Friday, February 23, 2024

Challenges for renewable energy projects: TKDN regulations

Reading Time: 2 minutes
Audina Nur




The Ministry of Energy and Mineral Resources (ESDM) reveals that a considerable number of new renewable energy projects are encountering setbacks during the negotiation phase of power purchase agreements (PPA).

The primary reason behind this hurdle is the reluctance of several lenders and business entities to comply with domestic component level (TKDN) regulations in PPAs with PT Perusahaan Listrik Negara (PLN), the state-owned electricity company.

Addressing a press conference in Jakarta on Thursday, January 18, 2024, Director General of Electricity Jisman P. Hutajulu said that some lenders and auction winners were not in favor of TKDN regulations, causing delays in the PPAs. He said further that the Ministry of Industry recently refrained from issuing waivers for certain renewable energy projects, signaling a shift in approach.

Jisman said that discussions with PLN are scheduled for this week to address projects delayed due to TKDN regulations, with the ministry planning to discuss the outcomes to find a solution.

Jisman expressed concern that the failure to address TKDN issues might lead to a shortage in energy development. According to ESDM records, the realization of the renewable energy mix in the first half of 2023 reached only 12.5 percent, significantly below the annual target of 17.9 percent. This achievement aligns closely with the figures from 2022 (12. percent) and 2021 (12.2 percent).

Projections for additional renewable energy mix until the end of 2023 are a mere 115 MW, falling far short of the targeted 2,029 MW. The realization of the renewable energy mix as of April 2023 is reported to be 28.21 MW.

In an effort to boost large-scale renewable energy projects, the Ministry of State-Owned Enterprises (SOEs) aims to initiate auctions for power plants exceeding 1 GW in 2024. However, Deputy SOE Minister Kartika Wirjoatmodjo acknowledges the substantial investment required and the limited financial capacity of PLN and domestic capital. Kartika emphasizes the need for international financing with long-term loans, suggesting collaboration with international banks or organizations to support these large-scale auction projects.

Audina Nur






We will provide you with an invoice for your reimbursable expenses.


New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.


$550 USD/Year


$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email

Add keywords to your market watch and receive notification:
No topics
Schedule a free consultation with us:

We’ll contact you for confirmation.


Iwan Satriawan, a Constitutional Law Professor at the Muhammadiyah University Yogyakarta, has raised concerns about the Constitutional Court’s effectiveness in performing its check and balance duties, stating that the current system has been compromised.
State-owned energy company Pertamina has undertaken a restructuring within its subsidiaries and sub-holdings, appointing Chalid Said Salim as the Chief Executive Officer (CEO) of Pertamina Hulu Energi (PHE).
The Ministry of Energy and Mineral Resources (ESDM) plans to open international tenders to accelerate the development of household gas networks (jargas), which have long been stagnant.
The Ministry of Energy and Mineral Resources (ESDM) is gearing up to initiate a significant infrastructure development endeavor in Batam City, scheduled to commence in July 2024. This ambitious project involves the construction of gas networks (known as jargas) through a collaborative effort between the government and private entities under the Government-Business Partnership (KPBU) framework.
Election Supervisory Agency (Bawaslu) has brought several concerns regarding the organization and vote counting of the 2024 elections, recommending specific measures be taken in 1,496 polling stations (TPS), an equivalent to 0.18 percent of the total 820,161 TPS across the country’s 38 provinces.
An expert at the Presidential hopeful Prabowo Subianto and Gibran Rakabuming Raka team reveals that the pair has devised a plan to establish a new coordinating ministry to manage free lunch and milk program if they are officially declared winner of the 2024 presidential election.