JAKARTA. Ministry of Energy and Mineral Resources (ESDM) released three Minister of ESDM Regulations concurrently. Those three regulations related to the mechanism of electricity purchasing, the gas provisions for power plants, as well as the rules and provisions of the electricity tariff of new renewable energy.

According to the Director General of Electricity at the Ministry of ESDM Jarman, the issuance of Minister of ESDM Regulation No 10/2017 aims at ensuring the equal business risks between independent power producer (IPP) and PT Perusahaan Listrik Negara or PLN (State Owned Electricity Company) as the electricity buyer.

One of the essential points of the new regulation mentions that the agreement of power purchasing will transform to the scheme of build own operate transfer (BOOT). This provision is in line with the Constitutional Court verdict, which stipulates the state control over electricity.

Under the previous regulation, the purchasing agreement applied the scheme of build own operate (BOO). "When the contract expires, (the IPP) has to transfer to PLN,” Jarman said, Thursday (2/2).

Despite of the state control, the electricity investors can obtain some incentives if they can accelerate the commercial on date (COD) of the ongoing electricity project. Conversely, the investors may get a penalty for a delay in project operation.

In terms of gas supplies for steam electricity power plant (PLTU), Minister of ESDM Regulation No.11/2017 confirms that the government will ensure the gas supplies with the normal price through the contract of gas supplies of mine-mouth power plant.

If the domestic gas price has exceeded above 11.5% of crude oil price, the power plant investors will be allowed to import the gas. The regulation also allows the IPP to secure gas supplies in a multi point manner, not in a single point manner. In other words, the gas supplies for a power plant may be transferred to other power plants.

Energy business participants positively responded to the new regulations, despite lack of details. “I am still evaluating (the regulations) and still cannot make comment,” said Aziz Armand, Director of Indika Energy, Thursday (2/2).

Executive Chairman of Indonesian Private Electricity Producers Association (APSLI) Arthur Simatupang appreciated the new regulations as the guidances for investors in formulating the standard of electricity purchasing. “This brings certainties for the investors,” he told KONTAN. Furthermore, Arthur hopes that the government may provide some incentives, such as the fiscal incentive. (Muhammad Farid/Translator)

Editor: Sanny Cicilia