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On September 13, 2022, President Joko "Jokowi" Widodo issued Presidential Regulation No. 112 Year 2022 on the Acceleration of Renewable Energy Development to help encourage renewable energy investment in Indonesia. The new regulation introduces a new benchmark price for each type of renewable energy source power - geothermal, hydro, solar, wind and biomass – to be purchased by state-owned electricity firm PT PLN (Persero), taking into account the location factor (F) of the power project. The government will also provide fiscal incentives including financing facilities and ease of licensing in forest areas for renewable energy development.

To support the energy transition plan, the regulation also requires the energy minister to draw up a roadmap to reduce coal-fired power plants’ (PLTUs) greenhouse gas emissions and to accelerate the termination of all coal-fired power plants through to 2050. Companies
may develop new PLTUs under three circumstances: if the plants are dedicated to power refineries or metal smelters; if they’re nationally strategic projects; or if they can commit to cutting greenhouse gas emissions by 35% within 10 years of operation. Indonesia set a goal last year to achieve net-zero emissions by 2060 and pledged to phase down coal use to help limit global warming to less than 1.5 degrees Celsius above pre-industrial levels.

This publication is aimed at disseminating information regarding the regulation to the international community, who needs to know them in English as well as for investors wishing to get involved in Indonesian electricity and its related projects.

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