Legal Brief
Strengthening Power Purchase Agreement for
Renewable Energy under MoEMR Reg. 5/2025
APRIL, 2025
A H R P L e g a l B r i e f
INTRODUCTION
The government, through the Minister of Energy and Mineral Resources (“MoEMR”) has enacted Minister of Energy and
Mineral Resources Regulation Number 5 of 2025 on Guidelines for Power-Purchase Agreements from Power Plants that
Utilize Renewable Energy Sources (“MoEMR Reg. 5/2025”). This regulation was promulgated on March 4, 2025, as a strategic
step to more effectively and sustainably support the national clean energy target.
Secretary-General of Ministry of Energy and Mineral Resources, Dadan Kusdiana, explained that this regulation is a follow-up to
the government's vision of achieving national energy resilience. The regulation aims to serve as a guideline for PT Perusahaan
Listrik Negara (Persero) (“PLN”) and independent power producers in drafting Power Purchase Agreement (“PPA”). Additionally,
it provides legal certainty in electricity trading mechanisms, including clarity on the rights and obligations of each party, payment
schemes, risk allocation, and other provisions.
Purpose of Ministry of Energy and Mineral Resources Regulation Number 5 of 2025 on Guidelines for Power-
Purchase Agreements from Power Plants that Utilize Renewable Energy Sources
02 PPL
Who are the parties to the PPA?
PPL is a power supply business entity that
collaborates with PLN through the signing of a power
purchase agreement.
PLN
PPA is a power-purchase agreement between Power
Plant Developer (Pengembang Pembangkit Listrik or
“PPL”) and PLN.
01
Legal Definitions
Art. 1 (3) MoEMR Reg. 5/2025.
PLN is a state-owned enterprise established under
Regulation of the Government Number 23 of 1994
on the Transfer of the Form of Public Company
(Perusahaan Umum/ Perum) of State Electricity into
State Share Company (Persero)
In PPA, PPL shall act as seller and PLN shall act as buyer.
Art. 1 (2) MoEMR Reg. 5/2025.
Art. 1 (19) MoEMR Reg. 5/2025.
Art. 2 (2) MoEMR Reg. 5/2025.
Source: https://www.esdm.go.id/id/media-center/arsip-berita/percepat-pengembangan-pembangkit-ebt-kementerian-esdm-terbitkan-aturan-perjanjian-jual-beli-tenaga-listrik-
Availability Factor (“AF”) is the ratio between the
amount of power production taken or considered to
be taken by PLN and the maximum amount of
electricity production that can be generated in
kilowatt-hours (kWh) based on the net kilowatt
capacity of the power plant according to the test
results during the period agreed in the PPA.
Art. 1 (9) MoEMR Reg. 5/2025.
Commercial Operation Date (“COD”) is the date on
which the power plant begins operating to distribute
electrical energy to the electricity network owned by
PLN.
Art. 1 (8) MoEMR Reg. 5/2025.
Dispatcher is a unit of PLN that implements
system operations dispatch in accordance
with the Grid Code.
Art. 1 (11) MoEMR Reg. 5/2025.
Energi Terbarukan or Renewable Energy is an
energy derived from renewable energy sources.
Art. 1 (1) MoEMR Reg. 5/2025.
Tingkat Komponen Dalam Negeri or Domestic
Component Level (“TKDN”) is the measure of
domestic content in goods, services, or a
combination of goods and services.
Art. 1 (15) MoEMR Reg. 5/2025.
Contracted Energy (“CE”) is the power that must be
produced during the period agreed in the PPA.
Director General of New, Renewable Energy, and Energy Conservation of Ministry of Energy and Mineral Resources, Eniya Listiani Dewi, explained that the background for
issuing MoEMR Reg. 5/2025 was the lack of standardization in PPA contracts, which has often led to divergent interpretations, lengthy and complex negotiations, and
increased transaction costs. These issues have also caused project delays, uncertainties in payment schemes, force majeure mechanisms, and risk-sharing arrangements,
posing risks to the financial stability of developers.
According to Art. 5 MoEMR Reg. 5/2025, MoEMR Reg. 5/2025 revokes the provisions concerning PPAs under Minister of Energy and Mineral Resources Regulation Number
10 of 2017 on Main Provisions on Power Purchase Agreements (“MoEMR Reg.10/2017”), thereby consolidating and updating the legal framework governing renewable energy
procurement to enhance clarity and efficiency.
Deemed Commissioning is a situation where
operating power plant owned by PPL is
deemed to have implemented testing and
commissioning in accordance with the terms
and conditions agreed in the PPA.
Art. 1 (13) MoEMR Reg. 5/2025.
Art. 1 (10) MoEMR Reg. 5/2025.
Liquidated Damages is a penalty for delay in
reaching COD in accordance with the PPA, the
amount of which proportional to the costs
incurred by PLN due to the absence of
promised energy.
Art. 1 (14) MoEMR Reg. 5/2025.
Performance Ratio is a performance
parameter that must be met by a power plant.
Art. 1 (4) MoEMR Reg. 11/2024
RENEWABLE PLANT
A H R P L e g a l B r i e f
PPA from power plants that utilize Renewable Energy sources shall at least contain provisions on:
Period of PPA
Rights and Obligations of PPL and
PLN
Risk Allocation
Project Implementation Guarantee
Commissioning and COD
Certification of Electric Power
Installation
Power Plant Performance
Power System Operation Control
Power Purchase Transaction
Termination of PPA
Transfer of Rights
Force Majeure
Dispute Settlement
Price and Price Adjustment
Requirements
Use of Domestic Products
Environmental Attributes or
Carbon Economic Value
Language of PPA
Refinancing
a.
b.
c.
d.
e.
f.
h.
g.
i.
j.
k.
l.
m.
n.
p.
q.
r.
o.
Excluded for excess power purchase (the purchase of excess electricity by PLN from power plants that have excess
production)
Art. 4 (1) and (2) MoEMR Reg. 5/2025.
In addition to the provisions as referred to point a – r above, PPA may contain
the following matters:
▪ provisions on fuel supply for biomass power plant, biogas power plant, biofuel
power plant, or geothermal power plant; and/or
Art. 4 (3) MoEMR Reg. 5/2025.
In addition to the provisions as mentioned above, PPA may add other
provisions agreed upon on a business-to-business basis agreed by
PPL and PLN.
Art. 4 (4) MoEMR Reg. 5/2025.
Period of PPA
▪ PPA shall be implemented for the maximum period of 30 years starting
from COD implementation and can be extended without taking into
account the initial investment cost.
▪ The period of PPA shall be determined by PLN by considering project
economic level and type of power plant used.
▪ In the event PPA is extended, the selling price of power for the extension
of period PPA shall refer to the highest benchmark price after 10th (tenth)
year (staging 2) in accordance with the provisions of laws and regulations.
Art. 5 MoEMR Reg. 5/2025.
The construction and operation pattern in PPA
shall use:
Build, Own, Operate (BOO); or Other constructions patterns.
a b
The construction and operation pattern in PPA are determined by the agreement of
the parties by considering the type of power plant.
Art. 6 MoEMR Reg. 5/2025.
1
2
3
a.
special provisions for intermittent Renewable Energy power plants.
b.
Types of Renewable Plant
In addition to power plants as
referred to point a – h, power
plants that utilize Renewable
Energy sources can be in the form
of waste-based power plants.
Geothermal Power
Plant
Hydropower Plant
Solar Photovoltaic
Power Plant
Wind Power Plant
Biomass Power
Plant
Biogas Power Plant
Marine Energy
Power Plant
Bio-fuel Power Plant
a
e
d
c
b
h
g
f
The Power Plant that can be equipped with battery facilities or other energy storage facilities.
Art. 3 (1) and (2) MoEMR Reg. 5/2025.
PPA KEY POINTS (1/6)
PPA KEY POINTS (2/6)
Rights and Obligations of PPL
a. receive payment related to the selling price of power; and
b. receive payment for Deemed Dispatch*.
Rights of PPL
Obligations of PPL
a. provide, deliver, and sell power to PLN as set out in the PPA;
b. provide performance security;
c. achieve COD and achieve milestone of the project as set out in
PPA;
d. fulfill the Performance Ratio during the operational period of the
power plant;
e. submit monthly and/or annual power supply chain;
f. fulfill all necessary licensing;
g. fulfill provisions on the use of domestic product;
h. maintain the continuity of power supply during the period of
PPA; and
i. pay fines, sanctions, taxes and/or other obligations determined
by the Government in accordance with the provisions of laws
and regulations.
RIGHTS AND OBLIGATIONS
Rights and Obligations of PLN
Further provisions on both PLN and PPL's rights and obligations shall be
agreed upon and set out in the PPA.
RISK ALLOCATION
Rights of PLN
Obtain reliable and sustainable power distribution.
Obligations of PPL
a. absorb and buy power produced by PPL as set out
in PPA during the period of PPA;
b. pay the power which is not absorbed because of
Deemed Dispatch due to certain condition from
PLN based on applicable grace period as set out in
the PPA; and
c. maintain and keep the reliability of PLN power
network facility to receive power from PPL.
Art. 8 (1) MoEMR Reg. 5/2025
Art. 8 (2) MoEMR Reg 5/2025
Art. 7 (1) MoEMR Reg. 5/2025
Art. 7 (2) MoEMR Reg. 5/2025
Art. 7 (2) jo. Art. 8 (3) MoEMR Reg 5/2025
A H R P L e g a l B r i e f
Risk PPL PLN
Land acquisition
Licensing, including environmental permits and conformity to spatial utilization
Accuracy of construction schedule
Currency convertibility
Currency exchange rate volatility
Power plant performance
Availability and cost of fuel for biomass power plant, biogas power plant, biofuel power plant, or geothermal power
plant
Demand of the power or load
Readiness and capability of transmission and distribution
Deemed Dispatch is a situation where operating power
plant owned by PPL is deemed to be delivering energy
into the PLN Power System in accordance with the
terms and conditions set out in the PPA.
Art. 1 (12) MoEMR Reg. 5/2025
* Deemed Dispatch
Art. 9 MoEMR Reg. 5/2025.
A H R P L e g a l B r i e f
PPL is required to provide a project implementation guarantee of up to 10% of the total project cost. This guarantee may be divided into a maximum of
three instruments, with the mechanism and disbursement terms detailed in the PPA, taking into account the maximum value of Liquidated Damages. All
guarantees must be submitted at the effective date of the agreement.
Commissioning and COD must follow applicable electricity regulations. For geothermal plants, COD may be conducted in stages, based on the availability
of steam, until the required CE or AF is reached.
Art. 10 MoEMR Reg. 5/2025
Art. 12 MoEMR Reg. 5/2025
In cases where COD is delayed and the plant is not in a Deemed Commissioning state, the PPL will incur daily Liquidated Damages up to a maximum of
180 calendar days. These penalties are proportionate to the project cost. If the delay is attributable to PLN and the project is deemed commissioned, PPL is
entitled to payment for electricity starting from the deemed COD date. Art. 14 MoEMR Reg. 5/2025
PPA KEY POINTS (3/6)
Commissioning and COD
Project Implementation Guarantee
Liquidated Damages for COD Delay
Geothermal Specific Obligations
For geothermal power producers, compliance with the PPA is strictly mandated. Any failure to fulfill the agreed provisions will result in financial penalties,
as specified in the PPA.
Grid and Distribution Code Compliance
Art. 11 MoEMR Reg. 5/2025
All renewable power plants must operate in accordance with the Grid Code and Distribution Code, ensuring technical reliability and integration into PLN’s
system. Art. 13 MoEMR Reg. 5/2025
Certification of Electric Power Installation
Certification of power installation for power plant that utilize Renewable Energy sources shall be implemented in accordance with the provisions of laws
and regulations in the electricity sector. Art. 15 MoEMR Reg. 5/2025
Grid Code is a series of dynamic and adaptive rules, requirements, and
standards to ensure a safe, reliable, and efficient Power System network in
meeting the needs of power supply.
*
Art. 1 (6) MoEMR Reg. 5/2025
* Distribution Code is a set of regulations, requirements, and
standards to guarantee the safety, reliability, and operation and
development of an efficient distribution system in meeting the
increasing demand for power.
Art. 1 (7) MoEMR Reg. 5/2025
Regulation No. 5/2025 sets a cap on the imposition period of Liquidated Damages (180 days), which allows the performance bond amount to be
determined in advance, ensuring that it is not less than the total potential Liquidated Damages. Considering that the same regulation limits the total
amount of the performance bond to a maximum of 10% of the project cost, it can be interpreted that the total Liquidated Damages may also not exceed
10% of the project cost.
Notwithstanding the absence of provisions governing performance guarantees under MoEMR Reg. 10/2017, in practice PPL have been contractually
obligated to furnish such guarantees to PLN. The performance guarantees provision under MoEMR Reg. 5/2025 now provides PLN with enhanced
contractual certainty regarding the procurement of such guarantees from PPL.
System Operation Control
Art. 20 and Art. 21 MoEMR Reg. 5/2025
A H R P L e g a l B r i e f
PPA KEY POINTS (4/6)
Electricity Sale & Purchase
Art. 16 MoEMR Reg. 5/2025
Performance Criteria
Art. 22 MoEMR Reg. 5/2025
Art. 17 MoEMR Reg. 5/2025
Art. 18 MoEMR Reg. 5/2025
Art. 19 MoEMR Reg. 5/2025
Art. 23 MoEMR Reg. 5/2025
Art. 24 MoEMR Reg. 5/2025
Contract Termination
Art. 25 MoEMR Reg. 5/2025
Shareholding Transfers
Art. 26 and Art. 27 MoEMR Reg. 5/2025
PLN is required to purchase electricity based on the CE or AF at
regulated tariffs. Surplus energy may be procured up to the unit’s
rated capacity, at a maximum of 80% of the PPA tariff, and
subject to local grid needs. Additionally, PLN may purchase up to
30% above the CE/AF for optimization purposes, applying the
lowest applicable tariff.
If electricity cannot be delivered due to Deemed Dispatch caused
by PLN’s fault or system constraints, PLN remains obligated to
pay. However, if the under-delivery is attributable to PPL,
penalties will be imposed based on the shortfall.
Deemed Dispatch applies when PLN restricts delivery
(curtailment) due to maintenance or emergency. No payment if
PPL causes the curtailment (e.g., Grid Code violations).
Payment is made in Rupiah, using Jakarta Interbank Spot Dollar
Rate (“JISDOR”) exchange rate applicable one day prior to the
payment date (D-1). Payment schedule and methods are
defined in the PPA.
PPL must meet performance criteria (AF, CE, PR). Failure
may result in penalties unless caused by Deemed Dispatch.
Penalties may be applied in cases of underperformance in AF
or CE, failure to meet Volt-Ampere Reactive (“VAR”)
requirements, grid frequency deviations, or insufficient ramp
rate affecting load flexibility.
Penalty calculations are determined based on the shortfall in
kWh or VAR and the applicable unit penalty rates. For
intermittent power plants such as solar, wind, and ocean-
based facilities, CE/AF penalties are assessed annually. Any
penalties incurred are deducted directly from the monthly
invoice.
Dispatchers manage operations in accordance with
the Grid Code and Distribution Code, with priority
given to renewable power plants, subject to technical
constraints and the dispatch arrangements outlined in
the PPAs.
The provision on the use of JISBOR exchange rate is in line with Presidential Regulation Number 112 of 2022 on the Acceleration of Renewable
Energy Development for Electricity Supply (“PR 112/2022”). As a reference, the JISDOR exchange rate as of April 11, 2025 is Rp16.805,00.
PPA may be terminated upon expiration of its term,
in the event of a default or financing failure, if the
PPL declares bankruptcy, or due to force majeure
or other mutually agreed circumstances.
Termination of the PPA by one of the parties due to
breach of contract (default) may be effected when
the calculation of Liquidated Damages has reached
the maximum value.
For geothermal projects, the PPA also terminates
upon the expiry of the geothermal license. All
terminations must be reported to the MoEMR and
the relevant Directorates.
Share transfers prior to the COD are prohibited,
except in cases of transfers to affiliates with more
than 90% ownership or step-in rights exercised
by lenders in the event of a PPL default. Such
transfers require prior approval from PLN and
must be reported to the MoEMR. For geothermal
projects, relevant provisions under geothermal
law shall apply.
Art. 13 PR 112/2022 and source: https://www.bi.go.id/en/statistik/informasi-kurs/jisdor/default.aspx?utm_source=chatgpt.com
Dispute Resolution
Art. 30 MoEMR Reg. 5/2025
A H R P L e g a l B r i e f
PPA KEY POINTS (5/6)
Art. 31 MoEMR Reg. 5/2025
Domestic Content
Force Majeure
Art. 32 MoEMR Reg. 5/2025
Art. 33 MoEMR Reg. 5/2025 jo. MoEMR Reg. 11/2024
Environmental Attributes & Carbon Value
Art. 34 MoEMR Reg. 5/2025
Art. 29 MoEMR Reg. 5/2025
The price may be adjusted to reflect tax, environmental, or
obligations, as well as other mutually agreed changes. Approval
from the MoEMR is considered implied if the adjusted price
remains within the benchmark cap, but explicit approval is
required if the price is based on a negotiated agreement.
For geothermal, pre-agreed prices in early-stage agreements
may be revised post-exploration, based on benchmark and
MoEMR approval.
Art. 28 MoEMR Reg. 5/2025
Price Adjustment
Events such as war, natural disasters, pandemics, or
unexpected discoveries—such as archaeological
objects—are considered qualifying force majeure events.
The determination of such events lies with the relevant
authority or the MoEMR In such cases, the COD and the
duration of the PPA may be extended to account for
delays. During the period of force majeure, parties are
excused from fulfilling their contractual obligations.
Renewable energy plants generate environmental attributes and carbon economic value, including carbon credits, renewable energy
certifications, green or environmental labels, and other tradable benefits arising from emission reductions. These rights are legally
recognized as part of the value derived from Renewable Energy operations. Where regulations exist, the treatment and ownership of these
rights must comply with the applicable legal framework, including Presidential Regulation Number 98 of 2021 on the Implementation of
Carbon Economic Value to Achieve Nationally Determined Contribution Targets and Control over Greenhouse Gas Emissions in Relation to
National Development, as well as Minister of Environment and Forestry Regulation Number 21 of 2022 on Procedures for the Application of
Carbon Economic Value.
In the absence of such regulations, the rights may be contractually assigned between the parties and documented in the PPA, specifying
terms of ownership, use, and potential revenue. This provision reflects a forward-looking approach, enabling developers and PLN to
leverage emerging opportunities in carbon and sustainability markets.
All disputes must initially be resolved through amicable
settlement within 30 days. If necessary, experts may be
appointed to assist in the resolution process, which may
extend the settlement period to a maximum of 150 days.
If a dispute remains unresolved after the amicable
settlement process, it may be brought before a court or
submitted to arbitration, in accordance with the terms
outlined in the PPA. The final decision resulting from
either process shall be binding on the parties.
MoEMR Reg. 5/2025 requires that the development of
Renewable Energy power plants must comply with prevailing
laws on the use of domestic products. This provision is
implemented in practice through Minister of Energy and Mineral
Resources Regulation Number 11 of 2024 on The Use of
Domestic Products for Electricity Infrastructure Development
(“MoEMR Reg. 11/2024”), which sets out the technical framework
for domestic content obligations in electricity infrastructure
projects.
Minimum domestic content values are set via a roadmap by the
Directorate General of New, Renewable Energy, and Energy
Conservation of Ministry of Energy and Mineral Resources, and
must be verified by an independent party before project
handover. Non-compliance may lead to administrative sanctions
that must be reflected in the PPA.
Dispute forums regulated in PPA are commonly Singapore
International Arbitration Centre (SIAC) or International Chamber of
Commerce (ICC), depending on the parties' agreement.
A H R P L e g a l B r i e f
Refinancing
Fuel Supplies
To optimize the implementation of power supply activities utilizing Renewable
Energy sources, PPL may conduct refinancing. This refinancing refers to a
financing review activity carried out between PPL and the lender. PPL is
required to inform PLN regarding the implementation of such refinancing.
The MoEMR is responsible for guiding and supervising the implementation and fulfillment of PPA provisions, applicable to both PPL and PLN.
Guidance may include consultation, dissemination, information sharing, problem-solving facilitation, and other necessary forms of support.
Supervision covers both the preparation and implementation stages of the PPA. PLN must report each Renewable Energy-based power purchase to
the MoEMR within 5 business days of PPA signing, including the PPL’s business registration number, cost structure, financial model, and other
required information. Additionally, PLN must submit semi-annual reports on project development progress and the use of domestic products until the
COD.
Language in PPA
The PPA shall be drawn up using the Indonesian language. If necessary, it
may be prepared in two languages, namely Indonesian and a foreign
language. In the event of a difference in interpretation between the two
versions, the language to be used shall be the one agreed upon in the PPA.
Art. 35 MoEMR Reg. 5/2025
Art. 36 MoEMR Reg. 5/2025
Intermittent Renewable Energy Power Plant
PLN shall guarantee the availability of fuel supplies for types of power plants
that utilize Renewable Energy sources for: (a) biomass power plant;
(b) biogas power plant; (c) biofuel power plant; and (d) geothermal power
plant. The MoEMR Reg. 10/2017 does not regulate PLN’s guarantee the
availability of such fuel supplies.
PPL is required to submit monthly and annual energy production estimates
from power plants utilizing intermittent Renewable Energy sources to PLN.
These estimates must be based on historical data, supported by adequate
data collection facilities, use methods approved by the Dispatcher, and follow
applicable standards. Projections must be accurate within an agreed margin
of error to minimize the need for system reserves.
Art. 37 MoEMR Reg. 5/2025
If a power plant using intermittent Renewable Energy is equipped with battery
or other energy storage facilities, the power purchase transaction is based on
the total energy recorded at the transaction point, from both the plant and the
storage. These storage facilities are considered an integral part of the power
plant.
PLN must replace storage facilities that reach the end of their lifecycle with
new ones of equal or better technology. The replacement cost shall be borne
by PPL.
Guidance and Supervision
Art. 38 MoEMR Reg. 5/2025
Art. 39 MoEMR Reg. 5/2025
Art. 40 MoEMR Reg. 5/2025
Art. 41-45 MoEMR Reg. 5/2025
Other Notable Provisions
The PPA provisions in this MoEMR Reg.
5/2025 serve as a reference for:
a. the preparation of PPA for power plants
utilizing Renewable Energy sources not
covered under Article 3 of MoEMR Reg.
5/2025;
b. the preparation of PPA between PPL and
business entities holding electricity
business areas other than PLN; and
c. the preparation of PPA between business
entities holding electricity business areas
and PPL’s utilizing new energy sources.
The PPA provisions in MoEMR Reg. 5/2025
cannot be used as a reference for preparing
power purchase agreements related to excess
power between PLN and holders of electricity
supply licenses for self-use. Such agreements
must be prepared based on mutual
agreement between the parties.
Upon the enactment of MoEMR Reg. 5/2025,
existing PPAs for Renewable Energy power
plants signed beforehand remain valid until
expiry, with any extensions subject to the new
regulation. Ongoing procurement processes
up to the proposal submission phase will follow
previous rules. Electricity purchases
exceeding CE or AF, or for plant optimization
under existing PPAs, may be made through
supplementary agreements. Additionally, the
principle of least-cost electricity procurement to
meet projected demand for purchases
exceeding CE or AF shall follow the provisions
of the MoEMR Reg. 5/2025.
Art. 46 MoEMR Reg. 5/2025 Art. 47 MoEMR Reg. 5/2025 Art. MoEMR Reg. 5/2025
PPA KEY POINTS (6/6)
CONCLUSION
A H R P L e g a l B r i e f
• PPA Provision Scope of Usage.
• PPA Extension.
• Amount of Performance Guarantee.
• AF or CE Penalty Payment.
• Geothermal Power Plant (PPA) Price
Adjustment.
• Deemed Dispatch due to curtailment.
• Purchase of electricity exceeding CE or AF,
and purchase for plant optimization.
• PPA COD.
• Use of Domestic Content.
• Rights to Environmental Attributes/Carbon
Economic Value.
• Intermittent Renewable Energy Power Plants.
• Special transactions if Renewable Power
Plants have energy storage facilities.
• Refinancing.
• Language in PPA.
14
10
• Regulated types of renewable energy
technology.
• Cooperation schemes.
• Electricity tariff adjustment.
• PPA expiration.
• Regulation of rights and obligations,
risk allocation, types and amounts of
penalties.
• Planning and implementation of
system operations (dispatch system).
• Force majeure.
• Dispute resolution.
• Fuel supply.
New Provisions
Refined Provisions from
MoEMR Reg. 10/2017
The MoEMR Reg. 5/2025 introduces several improvements aimed at strengthening the investment climate and enhancing the implementation of
renewable energy projects, as follows:
Foreign exchange risk is borne by PLN through
payments pegged to the JISDOR exchange rate. For
geothermal projects, exploration-related risks are
acknowledged, with price adjustments allowed
based on the exploration period and applicable
pricing benchmarks.
Increased Clarity
Promotion of Carbon Monetization
Flexible Excess Energy Mechanism
Refined Risk Allocation Approach
The regulation thoroughly outlines both technical and
commercial aspects of PPAs, helping to reduce
uncertainty and build investor confidence.
Grants recognition of rights to carbon credits and
renewable energy certificates, unlocking new business
opportunities for PPLs.
Allows PLN to purchase electricity beyond
contracted volumes at a predetermined price (up to
80% of the PPA rate), enabling more efficient
capacity utilization.
Additional regulations and more detailed provisions in PPAs are advised to better incentivize renewable energy development.
Following an analysis of the MoEMR Reg. 5/2025, it can be concluded that the regulation introduces both newly established provisions and
refinements to provision regulated in MoEMR Reg. 10/2017, as follows:
We will continue to follow the developments on this topic and provide additional information as it
becomes available. If you have any questions on this topic, please contact:
Muhammad Farisi
farisi@ahrplaw.com
Valen Diyen
valen@ahrplaw.com
This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not
intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee
concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it
applies to your circumstances before deciding to take any action.
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Jl Mega Kuningan Barat No. 3
Jakarta 12950 Indonesia
P: +6221 50917915
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E: office@ahrplaw.com
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Indira Wahyu Prameswari
prameswari@ahrplaw.com

AHRP LB - Strengthening Power Purchase Agreement for Renewable Energy under MoEMR Reg. 52025.pdf

  • 1.
    Legal Brief Strengthening PowerPurchase Agreement for Renewable Energy under MoEMR Reg. 5/2025 APRIL, 2025
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    A H RP L e g a l B r i e f INTRODUCTION The government, through the Minister of Energy and Mineral Resources (“MoEMR”) has enacted Minister of Energy and Mineral Resources Regulation Number 5 of 2025 on Guidelines for Power-Purchase Agreements from Power Plants that Utilize Renewable Energy Sources (“MoEMR Reg. 5/2025”). This regulation was promulgated on March 4, 2025, as a strategic step to more effectively and sustainably support the national clean energy target. Secretary-General of Ministry of Energy and Mineral Resources, Dadan Kusdiana, explained that this regulation is a follow-up to the government's vision of achieving national energy resilience. The regulation aims to serve as a guideline for PT Perusahaan Listrik Negara (Persero) (“PLN”) and independent power producers in drafting Power Purchase Agreement (“PPA”). Additionally, it provides legal certainty in electricity trading mechanisms, including clarity on the rights and obligations of each party, payment schemes, risk allocation, and other provisions. Purpose of Ministry of Energy and Mineral Resources Regulation Number 5 of 2025 on Guidelines for Power- Purchase Agreements from Power Plants that Utilize Renewable Energy Sources 02 PPL Who are the parties to the PPA? PPL is a power supply business entity that collaborates with PLN through the signing of a power purchase agreement. PLN PPA is a power-purchase agreement between Power Plant Developer (Pengembang Pembangkit Listrik or “PPL”) and PLN. 01 Legal Definitions Art. 1 (3) MoEMR Reg. 5/2025. PLN is a state-owned enterprise established under Regulation of the Government Number 23 of 1994 on the Transfer of the Form of Public Company (Perusahaan Umum/ Perum) of State Electricity into State Share Company (Persero) In PPA, PPL shall act as seller and PLN shall act as buyer. Art. 1 (2) MoEMR Reg. 5/2025. Art. 1 (19) MoEMR Reg. 5/2025. Art. 2 (2) MoEMR Reg. 5/2025. Source: https://www.esdm.go.id/id/media-center/arsip-berita/percepat-pengembangan-pembangkit-ebt-kementerian-esdm-terbitkan-aturan-perjanjian-jual-beli-tenaga-listrik- Availability Factor (“AF”) is the ratio between the amount of power production taken or considered to be taken by PLN and the maximum amount of electricity production that can be generated in kilowatt-hours (kWh) based on the net kilowatt capacity of the power plant according to the test results during the period agreed in the PPA. Art. 1 (9) MoEMR Reg. 5/2025. Commercial Operation Date (“COD”) is the date on which the power plant begins operating to distribute electrical energy to the electricity network owned by PLN. Art. 1 (8) MoEMR Reg. 5/2025. Dispatcher is a unit of PLN that implements system operations dispatch in accordance with the Grid Code. Art. 1 (11) MoEMR Reg. 5/2025. Energi Terbarukan or Renewable Energy is an energy derived from renewable energy sources. Art. 1 (1) MoEMR Reg. 5/2025. Tingkat Komponen Dalam Negeri or Domestic Component Level (“TKDN”) is the measure of domestic content in goods, services, or a combination of goods and services. Art. 1 (15) MoEMR Reg. 5/2025. Contracted Energy (“CE”) is the power that must be produced during the period agreed in the PPA. Director General of New, Renewable Energy, and Energy Conservation of Ministry of Energy and Mineral Resources, Eniya Listiani Dewi, explained that the background for issuing MoEMR Reg. 5/2025 was the lack of standardization in PPA contracts, which has often led to divergent interpretations, lengthy and complex negotiations, and increased transaction costs. These issues have also caused project delays, uncertainties in payment schemes, force majeure mechanisms, and risk-sharing arrangements, posing risks to the financial stability of developers. According to Art. 5 MoEMR Reg. 5/2025, MoEMR Reg. 5/2025 revokes the provisions concerning PPAs under Minister of Energy and Mineral Resources Regulation Number 10 of 2017 on Main Provisions on Power Purchase Agreements (“MoEMR Reg.10/2017”), thereby consolidating and updating the legal framework governing renewable energy procurement to enhance clarity and efficiency. Deemed Commissioning is a situation where operating power plant owned by PPL is deemed to have implemented testing and commissioning in accordance with the terms and conditions agreed in the PPA. Art. 1 (13) MoEMR Reg. 5/2025. Art. 1 (10) MoEMR Reg. 5/2025. Liquidated Damages is a penalty for delay in reaching COD in accordance with the PPA, the amount of which proportional to the costs incurred by PLN due to the absence of promised energy. Art. 1 (14) MoEMR Reg. 5/2025. Performance Ratio is a performance parameter that must be met by a power plant. Art. 1 (4) MoEMR Reg. 11/2024
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    RENEWABLE PLANT A HR P L e g a l B r i e f PPA from power plants that utilize Renewable Energy sources shall at least contain provisions on: Period of PPA Rights and Obligations of PPL and PLN Risk Allocation Project Implementation Guarantee Commissioning and COD Certification of Electric Power Installation Power Plant Performance Power System Operation Control Power Purchase Transaction Termination of PPA Transfer of Rights Force Majeure Dispute Settlement Price and Price Adjustment Requirements Use of Domestic Products Environmental Attributes or Carbon Economic Value Language of PPA Refinancing a. b. c. d. e. f. h. g. i. j. k. l. m. n. p. q. r. o. Excluded for excess power purchase (the purchase of excess electricity by PLN from power plants that have excess production) Art. 4 (1) and (2) MoEMR Reg. 5/2025. In addition to the provisions as referred to point a – r above, PPA may contain the following matters: ▪ provisions on fuel supply for biomass power plant, biogas power plant, biofuel power plant, or geothermal power plant; and/or Art. 4 (3) MoEMR Reg. 5/2025. In addition to the provisions as mentioned above, PPA may add other provisions agreed upon on a business-to-business basis agreed by PPL and PLN. Art. 4 (4) MoEMR Reg. 5/2025. Period of PPA ▪ PPA shall be implemented for the maximum period of 30 years starting from COD implementation and can be extended without taking into account the initial investment cost. ▪ The period of PPA shall be determined by PLN by considering project economic level and type of power plant used. ▪ In the event PPA is extended, the selling price of power for the extension of period PPA shall refer to the highest benchmark price after 10th (tenth) year (staging 2) in accordance with the provisions of laws and regulations. Art. 5 MoEMR Reg. 5/2025. The construction and operation pattern in PPA shall use: Build, Own, Operate (BOO); or Other constructions patterns. a b The construction and operation pattern in PPA are determined by the agreement of the parties by considering the type of power plant. Art. 6 MoEMR Reg. 5/2025. 1 2 3 a. special provisions for intermittent Renewable Energy power plants. b. Types of Renewable Plant In addition to power plants as referred to point a – h, power plants that utilize Renewable Energy sources can be in the form of waste-based power plants. Geothermal Power Plant Hydropower Plant Solar Photovoltaic Power Plant Wind Power Plant Biomass Power Plant Biogas Power Plant Marine Energy Power Plant Bio-fuel Power Plant a e d c b h g f The Power Plant that can be equipped with battery facilities or other energy storage facilities. Art. 3 (1) and (2) MoEMR Reg. 5/2025. PPA KEY POINTS (1/6)
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    PPA KEY POINTS(2/6) Rights and Obligations of PPL a. receive payment related to the selling price of power; and b. receive payment for Deemed Dispatch*. Rights of PPL Obligations of PPL a. provide, deliver, and sell power to PLN as set out in the PPA; b. provide performance security; c. achieve COD and achieve milestone of the project as set out in PPA; d. fulfill the Performance Ratio during the operational period of the power plant; e. submit monthly and/or annual power supply chain; f. fulfill all necessary licensing; g. fulfill provisions on the use of domestic product; h. maintain the continuity of power supply during the period of PPA; and i. pay fines, sanctions, taxes and/or other obligations determined by the Government in accordance with the provisions of laws and regulations. RIGHTS AND OBLIGATIONS Rights and Obligations of PLN Further provisions on both PLN and PPL's rights and obligations shall be agreed upon and set out in the PPA. RISK ALLOCATION Rights of PLN Obtain reliable and sustainable power distribution. Obligations of PPL a. absorb and buy power produced by PPL as set out in PPA during the period of PPA; b. pay the power which is not absorbed because of Deemed Dispatch due to certain condition from PLN based on applicable grace period as set out in the PPA; and c. maintain and keep the reliability of PLN power network facility to receive power from PPL. Art. 8 (1) MoEMR Reg. 5/2025 Art. 8 (2) MoEMR Reg 5/2025 Art. 7 (1) MoEMR Reg. 5/2025 Art. 7 (2) MoEMR Reg. 5/2025 Art. 7 (2) jo. Art. 8 (3) MoEMR Reg 5/2025 A H R P L e g a l B r i e f Risk PPL PLN Land acquisition Licensing, including environmental permits and conformity to spatial utilization Accuracy of construction schedule Currency convertibility Currency exchange rate volatility Power plant performance Availability and cost of fuel for biomass power plant, biogas power plant, biofuel power plant, or geothermal power plant Demand of the power or load Readiness and capability of transmission and distribution Deemed Dispatch is a situation where operating power plant owned by PPL is deemed to be delivering energy into the PLN Power System in accordance with the terms and conditions set out in the PPA. Art. 1 (12) MoEMR Reg. 5/2025 * Deemed Dispatch Art. 9 MoEMR Reg. 5/2025.
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    A H RP L e g a l B r i e f PPL is required to provide a project implementation guarantee of up to 10% of the total project cost. This guarantee may be divided into a maximum of three instruments, with the mechanism and disbursement terms detailed in the PPA, taking into account the maximum value of Liquidated Damages. All guarantees must be submitted at the effective date of the agreement. Commissioning and COD must follow applicable electricity regulations. For geothermal plants, COD may be conducted in stages, based on the availability of steam, until the required CE or AF is reached. Art. 10 MoEMR Reg. 5/2025 Art. 12 MoEMR Reg. 5/2025 In cases where COD is delayed and the plant is not in a Deemed Commissioning state, the PPL will incur daily Liquidated Damages up to a maximum of 180 calendar days. These penalties are proportionate to the project cost. If the delay is attributable to PLN and the project is deemed commissioned, PPL is entitled to payment for electricity starting from the deemed COD date. Art. 14 MoEMR Reg. 5/2025 PPA KEY POINTS (3/6) Commissioning and COD Project Implementation Guarantee Liquidated Damages for COD Delay Geothermal Specific Obligations For geothermal power producers, compliance with the PPA is strictly mandated. Any failure to fulfill the agreed provisions will result in financial penalties, as specified in the PPA. Grid and Distribution Code Compliance Art. 11 MoEMR Reg. 5/2025 All renewable power plants must operate in accordance with the Grid Code and Distribution Code, ensuring technical reliability and integration into PLN’s system. Art. 13 MoEMR Reg. 5/2025 Certification of Electric Power Installation Certification of power installation for power plant that utilize Renewable Energy sources shall be implemented in accordance with the provisions of laws and regulations in the electricity sector. Art. 15 MoEMR Reg. 5/2025 Grid Code is a series of dynamic and adaptive rules, requirements, and standards to ensure a safe, reliable, and efficient Power System network in meeting the needs of power supply. * Art. 1 (6) MoEMR Reg. 5/2025 * Distribution Code is a set of regulations, requirements, and standards to guarantee the safety, reliability, and operation and development of an efficient distribution system in meeting the increasing demand for power. Art. 1 (7) MoEMR Reg. 5/2025 Regulation No. 5/2025 sets a cap on the imposition period of Liquidated Damages (180 days), which allows the performance bond amount to be determined in advance, ensuring that it is not less than the total potential Liquidated Damages. Considering that the same regulation limits the total amount of the performance bond to a maximum of 10% of the project cost, it can be interpreted that the total Liquidated Damages may also not exceed 10% of the project cost. Notwithstanding the absence of provisions governing performance guarantees under MoEMR Reg. 10/2017, in practice PPL have been contractually obligated to furnish such guarantees to PLN. The performance guarantees provision under MoEMR Reg. 5/2025 now provides PLN with enhanced contractual certainty regarding the procurement of such guarantees from PPL.
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    System Operation Control Art.20 and Art. 21 MoEMR Reg. 5/2025 A H R P L e g a l B r i e f PPA KEY POINTS (4/6) Electricity Sale & Purchase Art. 16 MoEMR Reg. 5/2025 Performance Criteria Art. 22 MoEMR Reg. 5/2025 Art. 17 MoEMR Reg. 5/2025 Art. 18 MoEMR Reg. 5/2025 Art. 19 MoEMR Reg. 5/2025 Art. 23 MoEMR Reg. 5/2025 Art. 24 MoEMR Reg. 5/2025 Contract Termination Art. 25 MoEMR Reg. 5/2025 Shareholding Transfers Art. 26 and Art. 27 MoEMR Reg. 5/2025 PLN is required to purchase electricity based on the CE or AF at regulated tariffs. Surplus energy may be procured up to the unit’s rated capacity, at a maximum of 80% of the PPA tariff, and subject to local grid needs. Additionally, PLN may purchase up to 30% above the CE/AF for optimization purposes, applying the lowest applicable tariff. If electricity cannot be delivered due to Deemed Dispatch caused by PLN’s fault or system constraints, PLN remains obligated to pay. However, if the under-delivery is attributable to PPL, penalties will be imposed based on the shortfall. Deemed Dispatch applies when PLN restricts delivery (curtailment) due to maintenance or emergency. No payment if PPL causes the curtailment (e.g., Grid Code violations). Payment is made in Rupiah, using Jakarta Interbank Spot Dollar Rate (“JISDOR”) exchange rate applicable one day prior to the payment date (D-1). Payment schedule and methods are defined in the PPA. PPL must meet performance criteria (AF, CE, PR). Failure may result in penalties unless caused by Deemed Dispatch. Penalties may be applied in cases of underperformance in AF or CE, failure to meet Volt-Ampere Reactive (“VAR”) requirements, grid frequency deviations, or insufficient ramp rate affecting load flexibility. Penalty calculations are determined based on the shortfall in kWh or VAR and the applicable unit penalty rates. For intermittent power plants such as solar, wind, and ocean- based facilities, CE/AF penalties are assessed annually. Any penalties incurred are deducted directly from the monthly invoice. Dispatchers manage operations in accordance with the Grid Code and Distribution Code, with priority given to renewable power plants, subject to technical constraints and the dispatch arrangements outlined in the PPAs. The provision on the use of JISBOR exchange rate is in line with Presidential Regulation Number 112 of 2022 on the Acceleration of Renewable Energy Development for Electricity Supply (“PR 112/2022”). As a reference, the JISDOR exchange rate as of April 11, 2025 is Rp16.805,00. PPA may be terminated upon expiration of its term, in the event of a default or financing failure, if the PPL declares bankruptcy, or due to force majeure or other mutually agreed circumstances. Termination of the PPA by one of the parties due to breach of contract (default) may be effected when the calculation of Liquidated Damages has reached the maximum value. For geothermal projects, the PPA also terminates upon the expiry of the geothermal license. All terminations must be reported to the MoEMR and the relevant Directorates. Share transfers prior to the COD are prohibited, except in cases of transfers to affiliates with more than 90% ownership or step-in rights exercised by lenders in the event of a PPL default. Such transfers require prior approval from PLN and must be reported to the MoEMR. For geothermal projects, relevant provisions under geothermal law shall apply. Art. 13 PR 112/2022 and source: https://www.bi.go.id/en/statistik/informasi-kurs/jisdor/default.aspx?utm_source=chatgpt.com
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    Dispute Resolution Art. 30MoEMR Reg. 5/2025 A H R P L e g a l B r i e f PPA KEY POINTS (5/6) Art. 31 MoEMR Reg. 5/2025 Domestic Content Force Majeure Art. 32 MoEMR Reg. 5/2025 Art. 33 MoEMR Reg. 5/2025 jo. MoEMR Reg. 11/2024 Environmental Attributes & Carbon Value Art. 34 MoEMR Reg. 5/2025 Art. 29 MoEMR Reg. 5/2025 The price may be adjusted to reflect tax, environmental, or obligations, as well as other mutually agreed changes. Approval from the MoEMR is considered implied if the adjusted price remains within the benchmark cap, but explicit approval is required if the price is based on a negotiated agreement. For geothermal, pre-agreed prices in early-stage agreements may be revised post-exploration, based on benchmark and MoEMR approval. Art. 28 MoEMR Reg. 5/2025 Price Adjustment Events such as war, natural disasters, pandemics, or unexpected discoveries—such as archaeological objects—are considered qualifying force majeure events. The determination of such events lies with the relevant authority or the MoEMR In such cases, the COD and the duration of the PPA may be extended to account for delays. During the period of force majeure, parties are excused from fulfilling their contractual obligations. Renewable energy plants generate environmental attributes and carbon economic value, including carbon credits, renewable energy certifications, green or environmental labels, and other tradable benefits arising from emission reductions. These rights are legally recognized as part of the value derived from Renewable Energy operations. Where regulations exist, the treatment and ownership of these rights must comply with the applicable legal framework, including Presidential Regulation Number 98 of 2021 on the Implementation of Carbon Economic Value to Achieve Nationally Determined Contribution Targets and Control over Greenhouse Gas Emissions in Relation to National Development, as well as Minister of Environment and Forestry Regulation Number 21 of 2022 on Procedures for the Application of Carbon Economic Value. In the absence of such regulations, the rights may be contractually assigned between the parties and documented in the PPA, specifying terms of ownership, use, and potential revenue. This provision reflects a forward-looking approach, enabling developers and PLN to leverage emerging opportunities in carbon and sustainability markets. All disputes must initially be resolved through amicable settlement within 30 days. If necessary, experts may be appointed to assist in the resolution process, which may extend the settlement period to a maximum of 150 days. If a dispute remains unresolved after the amicable settlement process, it may be brought before a court or submitted to arbitration, in accordance with the terms outlined in the PPA. The final decision resulting from either process shall be binding on the parties. MoEMR Reg. 5/2025 requires that the development of Renewable Energy power plants must comply with prevailing laws on the use of domestic products. This provision is implemented in practice through Minister of Energy and Mineral Resources Regulation Number 11 of 2024 on The Use of Domestic Products for Electricity Infrastructure Development (“MoEMR Reg. 11/2024”), which sets out the technical framework for domestic content obligations in electricity infrastructure projects. Minimum domestic content values are set via a roadmap by the Directorate General of New, Renewable Energy, and Energy Conservation of Ministry of Energy and Mineral Resources, and must be verified by an independent party before project handover. Non-compliance may lead to administrative sanctions that must be reflected in the PPA. Dispute forums regulated in PPA are commonly Singapore International Arbitration Centre (SIAC) or International Chamber of Commerce (ICC), depending on the parties' agreement.
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    A H RP L e g a l B r i e f Refinancing Fuel Supplies To optimize the implementation of power supply activities utilizing Renewable Energy sources, PPL may conduct refinancing. This refinancing refers to a financing review activity carried out between PPL and the lender. PPL is required to inform PLN regarding the implementation of such refinancing. The MoEMR is responsible for guiding and supervising the implementation and fulfillment of PPA provisions, applicable to both PPL and PLN. Guidance may include consultation, dissemination, information sharing, problem-solving facilitation, and other necessary forms of support. Supervision covers both the preparation and implementation stages of the PPA. PLN must report each Renewable Energy-based power purchase to the MoEMR within 5 business days of PPA signing, including the PPL’s business registration number, cost structure, financial model, and other required information. Additionally, PLN must submit semi-annual reports on project development progress and the use of domestic products until the COD. Language in PPA The PPA shall be drawn up using the Indonesian language. If necessary, it may be prepared in two languages, namely Indonesian and a foreign language. In the event of a difference in interpretation between the two versions, the language to be used shall be the one agreed upon in the PPA. Art. 35 MoEMR Reg. 5/2025 Art. 36 MoEMR Reg. 5/2025 Intermittent Renewable Energy Power Plant PLN shall guarantee the availability of fuel supplies for types of power plants that utilize Renewable Energy sources for: (a) biomass power plant; (b) biogas power plant; (c) biofuel power plant; and (d) geothermal power plant. The MoEMR Reg. 10/2017 does not regulate PLN’s guarantee the availability of such fuel supplies. PPL is required to submit monthly and annual energy production estimates from power plants utilizing intermittent Renewable Energy sources to PLN. These estimates must be based on historical data, supported by adequate data collection facilities, use methods approved by the Dispatcher, and follow applicable standards. Projections must be accurate within an agreed margin of error to minimize the need for system reserves. Art. 37 MoEMR Reg. 5/2025 If a power plant using intermittent Renewable Energy is equipped with battery or other energy storage facilities, the power purchase transaction is based on the total energy recorded at the transaction point, from both the plant and the storage. These storage facilities are considered an integral part of the power plant. PLN must replace storage facilities that reach the end of their lifecycle with new ones of equal or better technology. The replacement cost shall be borne by PPL. Guidance and Supervision Art. 38 MoEMR Reg. 5/2025 Art. 39 MoEMR Reg. 5/2025 Art. 40 MoEMR Reg. 5/2025 Art. 41-45 MoEMR Reg. 5/2025 Other Notable Provisions The PPA provisions in this MoEMR Reg. 5/2025 serve as a reference for: a. the preparation of PPA for power plants utilizing Renewable Energy sources not covered under Article 3 of MoEMR Reg. 5/2025; b. the preparation of PPA between PPL and business entities holding electricity business areas other than PLN; and c. the preparation of PPA between business entities holding electricity business areas and PPL’s utilizing new energy sources. The PPA provisions in MoEMR Reg. 5/2025 cannot be used as a reference for preparing power purchase agreements related to excess power between PLN and holders of electricity supply licenses for self-use. Such agreements must be prepared based on mutual agreement between the parties. Upon the enactment of MoEMR Reg. 5/2025, existing PPAs for Renewable Energy power plants signed beforehand remain valid until expiry, with any extensions subject to the new regulation. Ongoing procurement processes up to the proposal submission phase will follow previous rules. Electricity purchases exceeding CE or AF, or for plant optimization under existing PPAs, may be made through supplementary agreements. Additionally, the principle of least-cost electricity procurement to meet projected demand for purchases exceeding CE or AF shall follow the provisions of the MoEMR Reg. 5/2025. Art. 46 MoEMR Reg. 5/2025 Art. 47 MoEMR Reg. 5/2025 Art. MoEMR Reg. 5/2025 PPA KEY POINTS (6/6)
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    CONCLUSION A H RP L e g a l B r i e f • PPA Provision Scope of Usage. • PPA Extension. • Amount of Performance Guarantee. • AF or CE Penalty Payment. • Geothermal Power Plant (PPA) Price Adjustment. • Deemed Dispatch due to curtailment. • Purchase of electricity exceeding CE or AF, and purchase for plant optimization. • PPA COD. • Use of Domestic Content. • Rights to Environmental Attributes/Carbon Economic Value. • Intermittent Renewable Energy Power Plants. • Special transactions if Renewable Power Plants have energy storage facilities. • Refinancing. • Language in PPA. 14 10 • Regulated types of renewable energy technology. • Cooperation schemes. • Electricity tariff adjustment. • PPA expiration. • Regulation of rights and obligations, risk allocation, types and amounts of penalties. • Planning and implementation of system operations (dispatch system). • Force majeure. • Dispute resolution. • Fuel supply. New Provisions Refined Provisions from MoEMR Reg. 10/2017 The MoEMR Reg. 5/2025 introduces several improvements aimed at strengthening the investment climate and enhancing the implementation of renewable energy projects, as follows: Foreign exchange risk is borne by PLN through payments pegged to the JISDOR exchange rate. For geothermal projects, exploration-related risks are acknowledged, with price adjustments allowed based on the exploration period and applicable pricing benchmarks. Increased Clarity Promotion of Carbon Monetization Flexible Excess Energy Mechanism Refined Risk Allocation Approach The regulation thoroughly outlines both technical and commercial aspects of PPAs, helping to reduce uncertainty and build investor confidence. Grants recognition of rights to carbon credits and renewable energy certificates, unlocking new business opportunities for PPLs. Allows PLN to purchase electricity beyond contracted volumes at a predetermined price (up to 80% of the PPA rate), enabling more efficient capacity utilization. Additional regulations and more detailed provisions in PPAs are advised to better incentivize renewable energy development. Following an analysis of the MoEMR Reg. 5/2025, it can be concluded that the regulation introduces both newly established provisions and refinements to provision regulated in MoEMR Reg. 10/2017, as follows:
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    We will continueto follow the developments on this topic and provide additional information as it becomes available. If you have any questions on this topic, please contact: Muhammad Farisi [email protected] Valen Diyen [email protected] This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it applies to your circumstances before deciding to take any action. World Capital Tower 19th floor Jl Mega Kuningan Barat No. 3 Jakarta 12950 Indonesia P: +6221 50917915 +6221 50917916 E: [email protected] www.ahrplaw.com Indira Wahyu Prameswari [email protected]