Nowadays, Indonesia's industrial sector is expanding and attracting more foreign investments, so the demand for reliable and efficient power generation will likely rise. This growth in industrial activity often leads to increased energy consumption, which can drive the need for power plants for personal interest to support the main business activity. Indonesia itself has accommodated the interest of power plants for personal interest in Law Number 30 of 2009 on Electricity which has been lastly amended by Law Number 6 of 2023 (“Electricity Law”) along with its implementing and derivative regulations. The derivative regulations of the law are, including but not limited to, Government Regulation Number 25 of 2021 on the Organization of Energy and Mineral Resources Sector (“GR 25/2021”) and the Minister of Energy and Mineral Resources (“MEM”) Regulation Number 11 of 2021 on the Implementation of Electricity Business (“MEM Regulation 11/2021”).

To have a power plant for personal interest (“Power Plant”), business actors shall fulfill some requirements and obligations from the Indonesian government based on the MEM Regulation 11/2021. Power Plant is further classified into 2 (two) classifications, with details as follows:

a. Power Plant with a capacity ≤ 500 kW in 1 (one) electricity installation system:

Pursuant to Article 39, paragraph (3), MEM Regulation 11/2021, business actors that operate power plants with a total power capacity of up to 500 kW in 1 (one) electricity installation system must submit a report to the MEM. In addition, the installation system must have an operational feasibility certificate (Sertifikat Laik Operasi/“SLO”) according to Article 27 paragraph (6) of GR 25/2021.

b. Power Plant with a capacity > 500 kW in 1 (one) electricity installation system:

Whereas, in the event that the capacity of the power plant exceeds 500 kW, it is required to have an Electricity Supply Business License for Personal Interest (Izin Usaha Penyediaan Tenaga Listrik untuk Kepentingan Sendiri/"IUPTLS”) issued by MEM through the Online Single Submission Risk-Based Approach (OSS RBA) system.

Subsequently, MEM Regulation 11/2021 in Article 95 paragraph (1) stipulates that IUPTLS holders must fulfill some obligations, as follows:

1. Basic infrastructure commitments must be in accordance with business needs, at least (i) environmental impact analysis; (ii) conformity of spatial utilization activities; (iii) building approval; and (iv) functional feasibility certificate.
2. The installation to be operated must have SLO.
3. Operations of the power plant must be carried out by engineering personnel who have certificates of competence for the operations carried out by engineering personnel.
4. Submit a report on the implementation of IUPTLS periodically every January to the MEM/Governor in accordance with their authority.

Furthermore, pursuant to Article 13 of the Electricity Law, electricity supply business for personal interest is strictly limited to personal usage as well as to support the main business of business actors, and not for commercial sale to other entities. In the event there is excess power, IUPTLS holder cannot sell it to another business entity. However, they can sell the excess power to be utilized for public interest after obtaining approval from the central government or local government in accordance with the norms, standards, procedures, and criteria set by the central government. For instance, it may, upon approval from the competent government authorities, sell excess power to the area that has not been covered by the holder of an Electricity Supply Business License for Public Interest.

Lastly, if business actors do not comply with reporting requirements to MEM or fail to possess the necessary IUPTLS as required but continue to engage in electricity supply for personal interest, business actors may face administrative sanctions as outlined in Article 55 paragraph (1) of GR 25/2021, which include (i) warning letters; (ii) suspension of business activity; (iii) a fine; and/or (iv) revocation of business licensing.