Dialogue on Equitable Transition: Identifying the Role of the Private Sector in Socio-Economic Empowerment of Communities

Replay Event


Background

Indonesia is the third largest coal producing country after India and China in 2022. According to the Ministry of Energy and Mineral Resources, Indonesia targets coal production of 694.5 million tons in 2023, 0.47% higher than the previous year’s target. As of October 2023, Indonesia’s coal production has reached 567.2 tons or 81.67% of this year’s production target. Coal in Indonesia will mostly be sold to the export market (75%-80%) and consumed domestically (20%-25%). However, with the trend of energy transition, Indonesia’s coal demand seems to be declining, one of which is from India. India decreased its coal demand from Indonesia from 8.43 million tons to 6.11 million tons as of June 2023.

In addition to the downward trend in coal demand from abroad, the Indonesian government has endorsed several commitments that will affect the use of coal going forward in line with the energy transition agenda towards renewable energy. In 2022, the Government of Indonesia passed Presidential Regulation No. 112 of 2022 on the Acceleration of Renewable Energy Development for Electricity Generation, which explicitly stipulates a ban on the construction of coal-fired power plants starting in 2030. This commitment was supported through the signing of the Just Energy Transition Partnership (JETP) agreement between Indonesia and IPG and GFANZ. Through the CIPP document, the Government of Indonesia intends to achieve peak emissions in the power sector at 290 MT CO2 and a renewable energy mix of 34% by 2030. In addition, the document also states that Indonesia should strive for an equitable energy transition process where social, economic and environmental impacts are also a concern for policy makers. The existence of national and global policies also has the potential to affect the company’s business and also the socio-economic structure of communities around mining areas.

Extractive industry activities are often the main source of local revenue, but they also cause economic, socio-community and environmental losses. With the energy transition agenda, the government plans to limit coal consumption, which will lead to faster closure of coal mines and affect local community activities. In Law No.4/2009 on Mineral and Coal Mining, post-mining activities require business actors to restore the natural environment to its original state. This is also stipulated in Law No.40/2007 which requires companies in the natural resources sector to carry out Social Responsibility activities which are widely associated with community empowerment. By integrating activities that suit the economic needs of the community with the company’s plans, it is hoped that the community can independently develop their economic activities and can be free from dependence on the company. Thus, the role of the company and local government is important for post-mining activities.

Therefore, IESR intends to invite business actors to provide information and strategies for planning successful community and environmental empowerment programs in preparation for post-mining activities. This event is also expected to strengthen post-mining planning between the government and business owners in the fair energy transition agenda.

Objective

This activity has several objectives, namely:

  1. To obtain and disseminate information related to post-mining reclamation programs both in terms of planning and implementation as well as the challenges faced towards an equitable transition;
  2. Obtain and disseminate information on the role of businesses or industries in preparing for the impact of the energy transition on the community and the surrounding environment;
  3. Identify collaborative forms of post-mining activities to develop based on economic potential, natural resources, and people through the implementation of a just transition;

Presentation

Reclamation and Post-Mining, Koordinator PPNS Minerba – Dr. Y. Sulistiyohadi

Reklamasi-dan-Pascatambang-Koordinator-PPNS-Minerba

Download

Reclamation and Post-Mining Ombilin1 – Yulfaizon

Reklamasi-Pasca-Tambang-Ombilin1-IESR

Download

Indonesia Energy Transition Outlook 2024: Tracking Progress of Energy Transition in Indonesia: The Trend and Transformation in Achieving Indonesia Net Zero Ambition

Background

In 2023, through the presidential decree lifting the COVID-19 pandemic situation, it became a stimulus for economic recovery and national development to accelerate. Until the second quarter of 2023, economic growth in Indonesia was recorded at 5.17% (yoy) and showed economic strengthening in several regions in Indonesia. Meanwhile, Indonesia is projected to experience a population increase of 0.9% by 2023. This will certainly boost the level of domestic energy demand. On the other hand, external factors of energy security are caused by conflicts in Russia and Ukraine and the stability of the Middle East region, which will be able to affect the world energy commodity market. Indonesia is also a country that feels the impact.

Indonesia, as a country that has ratified the Paris Agreement through Law No. 16/2016, has emphasized its position to achieve net zero emissions by 2060 or earlier. This commitment is emphasized by increasing the national contribution target, or Enhance-NDC, by 31.89% with its own efforts and 43.20% with international assistance. In line with this, through the Just Energy Transition Partnership (JETP) commitment between the Government of Indonesia and donor countries that are members of the International Partner Group, Indonesia targets to achieve 44% of the renewable energy mix by 2030 and retire 1.7 GW of power plants from the operation of power plants in the network. However, the JETP target is considered less ambitious for efforts to achieve the target of controlling temperature rise by 1.5 oC. This is because it does not include the intervention of captive PLTU, which has a large role in contributing emissions in Indonesia.

Apart from the electricity sector, Indonesia’s energy transition also needs to be encouraged and accelerated in various other energy sectors, such as transportation and industry. On the demand side of national energy needs, the industrial sector is recorded to have a demand of 44.21% in 2022, of which 56.5% is met by coal. This condition is influenced by government policy through the Domestic Market Obligation (DMO) regulation. This policy can support the development of domestic industries that use national natural resources, but on the other hand, the use of coal in the industrial sector also increases greenhouse gas emissions. So it is necessary to control emissions and innovate in energy transformation in the industrial sector. Some large industries that need attention are the cement, iron and steel, and ammonia industries. In the transportation sector, through Ministerial Decree No. 8 of 2023, 38 mitigation action steps have been established that focus on the electrification of land vehicles, including motorcycles, cars, and public vehicles, as well as the use of low-carbon fuels in sea and air transportation.

These developments show that Indonesia’s energy transition is entering the take-off phase. The question is, is the current energy transition process in line with Indonesia’s climate crisis mitigation and sustainable development ambitions? If not, what options can Indonesia focus on to accelerate the energy transition in the near future?

The progress and development of energy transition in Indonesia are specifically reviewed in one of IESR’s flagship reports launched at the end of each year: the Indonesia Energy Transition Outlook (IETO). Published since 2017, the IETO, previously titled Indonesia Clean Energy Outlook (ICEO), aims to regularly monitor the development and progress of Indonesia’s energy transition and identify challenges and opportunities for the following year. The report covers policy analysis and review, technology status updates, and the energy transition ecosystem.

Over the years, IESR has worked to improve the coverage and rigor of its analysis in this report. The sixth edition of the IETO also gathers various perspectives from stakeholders in the energy sector and addresses them with in-depth studies to deliver strategic analysis on the energy transition and transformation to a low-carbon energy system in the country.

Through the IETO, the IESR intends to inform policymakers and all stakeholders in the energy sector on the effectiveness of policies and improvements needed to help accelerate the development and transition of clean energy in the country. By doing so, it is hoped that Indonesia can ensure energy security, a competitive economy, and transition to a sustainable energy system in the near future.

IETO 2024 will be launched in a special meeting to get views and perceptions from policymakers and actors on the upcoming trends in the energy transition. Discussions in this meeting will highlight the energy transition processes taking place in various energy sectors in Indonesia and be followed by an analysis of the energy transition readiness framework in Indonesia’s electricity sector, as well as lessons learned in 2023 to address challenges in driving the energy transition in 2024.

Objective

The Indonesia Energy Transition Outlook (IETO) 2024 launch meeting and discussion was organized with the following objectives:

  1. Inform and introduce the IESR flagship report, Indonesia Energy Transition Outlook (IETO).
  2. Review and evaluate the development of the energy transition (fossil energy, renewable energy, and energy efficiency) in Indonesia during 2023 in the context of the impact of government policies and regulations issued to relevant stakeholders, as well as the review in 2024.
  3. Review the evaluation and transition readiness framework for Indonesia’s electricity sector with policymakers and stakeholders.
  4. Provide a policy dialogue space for stakeholders, including policymakers and businesses, as well as civil society organizations, in the process of formulating and implementing more sustainable energy transition policies.

Dissemination Webinar on Indonesia’s Transportation Decarbonisation Roadmap

Replay Streaming


Background

Indonesia has endorsed a commitment to keep global temperature below 1.5 OC in line with the Paris Agreement through regulation No. 6 of 2016. Although the Indonesian government has put its NDC targets (41% emission reduction in 2030 compared to BAU, and net-zero emissions in 2060), it is still not enough to fulfill the Paris Agreement goals. The energy sector is projected to dominate Indonesia’s future emissions. In addition, from a technical and economic perspective, the energy sector in Indonesia can achieve zero emissions by 2050.

The transportation sector accounts for 23% of Indonesia’s total energy consumption in 2021, replacing Industry as the largest energy-consuming sector since 2012. Energy consumption by the transportation sector is dominated by petroleum fuels such as gasoline, diesel and aviation fuel. In 2017, this sector contributed around 26% of the energy sector’s greenhouse gas (GHG) emissions, or around 147 million tons CO2e. This figure does not include GHG emissions lost in the upstream oil processing industry, which contributes about 7% of the energy sector’s associated GHG emissions. In 2021, the land transportation mode contributes about 90% of the total transportation sector emissions, followed by the air and maritime transportation sectors.

The government has undertaken several initiatives and policies in the transportation sector to reduce emissions, such as the use of biofuels, public vehicles (mode shift), and most recently the move to electric vehicles. One of the drivers is the high increase in fuel imports that has occurred since 2004. However, these policies have not been anchored by a common planning document (or so-called roadmap), and as such, there is potential to optimize efforts and costs in implementing existing initiatives and promoting new ones to support decarbonization of the transport sector. Therefore, in this program focus, IESR is currently modeling a roadmap that can provide guidance on what aspects or strategies to prioritize to effectively reduce emissions in the transportation sector, using system dynamics methodology.

Objective

To further disseminate the findings of the system dynamics modeling of the roadmap for decarbonization opportunities in the transportation sector of the Jabodetabek national and regional model structures

More specifically, the discussion in this meeting is expected to:

  1. Disseminate and share information on Indonesia’s transport decarbonization roadmap to relevant key stakeholders, including policy makers, transport actors, associations, and research institutions.
  2. Receive inputs and validate the transport decarbonization roadmap from relevant key stakeholders.
  3. Discuss key and actionable policies required to implement the transport sector decarbonization roadmap at national and regional scales.
  4. Identify future challenges, opportunities, and support from relevant key stakeholders

Materi Presentasi

Dissemination Webinar on Indonesia’s Transportation Decarbonisation Roadmap: Emission Reduction Projection and Policy Intervention in Modal Share and Electric Vehicles – Rahmi Puspita S, Fauzan Ahmad & Arij Ashari N

Slide-deck-Presenter-Diseminasi-Dekarbonisasi-Transport-5-Oktober-2023-

Unduh

Pemodelan Dinamika Sistem (System Dynamics) Transportasi: Dekarbonisasi – Dr Muhammad Tasrif

Slide-deck-Presenter-Pengantar-Model-Diseminasi-Dekarbonisasi-Transport-5-Oktober-2023

Unduh

Emission Reduction Projection and Policy Intervention in Modal Share and Electric Vehicles – Prof. Dr. Agus Taufik Mulyono

Slide-deck-Penanggap-Prof.-Agus-TM-Diseminasi-Dekarbonisasi-Transport-5-Oktober-2023-

Unduh

Implementing the Energy Transition: Policies in Colombia, Germany, India, Indonesia and South Africa

Background

The Global Stocktake is clear: All countries need to raise their ambition to curb their emissions effectively, to a degree that is fair to their development status.

But ambitious targets are not sufficient on their own; policies need to be in place and be implemented effectively. Climate Transparency’s new Climate Policy Implementation Check has been designed to assess, rate, and monitor the implementation status of policy instruments along four categories: legal status, institutions and governance, resourcing, and oversight.

Facilitated by the Climate Emergency Collaboration Group, we analyze the implementation of a variety of climate policies in the power sector of India, South Africa, Indonesia, Colombia, and Germany.

Ahead of COP28, we want to discuss possibilities and implications for international cooperation to effectively implement the energy transition away from coal and towards a renewable energy future. With their strong interlinkages in coal production and consumption, the countries we analyze exemplify the possibilities and challenges of successful transformations, and they will be key to the debate on how to change long-standing international relationships from brown to green.

Agenda

  1. Selected Energy Transition Policies in India, South Africa, Indonesia, Colombia, and Germany: Implementation status and outlook
  2. International implications of domestic energy transitions

Language

This event uses the English language

Grounding the Energy Transition Narrative

Jakarta, 13 October 2023 – As Indonesia’s ambition to realize a Golden Indonesia by 2045 and achieve net zero emission (NZE) by 2060 becomes clear, the government and related parties need to work together to strengthen public understanding of the energy transition, as one of the efforts to achieve these targets.

Agus Tampubolon, Project Manager of Clean, Affordable, and Secure Energy for Southeast Asia (CASE), Institute for Essential Services Reform (IESR), mentioned that the perspective on nature and the use of renewable energy in Indonesia should be ingrained in every individual’s mindset and life.

“Every person has an innate tendency to safeguard their belongings. Therefore, collectively acknowledging the value of nature, forests, oceans, and the environment as crucial components can inspire us to take more eco-friendly actions,” Agus said at Indonesia Sustainable Energy Week (ISEW) 2023.

The relevance of the energy transition issue to people’s lives will also increase understanding of the transition to renewable energy and encourage changes in behavior to become more environmentally friendly; it also promotes increased action to encourage policies that support the adoption of renewable energy.

“The energy transition is multidimensional, not only technical but also social. Everyone must be involved and contribute to an equitable transition,” Agus said. 

On the other hand, efforts to raise public awareness of the energy transition should promote a positive attitude towards Indonesia that can achieve emission-free targets according to the Paris Agreement. Providing reliable data support will help dispel pessimism and encourage support for renewable energy initiatives.

“Pessimism can come from an attitude of helplessness and the view that getting out of the centuries-old fossil energy trap is impossible and expensive. If we stick to this polluting energy, the country will incur much more expensive costs, accelerating global temperatures that exacerbate the climate crisis,” he said.

The availability of data related to the potential of renewable energy potential in the country, studies showing that Indonesia can achieve zero emissions faster, actionable recommendations that can be implemented and measured, and collaborative advocacy efforts involving various community groups are several ways to spread optimism and encourage the acceleration of energy transition for Indonesia to achieve zero emissions faster.

Study Launch: Just Transition in Coal-Producing Regions in Indonesia Case Study of Muara Enim Regency and Paser Regency

Background

Coal holds significant importance for Indonesia, both as a consumer and as one of the world’s largest producers. As of 2022, Indonesia stands as the world’s third-largest coal producer, trailing only behind India and China. It also ranks among the globe’s leading coal exporters, having exported a total of 360.28 million tons, marking a 4.29% increase from the previous year. Looking ahead to 2023, the Indonesian government maintains ambitions for even higher coal production. The coal industry plays a pivotal role in the national economy. In 2022 alone, it contributed approximately 3.6% to the national GDP, accounted for 11.4% of the total export value, generated 1.8% of the national state revenue, and provided employment to 0.2% of the population.

On the other hand, coal demand is expected to decline due to the ongoing trend of transitioning towards renewable energy and the commitments outlined in the Paris Agreement, aimed at limiting temperature rise to below 1.5°C. According to IESR (2022) estimates, Indonesia’s total coal demand—both domestic and for export—is projected to decrease by approximately 10% after 2030, considering the country’s existing commitments. Furthermore, the Government of Indonesia has enacted Presidential Regulation No. 112 of 2022, which focuses on expediting the development of renewable energy sources for electricity generation. This regulation explicitly imposes a ban on the construction of coal-fired power plants, effective from 2030 onward. This national commitment is reinforced by the endorsement of the Just Energy Transition Partnership (JETP) agreement between Indonesia and the International Partners Group (IPG), as well as the Glasgow Financial Alliance for Net-Zero (GFANZ). This alliance aims to mobilize a substantial USD 20 billion in funding to facilitate an just transition to clean energy, which includes provisions for the early retirement of coal power plants.

Indonesia possesses coal reserves totaling 33.37 billion tons, distributed across several provinces including East Kalimantan, South Sumatra, South Kalimantan, Central Kalimantan, and various other areas. While these regions reap benefits from the coal industry sector, they also endure significant drawbacks.

IESR’s study, “Redefining Future Jobs,” conducted in 2022, illustrates that the advantages accruing to coal-producing regions are disproportionate to the hardships faced by their inhabitants. Furthermore, many communities in the surrounding areas bear the brunt of injustices, encompassing unequal economic impacts, land degradation, and health risks. Addressing these inequities must be a central focus for the government as it formulates plans for future energy transition.

IESR conducted a study on the coal industry’s impact within coal-producing regions in Indonesia, focusing on two major coal-producing districts: Muara Enim and Paser. The study unveiled various forms of injustice experienced by communities residing near coal mining sites, encompassing economic, social, and environmental dimensions

Among the observed injustices in coal-producing areas are income disparities between residents, workers, and capital owners, local community asset loss, and a decline in quality of life around coal mines. Addressing these issues necessitates comprehensive solutions aimed at mitigating these injustices and fostering opportunities for positive change within communities, ensuring an just energy transition.

By proactively tackling these injustices, the government can ensure that the transition process remains just for all stakeholders. With the Indonesian government’s commitment to a greener energy transition, the need arises for comprehensive development planning that promotes inclusivity and participation, particularly in each of Indonesia’s coal-producing regions.

Therefore, IESR intends to host a launch event for the study results of the Just Energy Transition in Coal Producing Areas in Indonesia. This event will bring together the national government, various experts from academia, civil society organizations, and international organizations to engage in a dialogue about the impact of the coal industry and the necessary preparations for an just energy transition in Indonesia.

Objective

The launch of the study results has several objectives:

  1. Delivering the findings of IESR’s Just Energy Transition in Coal Producing Regions’ study to the public.
  2. Gathering input on the outcomes of the study ‘Just Energy Transition in Coal Producing Areas’ to create practical recommendations for relevant parties.
  3. Collecting inputs and recommendations from various stakeholders concerning just energy transition and the mapping of potential economic sectors in coal-producing areas.

Enhancing understanding by providing practical recommendations to key policymakers to support the achievement of an just energy transition in coal-producing regions in Indonesia.

IESR: Indonesia Needs Comprehensive Package Policy for Energy Transition

Jakarta, 27 June 2023 – The urgency to shift energy transition into a cleaner, more sustainable one has become increasingly crucial, as highlighted by the IPCC synthesis reports, which states that global temperature has already increased 1.1 degree Celsius. Energy, as the driver of economic growth, has been a key factor in economic activities since the very beginning of fossil minerals mining. However, transitioning to cleaner energy systems brings consequences of decreased coal demand, posing a serious threat to regions heavily reliant on the coal economy.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform during the panel discussion of the ASEAN Sustainable Energy Finance on Tuesday, 27 June 2023, emphasized the situation in several provinces in Indonesia which need to consider alternative economic streams, as their local revenue currently comes from coal mining-related activity.

“We need to pay attention to some provinces such as East Kalimantan, which produces 40% of Indonesian coal, and South Sumatera which produces 15%. We need to build local capacity to generate revenue from sectors other than coal,” Fabby said.

Fabby added that the government needs to prepare a comprehensive package of transition finance. The funding should cover not only the technical costs, such as retiring coal fleet, development of renewable energy, improving the grid, but also preparing the community, particularly those employed in the coal mining industry, to adapt into the new labor market. It includes the reskilling and retraining to align their skill with market demand.

“The national government must provide special assistance for regions heavily reliant on coal economics,” Fabby emphasized.

Eunjoo Park-Minc, Senior Advisor on Financial Institutions Southeast Asia of Financial Futures Centre (FFC), agreed on the significant role of government during the transition, especially in designing a supportive policy framework which enables the private sector to participate.

“The role of the investors during this transition time is to develop innovative financing mechanisms. To make it more catalytic, we need a supportive policy framework to make it work,” she said.

Besides that, Eunjoo pointed out the need for international cooperation, as most of the (transition) projects are taking place in the developing countries while the financing primarily comes from the developed countries. 

The Asian Development Bank (ADB), as one of the multilateral banks financing the energy transition emphasized the importance of justness aspects. This is explained by Veronica Joffre, Senior Gender and Social Development Specialist at ADB. 

“One of the aspects of ETM (Energy Transition Mechanisms) is the justness. It means potential social impact should be assessed and managed, including employment, supply chains, and the environment,” said Veronica.

She added that as achieving net-zero emissions is the path for the future, the transition towards that direction should be consciously designed.

Possible Intervention Options to Reduce Energy Sector Emissions

Jakarta, 30 May 2023 – Transforming the power sector into a low carbon energy system is an absolute necessity. One of them is to pursue emission reduction targets in order to maintain the increase in global average temperature to be at the level of 1.5 ℃. It is stated in the IPCC AR6 Synthesis Report that from 2011 – 2020, the average global temperature has increased by 1.1℃, amidst various human activities that continue to produce emissions. The energy sector is one of the largest contributors to emissions in Indonesia after forestry and land use. Plans to develop fossil-based energy generators are an obstacle in efforts to reduce emissions from the electricity sector.

Indonesia is in the top three rankings as a country with CFPP in the pipeline after China and India. A total of 13.8 GW of CFPP with various development progresses have been included in the PLN RUPTL 2021 – 2030.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), during the launching report and public discussion ‘Delivering Power Sector Transition’ said that one of the reasons for the increase in the global average temperature is the burning of fossil fuels.

“Thus, reducing coal capacity in the electricity system is one of the key actions in efforts to achieve the target of the Paris Agreement, which is to keep global temperature rise at 1.5 degrees Celsius,” he said.

In the Indonesian context, commercial issues have become one of the aggravating factors for the coal phase-out. Dadan Kusdiana, Director General of New and Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources, conveyed that coal phase out still requires joint encouragement from all parties.

“We still have to fight for this (phasing out coal and adding renewable energy capacity). Because, according to current regulations, they are not in the same regulations. However, I want to encourage that the process must be done in the same rhythm,” he said.

IESR considers the coal phase-out in Indonesia as an important matter, because as one of the recipients of the Just Energy Transition Partnership (JETP) funding commitment, Indonesia has an obligation to reach a peak emission of 290 million tons of CO2 in 2030 and increase the renewable energy mix by 34% in 2030.

“To achieve the target of the Paris Agreement, the target set by JETP is actually not enough. However, this can be a starting point for accelerating the development of renewable energy in Indonesia,” explained Raditya Wiranegara, IESR Senior Researcher who is a member of the study author team.

Raditya added that in the Delivering Power Sector Transition report, IESR found that of the 13.8 GW PLTU planned for construction in the 2021-2030 RUPTL, 2.9 GW could be cancelled, 10.6 GW needed to end operations early, and 220 MW were considered for repurposing with renewable energy-based power plants such as biomass.

Akbar Bagaskara, power sector researcher in IESR added that the reduction in emissions will be directly impact the cost of the electricity system.

“The cancellation of CFPP construction accompanied by early retirement for the existing CFPP will be the best scenario for reducing emissions. Cancellation of CFPP in the pipeline will reduce emissions significantly. However, it is felt that this is still not optimal to achieve the JETP target in 2030,” he added.

IESR calculates that to achieve the JETP target, at least 8.6 GW of coal must be retired before 2030, followed by the phase out of 7.6 GW of coal-fired power plants before 2040.

Gigih Udi Utomo, Director of Energy Conservation at the Ministry of Energy and Mineral Resources, commented that the coal phase-out and the cancellation of the CFPP need to be seen as two different things.

“When we talk about the early retirement road map, we are referring to the mandate of Presidential Decree 112/2022. Early retirement is for existing CFPPs, while this 13.8 GW topic is for CFPP that is not yet operating and is already in the RUPTL, so that each of the options and scenarios offered in the study needs to be explored again and requires dialogue with relevant stakeholders,” he explained.

Independent Power Producers as PLN’s partner in meeting national electricity demands state that energy business actors are basically willing to support the government in the transition.

“However, what needs to be noted is that the participation of projects that will be canceled or CFPP units whose retirement age will be accelerated must be based on the voluntarily principle not mandatory because basically the project owner has secured the contract with PLN,” said Chairman of the Association of Indonesian Private Electricity Producers (APLSI), Arthur Simatupang.

Kirana Sastrawijaya, Senior Partner of Umbra, reminded that it is important to review the PPA (Power Purchase Agreement) document between IPPs and PLN especially for the proposal to cancel the CFPP construction.

“Presidential Decree No. 112/2022 can be used as a legal basis for phasing out coal, but there needs to be list of criteria of which CFPPs unit eligible for phase-out. This Presidential Decree can also become a basis for canceling a CFPP, although it does not specifically talk about cancellation,” she said.

In the context of legal law, Karina stressed that potential legal disputes could occur. So, in addition to the applicable government regulations, the contract document (PPA) must be a reference document because it regulates in detail various restrictions on the parties and funders.