Indonesia Accelerates Waste-to-Energy Program with Simplified Regulations

Ambitious Electricity Generation Targets

The Indonesian government has set an ambitious target to generate 452 MW of electricity from waste by 2034 through the development of multiple waste-to-energy power plants (PLTSa) ¹

. This initiative is part of the country's broader renewable energy strategy and waste management efforts. The potential capacity is distributed across various regions including Java, Madura, Bali, Sumatra, and Sulawesi.

Regulatory Framework and Incentives

To facilitate the development of WTE projects, the government has introduced Presidential Regulation No. 109/2025 concerning urban waste management through waste-to-renewable energy based on environmentally friendly technology. This regulation addresses previous bottlenecks by ⁴

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Source 2

https://finance.detik.com/energi/d-8217796/zulhas-blak-blakan-proyek-sulap-sampah-jadi-listrik-mandek-11-tahun

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1. Simplifying the permitting process
2. Guaranteeing land provision for WTE facilities
3. Ensuring waste supply as energy source
4. Providing clear revenue streams for operators

Revenue Streams for WTE Operators

WTE facility operators can generate revenue from three primary sources ²

:

1. Tipping fee from local governments for waste processing
2. Government subsidies
3. Electricity sales to the grid

The electricity tariff has been increased to 20 cents USD per kWh under the new regulation, representing a 50% increase from previous rates. This adjustment aims to improve the financial viability of WTE projects ²

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Implementation Progress

The government has identified 33 potential locations for WTE facilities, with 7 sites already prepared for development. One such location is in Tangerang Selatan, where the facility is planned for the Cipeucang landfill area with a dedicated 5-hectare land allocation ³

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Challenges and Government Support

Despite the progress, the WTE sector in Indonesia has faced significant challenges, including complex permitting processes and bureaucratic hurdles that have delayed project implementation. Minister Zulkifli Hasan noted that previous WTE projects had stagnated for 11 years due to these issues ⁵

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To address these challenges, the government has committed to processing permits within 3 months for qualified investors, with support from the Investment Management Agency (BPI Danantara). The streamlined process aims to accelerate project implementation and attract more private sector participation ⁴

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