However, gas news service Interfax Global Energy said that gas could complement solar if the renewable energy source replaced costly oil-fired generation in Indonesia's eastern regions. 

 

The government hopes the regulations, introduced last month, will encourage renewable energy deployment in the more remote and under-electrified provinces of Kalimantan, Papua, Sulawesi, Maluku and Timor - which rely on expensive diesel-fired power.

 

In January, the Energy Ministry issued a new regulation which affects the principles of power purchase agreements. For the first time, in any material way, the Ministry seeks to impose certain requirements as to what provisions must be built into PPAs .

 

In the past, there were minor amendments to aspects of the PPAs, but the key bankability and risk allocation points have been left to negotiation between the state electricity company and the developers and their lenders.

 

However with the passing of MEMR Regulation 10, the state electricity company's freedom to negotiate terms has been curtailed.