Revision of Regulation of the President 112/2022 Opens Options for Power Plant Procurement Schemes

The Ministry of Energy and Mineral Resources (“ESDM”) is currently conducting a study on several alternative methods for procuring renewable energy power plants to accelerate the energy transition targets. These alternative procurement methods will eventually become one of the regulatory provisions in the revision of Regulation of the President No. 112 of 2022 on the Acceleration of the Development of Renewable Energy for the Supply of Electrical Power (“Regulation 112/2022”).

“We are currently identifying alternative procurement methods by examining examples from other countries,” said Erick Ta’dung, Coordinator of Renewable Energy Business Development and Supervision at the Ministry of ESDM.

Erick explained that this study involves evaluating current procurement methods while considering various aspects such as technical feasibility, economic viability, risk, and ease of implementation in the field. The procurement models currently under consideration range from reverse auctions and tiered tenders to more systematic framework agreements and competitive dialogues that facilitate interaction between procurement organizers and prospective developers.

Meanwhile, as part of the ongoing revision discussions, the government is reviewing the possibility of using a direct appointment scheme for certain project categories to provide certainty for business entities.