Shared transmission networks key to unlocking Indonesia’s renewable energy potential
Indonesia can speed up renewable energy growth through shared access to transmission network, says research report
JAKARTA, Indonesia (MNTV) — Indonesia can speed up its renewable energy growth by enabling shared access to the transmission network, according to a joint report by the Institute for Essential Services Reform (IESR) and the Institute for Energy Economics and Financial Analysis (IEEFA).
This approach would support the state electricity utility PT Perusahaan Listrik Negara (PLN) and encourage additional investment without putting pressure on the national budget, said the report.
Report co-author Mutya Yustika, Energy Finance Specialist at IEEFA Indonesia, explained that the report assesses the key success factors for implementing shared use of Indonesia’s transmission network.
She noted that previous IEEFA analysis indicated the proposed scheme could create a new revenue stream for PLN to support its ongoing grid modernization and expansion efforts, while also boosting Indonesia’s appeal to investors.
The proposed scheme can finance the estimated $5 billion required annually for power generation and the $146 billion investment gap that Indonesia needs to meet its 2030 climate targets.
Co-author Grant Hauber, IEEFA’s Strategic Energy Finance Advisor for Asia, noted that shared use of transmission networks is increasingly becoming standard practice across Southeast Asia to stimulate private investment in renewable energy. He emphasized that for industries—particularly RE100 members—grid access sharing can significantly accelerate efforts to reach 100% renewable energy in their supply chains by 2050.
The shared use of transmission networks presents a significant opportunity to boost the supply of Renewable Energy Certificates (RECs) through private sector investment, all while maintaining PLN’s central role in managing the national electricity system.
The report advises that PLN enhance its capabilities to function effectively as a transaction hub for shared electricity infrastructure. It further recommends that the Indonesian government incorporate a framework for joint transmission network utilization into the upcoming New and Renewable Energy Bill (EBET), and integrate this model into PLN’s 2024–2034 Electricity Supply Business Plan (RUPTL).
The report outlines four essential conditions for the success of a shared transmission network for renewable energy: guaranteed access for renewable energy developers, fair and transparent tariff structures—preferably set by an independent regulator—robust interconnections, and well-defined contractual terms.
Additionally, renewable energy projects should be connected to the national grid with mechanisms in place to limit curtailment due to oversupply. Power producers must also commit to minimum generation levels, adhere to grid codes, and contribute to grid balancing costs when needed.
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