METI urges removal of price cap for renewable energy in EBET Bill

By Cepi Setiadi

The Indonesian Renewable Energy Society (METI) has called on the government and the House of Representatives (DPR) to remove the maximum price cap (HPT) for renewable energy in the ongoing discussion of the New and Renewable Energy Bill (EBET Bill). METI argues that the price ceiling mechanism has been one of the main obstacles preventing investment acceleration and Power Purchase Agreement (PPA) finalization for renewable energy projects. The recommendation was delivered by METI Secretary General Paul Butarbutar during a hearing with Commission XII of the Indonesian House of Representatives, Monday (Dec 1).

 “The price cap mechanism creates limitations and difficulties for PLN and developers in determining reasonable pricing. We propose eliminating the price cap and replacing it with an economic pricing mechanism plus a reasonable margin,” Paul said. According to METI, the HPT formula has caused uncertainty and often becomes the reason for delays in signing PPAs, hindering progress toward national renewable energy targets.

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METI also proposed that renewable energy compensation should not depend on the state budget (APBN). Instead, financial support could be sourced from a Renewable Energy Fund, including revenue streams from renewable or fossil energy exports. METI further highlighted the importance of allocating green attributes such as Carbon Credits and Renewable Energy Certificates (REC) to project developers as incentives to improve project bankability. “Green attributes must belong to developers, not the government or PLN. This is an internationally accepted standard and essential to make renewable projects financially viable,” he stressed.

Avoiding carbon lock-in

METI warned that several provisions in the current EBET Bill risk enabling carbon lock-in by failing to give clear priority to renewables. Therefore, METI urged the House to mandate priority dispatch for renewable power plants, including those operating under captive schemes. Paul emphasized that the EBET Bill and the Electricity Bill serve as umbrella legislation and should not include excessive technical details, which could restrict implementation flexibility. “The Bill should focus on high-level principles, while technical provisions should be set through implementing regulations. Without flexible rules, accelerating renewable investment will remain difficult,” Paul said.

Editing by Reiner Simanjuntak