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Indonesia granted PLN exclusive authority over international electricity trade in September. (Image: iStock)
Indonesia has taken a decisive step in advancing cross-border electricity trade by enacting new legislation that designates state utility Perusahaan Listrik Negara (PLN) as the country’s sole electricity importer and exporter.
The regulation also introduces a flexible mechanism that allows transactions to be settled not only in cash but also through energy or other commodities. Revenue from such trades will be directed toward strengthening national energy security, including funding new and renewable energy projects.
Prabowo signs regulation to accelerate green power exports
On Sept. 15, President Prabowo Subianto signed Regulation No. 40/2025, granting PLN exclusive authority over international electricity trade. The move is expected to accelerate renewable power exports to Singapore and advance the ASEAN Power Grid (APG) initiative.
Under the new framework, cross-border electricity trade can be conducted via swap transactions, meaning that electricity sales may be settled through other energy forms or commodities instead of cash. This flexibility could unlock new opportunities for resource-rich Indonesia, enabling electricity to be exchanged for other essential goods or energy sources.
Previously, Energy and Mineral Resources Minister Bahlil Lahadalia had stated that PLN should focus on bolstering domestic electricity supply—including expanding generation and transmission—before engaging in renewable exports. The new regulation effectively overturns that stance.
Indonesia moves to centralize cross-border power trade under PLN. (Photo: PLN)
Concerns over PLN’s financial burden and pricing risks
In June, Indonesia and Singapore signed an MoU to export 3.4 GW of renewable energy, with plans to scale up to 12 GW. The deal included a US$10 billion investment in solar manufacturing in Indonesia’s Riau Islands. At the time, officials suggested private companies would lead export development, though PLN’s participation was not ruled out.
Analysts at Tenggara Strategics—a think tank founded by CSIS, Jakarta Post, and Universitas Prasetiya Mulya—argue that the slow progress of the Indonesia-Singapore renewable energy trade is partly due to reliance on PLN’s state-controlled grid. Constitutionally mandated domestic tariffs, which are lower than Singapore’s market rates, undermine project economics, making export pricing a key negotiation issue.
Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), warned that PLN’s financial position could also be a bottleneck. He noted that PLN already faces an estimated US$188 billion investment requirement to meet domestic electricity demand, leaving little room for large-scale export financing without creating additional fiscal strain.
Source: Jakarta Post(1), (2), (3), Petromindo
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