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18 November 2013
The minister of energy and mineral resources recently issued the Regulation on the Purchase of Electricity Power by PT Perusahaan Listrik Negara (Persero) from Photovoltaic (Fotovoltaik) Solar Power Plant (17/2013). The regulation is intended to promote greater use of solar energy for electricity generation.
Purchase of electricity
The regulation stipulates that Perusahaan Listrik Negara (PLN) – the state-owned electricity company – will purchase the electricity produced by the solar power plant of the business entity that wins a capacity quota tender. The purchase price is set at a maximum of $0.25 per kilowatt hour, but if the winning solar power plant uses photovoltaic modules with a local content of at least 40%, the price may be increased to a maximum of $0.30 per kilowatt hour. The purchase price will include interconnection costs between the solar power plant and the interconnection point in PLN's transmission line.
Capacity quota and tender procedure
The 'capacity quota', defined as the maximum solar power plant capacity that can be interconnected to a system or sub-system of PLN's electricity network, will first be determined by the Directorate General of New Renewable Energy and Energy Conservation (DGRE) and PLN. The DGRE will then form a tender committee consisting of representatives of the Directorate General of Electricity (DGE), the DGRE and PLN.
The tender committee will manage the tender, prepare tender documents, evaluate offers and nominate the tender winner. However, ultimate selection of the winner rests with the DGRE.
The main points of the tender procedure are as follows:
The winner of the tender must submit evidence that it has paid 20% of the total construction costs of the solar power plant into an escrow account in the name of both the DGRE and the winner at a state-owned or major Jakarta bank no later than 15 days after the winner has been declared. On receipt of evidence of this bank payment, the DGRE will submit the declaration of the winner to the Ministry of Energy and Mineral Resources and the DGE. The ministry will then issue the instruction to PLN to purchase the electricity generated by the winner's solar power plant. The instruction letter constitutes the ministry's approval of the purchase price, which will be determined based on the final results of the tender.
The approved purchase price must be stated in the power purchase agreement between PLN and the winning solar power plant. The agreement will be valid for 20 years and is extendable. The agreement must be signed within 60 days of PLN's receipt of the instruction to purchase the electricity produced by the winner's solar power plant.
The winner is obliged to:
The regulation came into effect on June 12 2013.
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