According to reporting from Think GeoEnergy, the Government, through the Ministry of Energy and Mineral Resources (ESDM) has ratified the Ministerial Regulation (Permen) ESDM Number 5 of 2025 concerning Guidelines for Power Purchase Agreements (Perjanjian Jual Beli Tenaga/PJBL) from Power Plants that utilize Renewable Energy Sources. The new guidelines will apply to geothermal power plants, as well as hydroelectric, photovoltaic, wind, biomass, and biogas energy sources.
ESDM Ministerial Regulation Number 5 of 2025 introduces new provisions for PJBL and PJBL extensions, the amount of implementation guarantee, changes in the price of Geothermal Power Plants (Pembangkit Listrik Tenaga Panas Bumi / PLTP), Commercial Operation Date (COD) of PLTP, utilization of Domestic Component Level (TKDN), rights to environmental attributes or carbon economic value of EBT, special transactions if the EBT generator has energy storage, to the implementation of EBT generator refinancing, says Think GeoEnergy.
More specifically, the new regulations allow for:
- COD of geothermal power plants to be carried out in stages in accordance with the availability of steam supply;
- Adjustments on the pre-agreed price for geothermal power plants, taking into account the results of geothermal exploration and the highest benchmark price in accordance with laws and regulations; this shall be valid upon approval of the Minister;
- Adjustments on the selling price of electricity if there are changes in costs and technical elements including tax and levy obligations, environmental obligations, obligations related to non-tax state revenues, and/or other provisions and conditions agreed by the parties and stated in the PJBL.
Secretary General of the Ministry of ESDM, Dadan Kusdiana, explained that this regulation aims to be a reference for PT Perusahaan Listrik Negara (Persero) and independent power plant developers (Independent Power Producers/IPPs) in preparing power purchase agreements (PJBL). In addition, this regulation provides legal certainty in the electricity purchase mechanism, including clarity regarding the rights and obligations of each party, payment schemes, risk allocation, and other provisions, reports Think GeoEnergy.
The Secretary emphasized that this regulation is a follow-up to the government’s vision in realizing national energy security. “The President has repeatedly emphasized the importance of Asta Cita, one of which includes energy security. The Minister then translated this concept into a policy that ensures energy sources come from within the country. Energy security is basically based on the principle of economics.”
Eniya Listiani Dewi, Director General of New, Renewable Energy, and Energy Conservation (EBTKE), explained that the background to the issuance of ESDM Regulation Number 5 of 2025 was the absence of standards in the preparation of PJBL contracts. This has resulted in different interpretations, long and complex negotiation processes, and increased transaction costs. This also causes delays in project realization and uncertainty in payment schemes, force majeure mechanisms, and risk sharing, which pose risks to the financial stability of developers, according to Think GeoEnergy.
“This clearer and fairer regulation is expected to encourage investment in the renewable energy sector, thereby accelerating the achievement of green energy targets. Overall, this policy is an important step to ensure that Indonesia can achieve more environmentally friendly, sustainable, and highly competitive energy security,” Eniya said.
Source: ESDM, Think GeoEnergy
Stock image by WikiImages from Pixabay
