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ARTICLE · 25 MAY 2017

Indonesia's MEMR Regulation 12: A Step Forward Or A Step Back?

A&O Shearman
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Despite a significant renewable energy potential, Indonesia currently only produces six percent of its electricity from renewable energy.

IndonesiaEnergy and Natural Resources

Despite a significant renewable energy potential, Indonesia currently only produces six percent of its electricity from renewable energy.  The Indonesian government is targeting increasing this to 23 percent by 2025.  Many view this as ambitious given the pace at which renewable energy projects have been developed in Indonesia in recent years.

The Indonesian government tried to stimulate investment in renewable energy through higher feed in tariffs in 2014.  While this may have made Indonesian renewable energy projects a more attractive financial proposition for developers, it also gave rise to disagreements between PT PLN (Persero) (PLN) (Indonesia's state-owned sole offtaker) and other stakeholders on certain projects on the basis that prices were too high.1  By the end of 2016, the Indonesian government's attitude to renewable energy generation shifted, with new Indonesian energy minister Ignasius Jonan indicating that there was a need to further reform the

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