Please! Regulations for mandatory local components in electrical projects

Jakarta –

The Ministry of Energy and Mineral Resources (ESDM) issued ESDM Ministerial Regulation (Permen) No. 11 of 2024 regarding the Use of Domestic Products for Electricity Infrastructure.

Regulations have been issued to accelerate the development of electrical infrastructure by prioritizing the use of domestic products. The following is an explanation.

Extracted from the Instagram account of the Director General of New, Renewable Energy and Energy Conservation @djebtke, the scope of the project is the development of electrical infrastructure power generation from renewable energy sources, power generation from sources or -renewable, as well as distribution networks, distribution networks and substations.

Through the decree of the Minister of Energy and Mineral Resources No. 191.K/ ΕΚ.01/ΜΕΜ.Ε/2024, there is a minimum Domestic Component Level (TKDN) for components of electrical infrastructure projects.

“The decision of the Minister of Energy and Mineral Resources is accompanied by the decision of the Director General of EBTKE which expresses the order of the Director General No. 150.K/EK.01/DJE/2024 regarding the procedures for the execution of TKDN be measured for various electrical projects. ,” wrote the Director General of EBTKE, who was announced on Tuesday (13/8/2024).

Regulation of the Minister of Energy and Mineral Resources No. 11 of 2024 regulates the use of domestic goods and services, as well as establishing TKDN obligations for new and renewable energy projects. Arrangements include labor, technology, goods, services, engineering capabilities, and other local components related to new and renewable energy.

“It is hoped that this will strengthen domestic industry and support the energy transition,” Eniya said.

Examples for PLTS Projects and Foreign Investment

TKDN’s obligations for electricity infrastructure are excluded for projects that receive foreign loans and grant funds. However, article 17 paragraph 1 of the Regulation of the Minister of Energy and Mineral Resources Number 11 of 2024 states that the value of grants or loans must be at least 50% from multilateral creditors.

Besides, TKDN relaxation is also given specifically for Solar Power Plant (PLTS) projects, but there are several requirements to allow these imports.

Among other things, the list of projects must be confirmed through a meeting under the coordination of the Minister for Coordination of Maritime Affairs and Investment, using solar modules assembled at home or imported by companies that have a commitment to invest in the production of solar modules at home, with the aim of ending solar module production no later than December 31, 2024 as confirmed by a statement letter.

If you cannot meet these requirements, the government will impose sanctions in the form of a blacklist if you do not do so. The power purchase agreement (PPA) itself is targeted to be signed on December 31, 2024, while the commercial operation or Commercial Operation Date (COD) is targeted to begin on June 30, 2025.

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