Ecobiz.asia – Indonesia plans to issue a revised grid code in 2027 to enable greater integration of renewable energy and battery storage while maintaining electricity system stability and reliability.

The Energy and Mineral Resources Ministry (ESDM) is revising Ministerial Regulation No. 20/2020 on grid code provisions in collaboration with state-owned electricity company PT PLN, the United Nations Office for Project Services (UNOPS) and NIRAS, Lucky, the ministry’s sub-coordinator for power plant operation regulations, said on Tuesday (Oct. 202, 2026)..

The study and draft revision are targeted for completion by the end of 2026, with the new regulation expected to be issued next year. Lucky spoke at a seminar on flexible electricity markets organized by the Institute for Essential Services Reform (IESR).

“The main objective is to ensure that renewable energy, particularly variable renewable energy (VRE) and solar power, as well as batteries, can be accommodated in greater volumes while maintaining system reliability,” he said.

The revised rules are expected to introduce provisions for ancillary services that help maintain grid stability as the share of variable renewable generation increases. These services include frequency and voltage regulation, inertia provision, system strength, oscillation damping, black-start capability, demand response, congestion management and ramping capabilities.

The revision will also address battery energy storage systems, pumped-storage hydropower plants and grid connection requirements for electricity-intensive and emerging users, including data centers, smelters and electric vehicles.

Beyond technical grid requirements, the proposed changes could support a broader shift toward a more flexible electricity system. Lucky said the effectiveness of ancillary services would depend not only on updated technical rules but also on electricity market reforms, including changes to existing power purchase agreements (PPAs).

Under the current take-or-pay approach, power producers may receive payments under contractual arrangements even when their electricity is not fully dispatched. Lucky said future arrangements should place greater emphasis on plant performance and capacity, while treating ancillary services as remunerated services rather than voluntary contributions.

However, introducing paid ancillary services presents challenges under Indonesia’s vertically integrated, single-buyer electricity market structure, he said.

The government is therefore considering changes to contractual and market arrangements to support greater system flexibility. Lucky identified grid code adaptation as one of the most immediate regulatory steps expected over the next one to two years.

The proposed revision is intended to prepare Indonesia’s power system for a higher share of renewable energy while ensuring that grid operators have the technical and operational tools needed to manage fluctuations in generation and maintain reliable electricity supplies. ***