Jakarta – The Ministry of Energy and Mineral Resources (MEMR) has issued Ministerial Regulation (Permen) Number 5 Year 2025, which is expected to provide legal certainty and encourage investment in the green energy sector. Secretary General of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said in a statement on Wednesday, 12 March, that the regulation is the government’s concrete step in realising a more sustainable national energy security.
“With this regulation, it is expected that business actors and investors will get certainty in the renewable energy-based electricity sale and purchase mechanism, including contract aspects, payment schemes, and the rights and obligations of the parties,” he said.
This regulation will be the primary reference for PT Perusahaan Listrik Negara (Persero) and Independent Power Producer (IPP) developers in drafting power purchase agreements (PJBL). It addresses challenges faced by the NRE sector, such as contract uncertainty, protracted negotiations, and financial risks faced by developers due to the absence of clear agreement standards.
Director General of New, Renewable Energy and Energy Conservation (EBTKE) Eniya Listiani Dewi explained that this regulation was issued in response to various obstacles hindering the acceleration of green energy projects. “So far, different contract interpretations have often caused projects to be delayed and transaction costs to increase. With clearer rules, investment schemes will become more attractive to business players,” he said.
Minister Decree Number 5 Year 2025 contains detailed provisions regarding the preparation and extension of PPAs, the amount of implementation guarantees, and price changes for Geothermal Power Plants (PLTP). In addition, this regulation also regulates other essential aspects, such as the certainty of Commercial Operation Date (COD) for PLTP projects, the use of Domestic Component Level (TKDN), and the right to the economic value of carbon from NRE-based plants.
Furthermore, this regulation also provides special provisions for NRE power plants with energy storage facilities and a refinancing mechanism to ensure the continuity of ongoing projects. With this regulation, the government hopes to accelerate the clean energy transition while attracting more investment in the NRE sector.
“Investment in renewable energy is not only a matter of sustainability but also a long-term strategy to create a more stable and competitive national energy security,” Eniya added. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
