power generation capacity, potentially allowing construction of power plants elsewhere in areas or regions that do not have limited or insecure access to electricity. Combination of digital, real-time information with electric power systems can also provide benefits with increasing decentralisation of electricity supply.

Integrated planning and policy can take advantage of emerging opportunities such as peer-to-peer electricity trading models that can address balancing and congestion issues in the electricity system, while enabling higher system flexibility and providing ancillary services (IRENA, 2020[40]). Currently, there are no smart grid or demand-side management (DSM) policies in place in Indonesia, although PLN's RUPTL does have plans to develop smart grid and DSM pilots in the Java-Bali area (PLN, 2019[29]). PLN also kicked off several smart grid programmes in 2020, such as work on advanced metering infrastructure, digital substations and a smart community pilot project in Karawang outside Jakarta.

Indonesia should consider opportunities to align energy efficiency and renewable energy policies and regulations, which will help to improve energy system flexibility and costs in the future. Improvements in energy performance and demand-side response will also enable higher use of distributed electricity generation. Ensuring that happens in an integrated way will require a portfolio of policies that incentivise participation and reward flexibility (e.g. through price signals in a dynamic electricity tariff scheme), which may require modifications to existing regulations (e.g. in the current net-metering scheme).

References

[26] AEPCA (2000), A Best Practice Guide to Energy Performance Contracts: reducing operating costs through guaranteed outcomes, Canberra, https://www.eec.org.au/uploads/images/NEEC/Information%20Tools%20and%20Resources/Best%20Practice%20guide%20to%20EPC.pdf (accessed on 15 December 2020).

[22] Anh, T. (2020), “ESCO Vietnam has potential but faces challenges”, Vietnam Investment Review, https://www.vir.com.vn/esco-vietnam-has-potential-but-faces-challenges-80370.html (accessed on 15 December 2020).

[17] AntiCSS (2019), Anti-circumvention of standards for better market surveillance, https://www.anti-circumvention.eu/about-project/project-introduction (accessed on 17 December 2020).

[37] Attwood, C. et al. (2017), Financial Supports for Coal and Renewables in Indonesia, Global Subsidies Initiative, International Institute for Sustainable Development, https://www.iisd.org/system/files/publications/financial-supports-coal-renewables-indonesia.pdf (accessed on 16 December 2020).

[23] BEE (2019), Programmes: ESCOs, Bureau of Energy Efficiency, https://beeindia.gov.in/content/escos-0#:~:text=Currently%2C%20127%20ESCOs%20are%20empaneled,tapped%20by%20ESCOs%20so%20far. (accessed on 15 December 2020).

[36] Bridle, R. et al. (2018), Missing the 23 Per Cent Target: Roadblocks to the development of renewable energy in Indonesia, Global Subsidies Initiative, International Institute for Sustainable Development (IISD), https://www.iisd.org/sites/default/files/publications/roadblocks-indonesia-renewable-energy.pdf (accessed on 15 December 2020).

[31] Burke, P. et al. (2019), Overcoming barriers to solar and wind energy adoption in two Asian giants: India and Indonesia.

[1] CLASP (2020), Indonesia Residential End Use Survey, Collaborative Labeling and Appliance Standards Program (CLASP), Washington, D.C., https://clasp.ngo/publications/indonesia-residential-end-use-survey (accessed on 15 December 2020).

[15] Energy Rating (2016), Whitegoods Efficiency Trends 1993-2014, Equipment Energy Efficiency (E3) programme, Australian Government, https://www.energyrating.gov.au/document/whitegoods-efficiency-trends-1993-2014 (accessed on 17 December 2020).

[34] Hadiputranto, H. (2019), PLN re-opens prequalification process for Indonesian renewable projects, Global Business Guide Indonesia, http://www.gbgindonesia.com/en/main/legal_updates/pln_re_opens_prequalification_process_for_indonesian_renewable_projects.php (accessed on 15 December 2020).

[6] Hakim, H. (2015), “Kementerian PUPR Dorong Pemda Gencarkan Bangunan Hijau (The PUPR Ministry Encourages Local Governments to Increase Green Buildings)”, Bisnis Indonesia, https://ekonomi.bisnis.com/read/20150507/47/430566/kementerian-pupr-dorong-pemda-gencarkan-bangunan-hijau (accessed on 15 December 2020).

[25] Hermawan, J., I. Hermawan and J. Bahar (2015), “New PPP Regulations: PR No. 38/2015”, Mondaq, https://www.mondaq.com/government-contracts-procurement-ppp/456354/new-ppp-regulations-pr-no-382015 (accessed on 15 December 2020).

[27] Hofer, K., D. Limaye and J. Singh (2016), Fostering the Development of ESCO markets for energy efficiency, Live Wire 2016/54, World Bank Group, https://openknowledge.worldbank.org/handle/10986/23949 (accessed on 15 December 2020).

[33] IDFI (2018), Recommendations for the Public Procurement System of the Republic of Indonesia, Institute for Development of Freedom of Information, https://openupcontracting.org/assets/2019/04/Indonesia-Brief-on-Public-Procurement.pdf (accessed on 15 December 2020).

[10] IEA (2020), Data & Statistics, Electricity Information, International Energy Agency, https://www.iea.org/data-and-statistics?country=INDONESIA&fuel=Electricity%20and%20heat&indicator=ElecGenByFuel (accessed on 15 December 2020).

[39] IEA (2020), Power systems in transition: Challenges and opportunities ahead for electricity security, OECD Publishing, Paris, https://dx.doi.org/10.1787/4ad57c0e-en.

[11] IEA (2019), Energy Efficiency 2019, International Energy Agency, Paris, https://dx.doi.org/10.1787/ef14df7a-en.

[19] IEA (2019), Perspectives for the Clean Energy Transition: The Critical Role of Buildings, International Energy Acency, Paris, https://webstore.iea.org/perspectives-for-the-clean-energy-transition (accessed on 16 December 2020).

[4] IEA (2018), Energy Efficiency 2018: Analysis and outlooks to 2040, International Energy Agency, Paris, https://dx.doi.org/10.1787/9789264024304-en.

[35] IEA (2018), Renewables 2018: Analysis and Forecasts to 2023, International Energy Agency, Paris, https://dx.doi.org/10.1787/re_mar-2018-en.

[9] IEA (2017), Energy Efficiency 2017, International Energy Agency, Paris, https://dx.doi.org/10.1787/9789264284234-en.

[3] IEA (2010), Policy Pathway: Monitoring, Verification and Enforcement, International Energy AGency, Paris, https://www.iea.org/reports/policy-pathway-monitoring-verification-and-enforcement-2010 (accessed on 15 December 2020).

[20] IEA-UNEP (2018), 2018 Global Status Report: Towards a zero-emission, efficient and resilient buildings and construction sector, International Energy Agency, United Nations Environment Programme, https://webstore.iea.org/2018-global-status-report (accessed on 17 December 2020).

[13] IESR (2021), Indonesia Energy Transition Outlook 2021 - Tracking Progress of Energy Transition in Indonesia, https://iesr.or.id/pustaka/indonesia-energy-transition-outlook-2021 (accessed on 2 March 2021).

[40] IRENA (2020), Peer-to-peer electricity trading: innovation landscape brief, International Renewable Energy Agency, Abu Dhabi, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Jul/IRENA_Peer-to-peer_trading_2020.pdf?la=en&hash=D3E25A5BBA6FAC15B9C193F64CA3C8CBFE3F6F41 (accessed on 15 December 2020).

[5] ISO (2020), ISO survey of management system standard certifications, International Organisation for Standardisation, https://isotc.iso.org/livelink/livelink?func=ll&objId=18808772&objAction=browse&viewType=1 (accessed on 15 December 2020).

[14] Letschert, V. et al. (2017), Baseline Evaluation and Policy Implications for Air Conditioners in Indonesia, Lawrence Berkeley National Laboratory, https://eta.lbl.gov/publications/baseline-evaluation-policy (accessed on 15 December 2020).

[18] MEMR (2020), Data & Information of Energy Conservation 2019, 3rd Edition, Directorate of Energy Conservation, Ministry of Energy and Mineral Resources, http://www.ebtke.esdm.go.id (accessed on 15 December 2020).

[38] MEMR (2020), More Competitive Price, Key to Indonesia’s One Million Rooftop Solar Systems, Ministry of Energy and Mineral Resources, https://www.esdm.go.id/en/media-center/news-archives/harga-makin-kompetitif-pemerintah-optimis-wujudkan-satu-juta-surya-atap (accessed on 16 December 2020).

[2] MEMR (2020), Penerapan SKEM Label Hemat Energi Pada Masa ’Normal Baru’ (Application of Energy Saving Label SKEM in the ’New Normal’ Period), Directorate of Energy Conservation, Ministry of Energy and Mineral Resources, https://www.esdm.go.id/id/berita-unit/direktorat-jenderal-ebtke/penerapan-skem-label-hemat-energi-pada-masa-normal-baru (accessed on 15 December 2020).

[12] MEMR (2019), Data & Information of Energy Conservation 2018, 2nd Edition, Directorate of Energy Conservation, Ministry of Energy and Mineral Resources, https://drive.esdm.go.id//wl/?id=cwFohj0AaWgwIWQMNr5Yu68d8ptxTg4o (accessed on 15 December 2020).

[28] MEMR (2017), Investment Opportunity of Renewable Power Generation in Indonesia, Directorate General of New, Renewable Energy and Energy Conservation; Ministry of Energy and Mineral Resources, https://fr.slideshare.net/AbdurrahmanArum/investment-opportunity-renewable-power-generation-in-indonesia-2017 (accessed on 15 December 2020).

[16] OPSS (2019), Regulations: ecodesign of energy-consuming products, Office for Product Safety & Standards, United Kingdom, https://www.gov.uk/guidance/placing-energy-related-products-on-the-uk-market (accessed on 17 December 2020).

[8] Pahnael, J., A. Soekiman and M. Wimala (2020), “Penerapan Kebijakan Insentif Green Building di Kota Bandung (Implementation of Green Building Incentive Policies in Bandung City)”, Jurnal Infrastruktur, Vol. 6/1, pp. 1-13, http://dx.doi.org/10.35814/infrastruktur.v6i1.1315.

[29] PLN (2019), Rencana Usaha Penyediaan Tenaga Listrik (RUPTL) PT. PLN 2019 - 2028 (PT PLN Power Supply Business Plan 2019-2028), PT Perusahaan Listrik Negara (Persero) , Jakarta, https://gatrik.esdm.go.id//assets/uploads/download_index/files/5b16d-kepmen-esdm-no.-39-k-20-mem-2019-tentang-pengesahan-ruptl-pt-pln-2019-2028.pdf (accessed on 16 December 2020).

[30] PLN (2017), General Terms in IPP Business in PLN, PT Perusahaan Listrik Negara (Persero) , Jakarta, https://web.pln.co.id/statics/uploads/2017/05/Buku-IPP.pdf (accessed on 16 December 2020).

[32] PwC (2018), Power In Indonesia - Investment and Taxation Guide, http://www.pwc.com/id (accessed on 19 July 2019).

[7] Rahman, R. (2019), “Poor customer awareness holds back green building projects - Business - The Jakarta Post”, The Jakarta Post, https://www.thejakartapost.com/news/2019/02/20/poor-customer-awareness-holds-back-green-building-projects.html (accessed on 15 December 2020).

[24] STEC (2020), List of Registered Energy Service Company (ESCO), Suruhanjaya Tenaga Energy Commission, https://www.st.gov.my/web/consumer/esco (accessed on 15 December 2020).

[21] Tumiwa, F. et al. (2019), Industrial Energy Accelerator: Indonesia Diagnostic, Industrial Energy Accelerator, https://www.industrialenergyaccelerator.org/wp-content/uploads/FINAL-Indonesia-Diagnostic_WEB.pdf (accessed on 15 December 2020).

Notes

← 1. Energy Law No. 30/2007

← 2. Government Regulation No. 79/2014

← 3. Presidential Regulation No. 22/2017

← 4. For more information, visit: https://www.iea-4e.org/.

← 5. https://united4efficiency.org/

← 6. http://www.aseanshine.org/

← 7. Ministry of Industry Regulation No. 51/2015 specifies limits on the amount of energy used to produce one tonne of product for: pulp and paper (514/M-IND/Kep/12/2015), textiles (515/M-IND/Kep/12/2015), cement (512/M-IND/Kep/12/2015) and ceramics (513/M-IND/Kep/12/2015)

← 8. For more information, see https://eeglobalalliance.org/three-percent-club.

← 9. Government Regulation No. 70/2009

← 10. MEMR Regulation No. 14/2012

← 11. SNI ISO 50015/2014

← 12. National Energy Efficiency Standard for Buildings and its standards for: building envelopes (SNI 03-6389/2011); air-conditioning systems (SNI 03-6390/2011); lighting systems (SNI 03-6197/2011) and energy audit procedures (SNI 03-6196/2011)

← 13. MPWH Regulation No. 02/PRT/M/2015

← 14. For more information, see https://edgebuildings.com/.

← 15. For more information, visit: http://gbcindonesia.org/EN/download/doc_details/22-choosing-the-right-green-building-materials?tmpl=component

← 16. Governor Regulation of DKI Jakarta No. 38/2012

← 17. MEMR Regulation No. 06/2011

← 18. MEMR Regulation No. 18/2014

← 19. MEMR Regulation No. 07/2015

← 20. MEMR Regulation No. 57/2017

← 21. SNI 8476/2018

← 22. MoI Regulation No. 13/2015

← 23. MoI Regulation No. 13/2016

← 24. MEMR Regulation No. 01/2016

← 25. https://asean.org/?static_post=agreement-on-the-asean-harmonized-electrical-and-electronic-equipment-eee-regulatory-regime-kuala-lumpur-9-december-2005

← 26. SNI ISO 50006/2014

← 27. SNI ISO 50002/2014

← 28. For more information, visit: https://beeindia.gov.in/content/iame.

← 29. National Energy Efficiency Award

← 30. https://drive.esdm.go.id//wl/?id=cwFohj0AaWgwIWQMNr5Yu68d8ptxTg4o

← 31. MEMR Regulation No. 14/2016

← 32. Presidential Regulation No. 38/2015

← 33. Electricity Law No. 30/2009

← 34. Government Regulation No. 14/2012

← 35. MEMR Regulation No. 13/2013

← 36. MEMR Regulation No. 12/2016

← 37. MEMR Regulation No. 07/2016

← 38. Decision No. 111/PUU-XIII/2015

← 39. MEMR Regulation No. 01/2015

← 40. MEMR Regulation No. 01/2006

← 41. Decree No. 0022P/DIR/2018

← 42. Government Regulation No. 14/2012

← 43. MEMR Regulation No. 10/2017

← 44. MEMR Regulation No. 03/2015

← 45. Presidential Regulation No. 16/2018

← 46. Presidential Regulation No. 54/2010

← 47. MEMR Regulation No. 01/2015

← 48. MEMR Regulation No. 50/2017

← 49. MEMR Regulation No. 19/2016

← 50. MEMR Regulation No. 9/2018

← 51. MEMR Regulation No. 49/2017

← 52. MEMR Regulation No. 10/2018

← 53. MEMR Regulation No. 04/2020

← 54. MEMR Regulation No. 48/2018

Metadata, Legal and Rights

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

© OECD 2021

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions.