Glossary
Decarbonizing Indonesia’s Power Sector
A
ASEAN (Association of Southeast Asian Nations)
A regional intergovernmental organization of ten Southeast Asian countries that promotes economic, political, and security cooperation.
B
Balance sheet financing
The financing of investments through a company's own resources and corporate borrowing, rather than through a dedicated project structure. PLN currently finances transmission investments in this manner.
Bappenas
Indonesia's Ministry of National Development Planning, responsible for national development strategy and planning.
Battery energy storage system (BESS)
A system of batteries that stores electricity for later use. Battery storage helps balance supply and demand on grids with high shares of variable renewable energy.
C
Captive coal-fired power plant (captive CFPP)
A coal-fired power plant built and operated by an industrial facility to supply its own electricity. Captive plants typically operate independently of the public grid.
Carbon Border Adjustment Mechanism (CBAM)
A European Union policy that applies a carbon price to imports of certain carbon-intensive goods, based on the emissions generated in their production.
Coal downstreaming
The processing of coal into higher-value products, such as methanol or synthetic gas, as an alternative to direct combustion or export.
Coal-fired power plant (CFPP)
A power plant that generates electricity by burning coal.
Coal gasification
The conversion of coal into synthetic gas for use as fuel or as a chemical feedstock.
Coal moratorium
A prohibition on the development of new coal-fired power plants. Indonesia's moratorium, established under Presidential Regulation No. 112/2022, exempts projects already included in the RUPTL and captive plants serving national strategic projects.
Collective investment scheme for infrastructure (CIS-DINFRA; IK-DINFRA)
An Indonesian investment vehicle that pools capital from multiple investors to finance infrastructure assets.
Corruption Eradication Commission (KPK; Komisi Pemberantasan Korupsi)
Indonesia's independent anti-corruption agency, which investigates and prosecutes corruption offenses, including those involving losses to state assets.
Corruption Eradication Law
Indonesia's anti-corruption legislation, which criminalizes actions that cause financial or economic losses to the state. The law creates legal risk for officials who approve the early retirement of state-owned coal plants.
D
Danantara (Daya Anagata Nusantara)
Indonesia's sovereign wealth fund, established in 2025 to manage state-owned enterprise assets and invest in national priority projects.
Domestic Market Obligation (DMO)
An Indonesian regulation requiring coal producers to sell at least 25% of their output to the domestic market.
Domestic Price Obligation (DPO)
An Indonesian regulation that caps the price of coal sold domestically. The cap is $70 per metric ton for power generation and $90 per metric ton for certain industries.
E
Emissions trading scheme (ETS)
A market-based mechanism that sets a cap on total emissions and allows regulated entities to buy and sell emission permits.
Energy Transition Partnership (ETP)
A multi-donor partnership that supports the energy transition in Southeast Asia through technical assistance and financing.
G
G20 (Group of Twenty)
An intergovernmental forum of 19 major economies, the European Union, and the African Union that coordinates on global economic policy.
Green Enabling Super Grid
A planned national interconnected transmission network, set out in the RUPTL 2025–2034, that would link renewable resources in Sumatra, Kalimantan, Sulawesi, and Nusa Tenggara to demand centers in Java, Madura, and Bali.
I
Independent power producer (IPP)
A privately owned entity that generates electricity for sale to a utility, typically under a long-term power purchase agreement. In Indonesia, IPPs sell power to PLN.
Infrastructure investment trust (InvIT)
An investment vehicle that owns income-generating infrastructure assets and distributes the resulting revenue to investors.
International Partners Group (IPG)
The group of donor governments that committed financing to Indonesia's JETP. Its members are Canada, Denmark, the European Union, France, Germany, Italy, Japan, the Netherlands, Norway, and the United Kingdom. The United States withdrew in 2025.
J
Just Energy Transition Partnership (JETP)
A financing agreement between donor governments and an emerging economy to support a transition from fossil fuels that protects affected workers and communities. Indonesia's JETP, announced in 2022, mobilized an initial pledge of $20 billion.
K
Kebijakan Energi Nasional (KEN)
Indonesia's National Energy Policy, established under Government Regulation No. 40/2025, which sets long-term targets for the national energy mix.
L
Low Carbon Development Initiative (LCDI)
A Bappenas-led program that integrates low-carbon development objectives into national and regional development planning.
M
Ministry of Energy and Mineral Resources (MEMR; ESDM)
The Indonesian government ministry responsible for energy and mining policy and regulation.
N
National strategic project (Proyek Strategis Nasional)
A government designation that grants priority status and accelerated approvals to projects considered critical to national development.
Nationally Determined Contribution (NDC)
A country's national climate action plan submitted under the Paris Agreement, setting out its emissions reduction targets and measures.
P
Perusahaan Listrik Negara (PLN)
Indonesia's state-owned electricity utility, which is responsible for most of the country's power generation, transmission, distribution, and retail supply.
Power wheeling
An arrangement that allows electricity consumers to purchase power directly from an independent power producer while using the utility's transmission network to deliver it. The consumer pays the utility a wheeling charge for use of the network.
Public-private partnership (PPP)
A long-term contractual arrangement in which a private entity finances, builds, or operates public infrastructure.
R
Rencana Umum Energi Daerah (RUED)
A provincial energy plan in Indonesia, developed in line with the national energy plan.
Rencana Umum Ketenagalistrikan Nasional (RUKN)
Indonesia's National Electricity Plan, which sets long-term national targets for electricity supply and generation capacity through 2060.
Rencana Usaha Penyediaan Tenaga Listrik (RUPTL)
PLN's ten-year Electricity Supply Business Plan, which sets out planned investments in generation, transmission, and distribution.
Renewable Energy Certificate (REC)
A tradable certificate that verifies a specified quantity of electricity was generated from renewable sources.
Ring-fencing
The legal or financial separation of a business activity from the rest of a company so that its revenues, costs, and risks can be assessed and financed independently.
T
Take-or-pay
A contract provision that requires the buyer to pay for a contracted quantity of electricity, whether or not the electricity is used.
U
United Nations Framework Convention on Climate Change (UNFCCC)
The international treaty that provides the framework for global climate negotiations, including the Paris Agreement.
United States Agency for International Development (USAID)
The U.S. government agency responsible for administering civilian foreign aid and development assistance.
