10 Jun 2025
MEMR 10 2025: A Bold Roadmap for Sustainable Electricity

In response to Presidential Regulation No. 112 of 2022 on the Acceleration of the Development of Renewable Energy Power Plants for Electricity Supply (PR 112/2022), the Minister of Energy and Mineral Resources (MEMR) has finally issued Regulation No. 10 of 2025 on the Roadmap for Energy Transition in the Electricity Sector (MEMR 10/2025). 

This roadmap outlines the country’s plan to reduce reliance on fossil fuels and boost the use of new and renewable energy sources, with the ultimate goal of reducing greenhouse gas emissions and supporting sustainable development. It also aligns with various national policies, including the National Energy Policy, the Long-Term National Development Plan, PLN’s RUPTL, and Indonesia's Long-Term Strategy for Low Carbon and Climate Resilience 2050.

Here are the key highlights of this new regulation:

1. Roadmap for Reducing Greenhouse Gas Emissions

The strategy for managing existing power plants and developing new ones aims to optimize electricity generation capacity through to 2060. To meet rising demand and replace retiring plants, Indonesia will require an additional capacity of around 9.6 gigawatts per year. By 2060, total capacity is projected to reach 443 gigawatts, consisting of: (i) 41.5% Variable Renewable Energy, supported by around 34 gigawatts storage capacity; and (ii) 58.5% Dispatchable Renewable Energy.

The roadmap also includes capacity and emissions projections. CO₂ emissions are expected to peak in 2037 at 599 million tons and decline to near zero by 2058.

2. Roadmap for Accelerating the Retirement of Coal-fired Power Plants (CFPPs)

   1. Reducing Greenhouse Gas Emissions
   Through MEMR 10/2025, the Government reinforces its commitment to achieving net-zero emissions by 2060 through the implementation of energy transition. The accelerated retirement of CFPPs is introduced as one of the strategic steps to enhance decarbonization and increase the share of renewable energy in the national energy mix. Emission reductions will be calculated based on average annual emissions and factors such as the intensity of full operations.

   2. Criteria and Methodology for Selecting CFPPs for Accelerated Retirement
   MEMR 10/2025 improves the selection method for CFPP early retirement previously outlined in PR 112/2022. Under the earlier regulation, seven criteria were used to identify plants for early retirement—age, utilization, technology support, greenhouse gas emissions, economic value, and availability of funding availability. The new regulation introduces three additional criteria, namely, system reliability, impact on electricity tariffs, and just energy transition. It also provides a more detailed assessment method using the Analytical Hierarchy Process (AHP) to weigh and prioritize all criteria on a scale from 1 (highest priority) to 5 (lowest priority).

   3. Strategy for Accelerating CFPP Retirement: PLN Assignment from the MEMR due to Funding Support and Studies Evaluation Requirement
   The following is an illustration of the roadmap implementation of the acceleration of CFPPs retirement:

Roadmap Implementation Highlights based on the above:

1. Regulatory Framework

   MEMR 10/2025 serves as the core framework for the electricity sector’s energy transition roadmap.

2. Assignment of PLN

   PLN will be assigned by the MEMR to conduct studies on the accelerated retirement of CFPPs, with support from both domestic and international funding sources. The MEMR will establish a joint working team to evaluate these studies.

3. Scope and Timing of Studies

   The studies must: (i) be completed within six months from the date of assignment; and (ii) cover at the following aspects: technical, legal, commercial, and financial, including funding sources and application of good governance and business judgment rules principles. 

4. Evaluation and Recommendation

   The joint working team will review PLN’s studies and submit its recommendations to the MEMR.

5. Ministerial Approvals

   Based on the joint working team’s evaluation, the MEMR will identify which CFPPs will undergo early retirement, subject to written approval from the Minister of Finance (MOF) and the Minister of State-Owned Enterprises (MSOE). 

6. Special Assignment to PLN

   Upon the approval, the MEMR will issue a special assignment for PLN to amend the relevant CFPPs Power Purchase Agreement.

7. Execution by PLN

   Under this assignment, PLN will:

   1. accelerate the termination of the CFPP’s operational period;

   2. procure and/or construct alternative power plants;

   3. construct and/or upgrade electric power system networks and smart grid infrastructure; and/or

   4. perform any other tasks determined by the MEMR.

Additional Funding Support

• The MEMR will conduct regular evaluations—every six months or as needed—together with the joint working team and funding support provider.

  • If these evaluations indicate that additional funding is required (e.g., due to increased costs), the MEMR will appoint an independent institution to conduct a study as an additional reference after the completion of the procurement process for the alternative power plant for the CFPP.

  • This independent study must be completed within two months of appointment.

  • Based on the study and evaluation, the MEMR may consider additional funding, subject to written approvals from the MEMR, MOF, and MSOE.

  • Once approved, the additional funding is implemented by the funding support provider.

Final Steps in the Retirement Process

8. The alternative power plant begins operation, ensuring reliable electricity supply.

9. Once supply is secured, the designated CFPP is terminated early (CFPP early retirement). 

C. Development of Supergrid

To support the increased use of renewable energy and meet growing electricity demand, the roadmap includes plans for the development of both inter-island and intra-island electricity interconnections.

This initiative addresses the current imbalance between electricity demand, which is primarily concentrated in Java and Bali, and renewable energy potential, which is largely located outside these regions. The priority development areas include: 

• Intra-island interconnections: (Sumatra (North Sumatra – South Sumatra (Sumbagut-Sumbagsel)), Sulawesi North Sulawesi – South Sulawesi (Sulbagut-Sulbagsel), Kalimantan (Looping Kalimantan) Papua (Jayapura-Sorong); and 

• Inter-island interconnections: Sumatra-Batam (2028), Java-Bali (2029), Sumatra-Java (2031), Bali-Lombok-Sumbawa (2035), Kalimantan-Java (2040), Sumbawa-Flores and Kalimantan-Sulawesi (2041), Sumba-Sumbawa-Sulawesi (2045).

This supergrid development is a critical part of the roadmap to ensure reliable national electricity supply and effective integration of renewable energy sources.

4. Energy Transition Program

   Unlike PR 112/2022, which mainly focuses on accelerating the retirement of CFPPs, MEMR 10/2025 sets out more detailed energy transition programs in the electricity sector. These will be carried out through various strategies, including:

• Biomass Cofiring in CFPPs: Implementing biomass cofiring will be carried out in accordance with relevant laws and regulations.

• Reduction of Oil Usage: (i) Replacing diesel power plants with renewable energy or hybrid systems; or (ii) converting oil usage to gas.

• Retrofitting Fossil Power Plants: Implementing carbon capture and storage technologies and using green ammonia and hydrogen.

• Limiting New CFPP Development: Prohibiting the development of new CFPPs, except under specific conditions outlined in PR 112/2022, namely: (i) CFPPs included in the RUPTL prior to the enactment of PR 112/2022; and (ii) CFPPs which categorized as national strategic projects, committed to reducing greenhouse gas emission by at least 35% within 10 years, and operating no later than 2050.

• Accelerating Renewable Energy Development: Developing variable renewable energy sources and additional power plants based on new and renewable energy as alternatives.

• Producing Green Hydrogen and Ammonia: Utilizing the potential of new and renewable energy sources.

• Developing Nuclear Power Plants: Ensuring safety and security compliance.

• Enhancing Smart Grid Infrastructure: Building and upgrading smart grid systems to optimize electricity supply and demand.

• Accelerating the Retirement of CFPPs: Terminating the operations of CFPPs before the end of their planned operational lifespan.

ABNR Commentary

The issuance of MEMR 10/2025 marks a significant milestone in Indonesia's journey towards a sustainable and low-carbon future. Shortly after the issuance, the Minister of Energy and Mineral Resources signed off on the early termination of the 650 MW Cirebon I power project.[1] 

The additional provisions for funding support introduced under MEMR 10/2025 are likely a response to the high costs associated with the early retirement of CFPPs. According to the Institute for Essential Services Reform (IESR), the cost of retiring coal-fired power plants in Indonesia is estimated to reach USD 4.6 billion by 2030, with the total cost of retiring all such plants by 2050 projected at USD 27.5 billion. [2]

By setting a clear roadmap for the energy transition in the electricity sector, this regulation underscores the country's commitment to reducing greenhouse gas emissions and enhancing the use of renewable energy sources. While challenges remain, MEMR 10/2025 offers a hopeful vision for Indonesia's energy future, particularly for Indonesian Power Producers who intend or are expected to participate in this transition. 

The Government’s commitment to lowering greenhouse gas emissions and increasing renewable energy use is a positive step toward building a more sustainable, secure, and resilient energy landscape.

By partners Emir Nurmansyah (enurmansyah@abnrlaw.com), Serafina Muryanti (smuryanti@abnrlaw.com),  Maher Sasongko (msasongko@abnrlaw.com), associates  Adya Sepasthika (asepasthika@abnrlaw.com),  Kenny Poltak (kadrianus@abnrlaw.com), and  Claudia Inggrid Hartanto (chartanto@abnrlaw.com).

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.