ESDM Regulation Encourages Clean Energy for Captive Power Plants

The Ministry of Energy and Mineral Resources (“ ESDM ”) is preparing regulatory support to encourage the increased use of renewable energy for self-generated power plants, or “ Captive Power ”.

“Specifically, it aims to encourage the increased use of renewable energy for Captive Power,” said the Director of Strategic Electricity Development, Andriah Feby Misna.

Feby explained that the significant investment costs for utilizing New and Renewable Energy (Energi Baru dan Terbarukan– “ EBT ”) require the drafting of new regulations capable of providing multiple financing options. Going forward, both fiscal and non-fiscal incentives will be promoted to ensure that the use of electricity from EBT for captive power plants aligns with reliability and economic efficiency considerations.

Feby stated that the integration of captive power systems into the grid needs to be developed as a transitional platform to achieve clean energy mix targets. Such integration requires adjustments in the development of an integrated system, given that captive power exists as an industry response that demands reliability and certainty of energy supply.