February 5, 2024

Prospects and Challenges of Power Wheeling for Development of Renewable Energy in Indonesia

Workers check solar panels at Tirtonadi Terminal in Surakarta, Central Java, for a Transportation Ministry project capable of producing 500,000 watts of electricity to power operations of the terminal, in this undated photo. (JP/Ganug Nugroho Adi)

The feasibility of implementing power wheeling in Indonesia has been intensely debated, with no end in sight. This study was launched to finally answer a number of unresolved questions asked by market players and investors, such as why power wheeling is so much more difficult to implement in Indonesia compared to other countries.

In this study, we explore the unique characteristics of Indonesia's electricity industry, a brief history of why it has been constructed in such a way, analyze the legal foundation of the Indonesia's energy and why it has been unsuitable for conventional power wheeling implementation. Moreover, we also provide our recommendations regarding the power wheeling issue, which includes a list of adjustments the power wheeling mechanism would need to be applicable Indonesia.