The new MEMR Regulation 19/2025 provides a clear legal and commercial framework for solar-plus-storage development across the nation's remote islands, targeting the replacement of over 5,200 diesel power plants.

The Indonesian government has officially enacted Minister of Energy and Mineral Resources Regulation No. 19 of 2025 (MEMR 19/2025) concerning Hybrid Power Plants, effective December 29, 2025 . This landmark regulation establishes a comprehensive legal framework for integrating renewable energy sources-particularly solar photovoltaic (PV) systems-with battery energy storage and existing diesel generators, specifically designed for the archipelago's thousands of remote microgrids .

The regulation arrives as the implementing backbone for President Prabowo Subianto's ambitious vision, announced in August 2025, to deploy 80GW of solar PV capacity and 320GWh of battery energy storage systems across 80,000 villages nationwide . This initiative, core to the nation's "de-dieselisation" program, targets the progressive replacement of approximately 5,200 diesel power plants (PLTD) currently operating across 2,130 locations, which still rely heavily on costly imported fuel .

Defining the Hybrid Model

MEMR 19/2025 officially defines a Hybrid Power Plant (PLT Hibrida) as a facility that integrates renewable energy generation with other technologies, including battery storage and existing non-renewable plants, operating concurrently at a single grid connection point . Permissible configurations explicitly include combining solar PV with battery energy storage systems (BESS), with or without existing diesel units as backup . Crucially, for any system incorporating BESS, the regulation mandates the deployment of an Energy Management System (EMS) to optimize generation and storage dispatch, ensuring grid stability while minimizing operational costs .

Streamlined Procurement and Pricing Certainty

To accelerate project deployment, the regulation introduces a direct selection mechanism, replacing lengthy public tender processes . Indonesia's state electricity company, PT PLN (Persero), will publish a qualified entity list (DPT) every three months. Approved developers can then submit bids within a benchmark price range set by ministerial decree, which establishes both upper and lower limits. PLN is obligated to purchase from the lowest bidder within this range, with the entire process-from announcement to Power Purchase Agreement (PPA) signing-capped at 180 calendar days .

The pricing framework offers critical stability for long-term investors. Power purchase prices are fixed for the PPA duration with no escalation, calculated at the plant's connection point excluding grid facility costs (which are capped at 5% of the power price) . Additionally, while payments are made in Indonesian Rupiah, the settlement basis is pegged to the Jakarta Interbank Spot Dollar Rate (JISDOR), providing a hedge against currency fluctuation risks .

A Strategic Shift from Ambition to Action

MEMR 19/2025 transforms the "8,000-village program" from a policy aspiration into a bankable, operationally defined market. By formally recognizing the transitional role of existing diesel assets while prioritizing renewable integration, the regulation provides the legal certainty required to unlock significant international investment . The focus on standardized configurations, transparent price ceilings, and expedited procurement timelines directly addresses previous barriers that hindered distributed solar development in Indonesia's challenging island geography .

With this regulatory foundation now in place, Indonesia's ambitious target to provide clean, reliable electricity to millions while drastically reducing diesel dependence has moved from vision to enforceable reality.

Desert PV