Power wheeling, a new opportunity for renewables investment in Indonesia

Jakarta – The Indonesian government continues to encourage the implementation of the power wheeling scheme in the New and Renewable Energy (EBET) bill. This scheme is expected to be included in the EBET supply fulfilment provisions, specifically in Articles 29A and 47A, as a formulation of network utilisation cooperation (open access).

Power wheeling is the joint use of electricity networks, where electricity producers can distribute electricity directly to end users through transmission and distribution networks owned by license holders.

The Institute for Essential Services Reform (IESR) supports the inclusion of this scheme in the EBET bill, seeing it as a great opportunity for the development and wider utilisation of renewable energy, supporting the energy transition towards net-zero emission (NZE) that the government has set.

IESR Executive Director Fabby Tumiwa said power wheeling would increase the supply and demand for renewable energy, especially in industrial electrification solutions, thus triggering increased investment. He also believes that dependence on demand and procurement processes from PLN makes developing renewable energy in Indonesia difficult.

“PLN’s position as a single off-taker causes the development of renewable energy resources to be not optimal. The power wheeling scheme will encourage the involvement of electricity producers, both other SOEs and the private sector, in developing renewable energy to increase Indonesia’s renewable energy mix more quickly,” he explained, adding that power wheeling is not a form of electricity privatization.

“The transmission network is not sold to private parties and is still under the ownership of PLN as a state-owned enterprise. This scheme can optimize the utilization of PLN’s transmission network assets to increase PLN’s revenue from network rental fees, which can be used to strengthen PLN’s investment in the network,” he added.

IESR highlights several important things in the implementation of power wheeling. First, the scheme should promote renewable energy, specifically mentioned in the bill as renewable power wheeling. Second, implementing power wheeling must not compromise the reliability of electricity supply. Third, power wheeling must be regulated so as not to harm the network owner.

Fourth, the government or regulator must determine the tariff formula for using the shared electricity network. Fifth, making more detailed derivative rules regarding power wheeling is necessary.

“Currently, the industry is interested in building a sustainable industry. Many industry associations, including those joining RE100, are urging the same. With the power wheeling scheme, the industry will find it easier to obtain electricity from renewable energy sources, reduce its carbon footprint, achieve its sustainability targets, and provide customers a good green industry image. This is positive for improving the investment climate in Indonesia,” added Tumiwa. (Hartatik)

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