President Prabowo Subianto has reportedly rejected the implementation of the “power wheeling” electricity scheme, opting to maintain the monopoly of state-owned PT PLN in the electricity sector despite calls for liberalization to attract investment in renewable energy.
The decision was confirmed by Hashim Djojohadikusumo, the President’s Special Envoy for Climate and Energy.
Power wheeling, a mechanism that allows Independent Power Producers (IPPs) to build power plants and sell electricity directly to consumers, could challenge PLN’s role in the market. However, Hashim emphasized that the government must retain control over PLN’s position as the primary electricity regulator in the country.
“We welcome foreign investment, but if power wheeling is introduced, many electricity sectors could be dominated by non-Indonesian entities,” Hashim said at the CNBC Indonesia Economic Outlook 2025 event in Jakarta on Wednesday. “Under President Prabowo’s leadership, the state must remain the controller.”
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He added that PLN is a state instrument with a strong credit rating, and expressed optimism that Indonesia will continue to attract investment. “Through PLN, the controller, I’m confident that many investors, including from Qatar and Abu Dhabi, will consider Indonesia a safe haven,” Hashim stated.
Despite some calls from conglomerates for the power wheeling scheme, Hashim confirmed that President Prabowo has decided not to open the market, and that the state would continue to maintain control.
The proposal to break PLN’s monopoly surfaced during last year’s election campaign, with the aim of accelerating the adoption of renewable energy. Some lawmakers had also included a proposal for power wheeling in a draft bill on renewable energy, though it has yet to be discussed in detail by parliament.
Investors have expressed concerns about the attractiveness of renewable energy investment in Indonesia, given competition from cheaper coal power and the limited ability to sell directly to customers. Analysts argue that allowing independent producers to sell directly to consumers willing to pay more could spur investment in the sector.
Editing by Reiner Simanjuntak
