Background
There has been a dash for captive power plants, particularly the coal-fired power plant, for the last few years in Indonesia. This coincides with the government’s efforts for the industrial downstream strategy. By 2023, around 23 GW of captive power plants are in operation, with 13-14 GW being coal-fired power plants (CFPP). The captive power plants’ capacity is expected to continue increasing until 2030, with an additional capacity of around 20 GW. Both the operational and additional captive CFPP capacities are predominantly supplying the energy needs for nickel smelting.
The JETP joint statement agreed between Indonesia and the International Partners Group (IPG) countries indicates that the peak emissions of the power sector in 2030 should be 290 MtCO2. Throughout the process, the published Comprehensive Investment and Policy Plant (CIPP) only includes the decarbonization pathway for grid-connected power plants (on-grid), leaving captive power plants that will be analyzed the following year. Therefore, the Technical Working Group (TWG) of JETP has been conducting an analysis for captive power plants effectively since February 2024. Activities undertaken to date include identifying possible interventions at the asset level using Multi-Criteria Decision Analysis (MCDA) and estimating the most optimal configuration for each asset using industry-standard modelling tools. The analysis will then be included in the updated CIPP document, which will be published in June 2025.
The IESR’s work will be a complementary analysis to JETP’s already ongoing captive power plant analysis. Given the limited time required to implement the JETP itself, this work will involve a project case study of the updated CIPP and provide recommendations to accelerate its implementation. The selection of case studies will be based on an analysis conducted using appropriate and relevant academic methodologies. The output of this work will be the basis for IESR advocacy to relevant stakeholders. One of the main beneficiaries is captive power asset owners. Other beneficiaries include the government, namely the Ministry of Industry and the Ministry of Energy and Mineral Resources (MEMR), especially in the developed database and the policy recommendations.
To provide a comprehensive analysis of the case study and present potential interference for decarbonizing captive power generation, legal aspects related to the decarbonization of captive power plants should be studied. The study should cover policies and regulations issued by both national and sub-national levels, as well as the internal private sector.
Objective
IESR is looking for partners with extensive experience and portfolios, capable of carrying out a study on “Mapping of Legal Framework for Captive Power Decarbonization”, with aims as follows:
- Identify the regulations and policies that influence the captive power plant decarbonization process in the private sector or industrial park.
- Analyze gaps in regulations and policies that have the potential to hinder or accelerate the process of decarbonization of captive power plants in the private sector or industrial park
- Analyze the process and factors that influence decision-making in the private sector or industrial park to decarbonize captive power plants in the private sector or industrial park.
- Prepare recommendations for the government or private sector from the analysis of legal aspects that can support the captive power plant decarbonization process.
Proposal Timeline:
Proposals will be accepted until 12:00 p.m. Indonesian Western Standard Time (WIB, GMT+07) on April 18, 2025. Any submissions received after this date and time will be regarded as inadmissible. Kindly submit the proposal to the IESR Energy Transformation Project Manager at deon@iesr.or.id and the Research Manager at raditya@iesr.or.id and cc: dwicahya@iesr.or. and reananda@iesr.or.id. Please include “RFP Captive Power – Legal Framework [Company/Individual Name]” in the subject line.
Request-for-Proposal_Study-Legal-Aspects-of-Captive-Power-Decarbonization-in-Industry.docx
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