Key Variations And Procurement Framework Of Hybrid Power Plants In Indonesia – Minister Of Energy And Mineral Resources Regulation No. 19 Of 2025 On Hybrid Power Plants

On 29 December 2025, the Minister of Energy and Mineral Resources (“MoEMR”) issued MoEMR Regulation No. 19 of 2025 on Hybrid Power Plant (“MoEMR Reg. 19/2025”). The regulation has the objectives to: (i) encourage the implementation of the diesel reduction program; and (ii) provide legal certainty for the development of hybrid power plants connected to small-scale electricity networks.

1. Variations of Hybrid Power Plant

MoEMR Reg. 19/2025 stipulates that Hybrid Power Plant is a source of electricity generated from the configuration of multiple renewable energy sources and/or energy storages implemented on “small-scale networks”, referring to the operation of an independent network of power plants connected to a local distribution network that provides electricity to communities in small islands or isolated areas.

According to Article 3 of MoEMR Reg. 19/2025, at least six combinations of energy types are used in Hybrid Power Plants. They are renewable energy:

1. with other renewable energy sources;
2. with Battery Energy Storage System (“BESS”);
3. with renewable energy sources, and BESS;
4. with new energy and BESS;
5. with non-renewable energy; or
6. and BESS with non-renewable energy.

2. Electricity Procurement Mechanism Through Hybrid Power Plant

MoEMR Reg. 19/2025 specifically mandates PT PLN (Persero) (“PLN”), as the entity responsible for conducting and overseeing the electricity procurement from Hybrid Power Plants.  Pursuant to Article 6 (1) of MoEMR Reg. 19/2025, electricity may be procured from Hybrid Power Plants that combine:

1. Photovoltaic Solar Power Plants (Pembangkit Listrik Tenaga Surya Fotovoltaik or “PLTS Fotovoltaik”) with Biomass Power Plants (Pembangkit Listrik Tenaga Biomassa or “PLTBm”);
2. Hydropower Plants (Pembangkit Listrik Tenaga Air or “PLTA”) with PLTS Fotovoltaik;
3. PLTS Fotovoltaik with BESS;
4. PLTBm with PLTS Fotovoltaik and BESS;
5. Wind Power Plants with PLTS Fotovoltaik and BESS;
6. PLTS Fotovoltaik with Hydrogen Power Plant and BESS;
7. Diesel Power Plants (Pembangkit Tenaga Listrik Diesel or “PLTD”) with Hydrogen Power Plant and BESS; or
8. other power plants as determined by MoEMR.

Several steps in the process of electricity procurement are as follows:

1. Procurement Mechanism

In general, the electricity procurement process is conducted by PLN through direct selection. Pursuant to Articles 7 and 8 of MoEMR Reg. 19/2025, the process is as follows:

1. Selection Procedure: PLN will conduct a direct selection process by prioritizing clusters of power plants to be integrated into a small-scale network.
2. Participation List: To take part in the selection process, business entities must submit their proposals to PLN, which will evaluate the administrative, technical, and financial aspects of these businesses. If, in the direct selection process, only one business entity submits a bid proposal, the process will be deemed unsuccessful and must be restarted. If, on the second attempt, only one business entity again submits a proposal, the procurement process may proceed without requiring another restart.
3. Duration of Selection Process: This direct selection process shall conclude within 180 calendar days after its announcement, up until the signing of the Power Purchase Agreement (“PJBL”) between PLN and the relevant business entity.

2. Tariff for Electricity Procurement

MoEMR Reg. 19/2025 sets out the following tariff mechanism for electricity procurement:

1. Article 9 of MoEMR Reg. 19/2025 specifies that the negotiation price for electricity procurement is based on the highest reference price as the upper limit and the lowest reference price as the lower limit, as stipulated by MoEMR. During the negotiation of the agreed electricity tariff, several factors, terms, and conditions must be taken into account, namely:

1. negotiations shall be conducted within the upper limit of the highest reference price and the lower limit of the lowest reference price;
2. there shall be no further price escalation during the agreed term of the PJBL;
3. any approval of the tariff shall be deemed to constitute the approval of MoEMR; and
4. the location factor shall be taken account as stipulated in a MoEMR decree (where applicable).

2. The agreed tariff shall apply to the purchase of electricity generated by the Hybrid Power Plant. Such tariff shall become effective since the Commercial Operation Date (“COD”), when the plant commences the transmission of electricity to PLN’s transmission or distribution network.

However, the agreed tariff is subject to evaluation every 2 years and any time: (i) when the average tariff is used by PLN under its contracts; and (ii) after further market evaluation. Moreover, MoEMR Reg. 19/2025 also provides a mechanism under which PLN may be granted compensation if the agreed tariff results in an increase in PLN’s cost of electricity supply (Article 10 (4) of MoEMR Reg. 19/2025).

3. Tariff for Electrical Network Facilities

The tariff for the use of electrical facilities is required to connect the Hybrid Power Plant to the local distribution network, where a direct connection is otherwise not possible. The tariff is further determined and agreed upon between the business entity and PLN. However, such tariff shall not exceed 5% of the tariff applied for electricity procurement. Any increase of more than 5% will require the business entity to submit a request for approval to MoEMR (Articles 11 and 12 of MoEMR Reg. 19/2025).

Concluding Remarks

MoEMR Reg. 19/2025 marks an important step in strengthening Indonesia’s regulatory foundation for Hybrid Power Plants. It is particularly a means of accelerating diesel reduction and expanding reliable electricity access in small islands and remote areas. By setting out detailed rules on eligible plant configurations, procurement mechanisms, and tariff, the regulation enhances the legal certainty and creates a more defined pathway for private sector participation. Nevertheless, PLN remains the central player in the overall electricity business scheme, as the development and operation of Hybrid Power Plants ultimately depend on cooperation with PLN through the execution of a PJBL.

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