Indonesia to Include Power Wheeling in Renewable Energy Bill

The Indonesian government will include Power Wheeling technology in the Renewable Energy Sources Act, which will allow private companies to sell electricity directly to consumers through a transmission network owned by state-owned energy company PLN.

Director General of New Renewable Energy Sources and Energy Saving at the Ministry of Energy and Mineral Resources Eniya Listiani Dewi said on Thursday that the ministry is in the process of formulating pricing principles and terms of use of PLN transmission for the distribution of electricity from renewable sources.

The government removed the articles on e-cycling from the bill in November 2022, but later reinstated the plan the following year.

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

Entrepreneurs are demanding that this provision be included in the draft law, but some ministries in President Joko Widodo’s administration still do not want to agree to it.

The Ministry of Finance believes that this mechanism may cause electricity prices to fluctuate due to market influence, which will prevent people from paying. Others fear that PLN may suffer losses when electricity supply exceeds demand.

According to Energy and Minerals Minister Arifin Tasrif, Indonesia will find it difficult to meet its renewable energy targets if it depends on only one supplier, PLN said, noting that opening up the industry will encourage independent power producers to generate renewable energy, which could help accelerate clean energy adoption in Indonesia.