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Regulatory Update: Draft Government Regulation on Electricity Supply Business – Strengthening Energy Sovereignty and Advancing Clean Energy Commitments
by Setyawati Fitrianggraeni and Tiara Amanda Putri
Overview
The Ministry of Law, through the Directorate General of Legislation and the Directorate for Harmonization of Legislation III, recently conducted a plenary harmonization meeting for the Draft Government Regulation on the Electricity Supply Business.(1) This regulatory initiative aligns with the government’s efforts to accelerate the clean energy transition, marked by the launch of 1.3 GW of rooftop solar power projects as an initial step toward the national 100 GW solar energy development target. The initiative also supports energy self-sufficiency and the implementation of PLN’s 2025–2034 Electricity Supply Business Plan (RUPTL).(2)
In supporting these objectives, the draft regulation emphasizes the importance of energy sovereignty by granting primary priority to State-Owned Enterprises (SOEs) in providing electricity for public interest purposes.(3) However, the preparation of strategic plans such as the Electricity Supply Business Plan or Rencana Usaha Penyediaan Tenaga Listrik (RUPTL) continues to receive critical attention from various stakeholders to avoid take-or-pay contract schemes that could potentially impose excessive burdens on state finances. Therefore, this regulation is designed to strike a balance between investment facilitation and the protection of the public’s right to reliable and affordable access to electricity, supported by strict government oversight.(4)
Key Highlights
- Categories of Electricity Business Licenses
Under the draft regulation, electricity business licenses are divided into three categories: licenses for public electricity supply (IUPTLU), licenses for own-use electricity supply (IUPTLS), and EV charging business activities, including public charging stations (SPKLU) and battery swap stations (SPBKLU). Business actors include SOEs, Regional-Owned Enterprises (ROEs), private entities, cooperatives, and individuals, with SOEs receiving priority for public interest purposes as a manifestation of state control. All licenses are issued electronically through the OSS system based on an automated risk assessment, where the IUPTLU is granted for a 30-year term and may be extended, while the IUPTLS is mandatory for power generation facilities with a capacity above 500kW that are connected within a single installation system.(3)
- Business Planning through the RUPTL and Regulatory Mechanisms
The Electricity Supply Business Plan (RUPTL) is a long-term electricity procurement planning document spanning 10 years, or up to 15 years for complex projects such as nuclear and geothermal, serving as the main reference for the development of national electricity infrastructure. Each business entity that has been granted a designated Business Area is required to prepare an RUPTL aligned with the National Electricity General Plan. The document must be approved by the Minister, evaluated at least once a year, and its implementation must consider the state’s financial capacity.(3)
- Acceleration of Energy Transition and Environmental Attributes
This draft regulation introduces the right to “Environmental Attributes” for power plants that utilize new and renewable energy or Energi Baru dan Terbarukan (EBT) or undertake climate change mitigation actions. Holders of IUPTLU and IUPTLS operating renewable energy power plants or implementing emission reduction measures are entitled to the economic benefits of such attributes. These attributes are managed in the form of carbon credits, Renewable Energy Certificates (RECs), and green labels that may be traded, supported by fiscal and non-fiscal incentives as well as streamlined automatic licensing for spatial conformity for National Strategic Projects in the electricity sector.(3)
References
1. Admin PP. Direktorat Jenderal Peraturan Perundang-undangan (DJPP) Kementerian Hukum dan HAM RI. 2026. Harmonisasi RPP Usaha Penyediaan Tenaga Listrik Perkuat Kepastian Hukum dan Dukung Transisi Energi. Available from: https://djpp.kemenkum.go.id/publikasi/indeks-berita/harmonisasi-rpp-usaha-penyediaan-tenaga-listrik-perkuat-kepastian-hukum-dan-dukung-transisi-energi
2. ANTARA NTT. 2026. Indonesia Mempercepat Transisi Energi Bersih Melalui 1,3 GW PLTS Atap. Available from: https://kupang.antaranews.com/berita/188073/indonesia-mempercepat-transisi-energi-bersih-melalui-13-gw-plts-atap
3. Draft Government Regulation of the Republic of Indonesia on Electricity Supply Business or Rancangan Peraturan Pemerintah Republik Indonesia tentang Usaha Penyediaan Tenaga Listrik (RPP UPTL).
4. Manafe A. NNC Netralnews. 2026. SP PLN Ingatkan Publik akan Bahaya RUPTL 2025-2034. Available from: https://www.netralnews.com/sp-pln-ingatkan-publik-akan-bahaya-ruptl-2025-2034/TkRsaktVRWNKY29yN1EwNWZWNEdNdz09
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