Procurement of RE: What are the main issues observed in PLN’s procurement process and why is it necessary to improve this process?
The CIPP has recommended ambitious targets to increase renewable energy capacity in Indonesia and, to reach those targets, PLN will have to procure far more renewable energy generation than it has in the past, and at a much faster pace to get them in operation by 2030.
The CIPP has identified several important issues that have slowed down procurement, including:
* Lack of project preparation – Some of the recent RE procurements were delayed due to lack of adequate tender preparation and documentation.
* Land acquisition – Land procurement and permitting has been one of the major barriers to renewable projects’ expansion in Indonesia as developers are generally expected to acquire all the land needed for the plant site and the transmission lines needed to connect the plant to the nearest substation.
* Assigning of PLN subsidiaries in RE projects – PLN increasingly requires the successful bidder to join with a PLN subsidiary to carry out the project in both majority and minority shares.
These and other issues are set out in detail in the CIPP specifically in Section 8.3.2.1 to 8.3.2.3.