2026 Indonesian power distribution equipment localization policy upgrade, foreign supply chain comprehensive adjustment

In 2026, the Indonesian Ministry of Industry officially revised the power distribution and new energy equipment industry management regulations to further strengthen the hard requirements for local content of equipment. This has become the core policy change in the Indonesian power distribution industry this year and directly promotes the comprehensive localization adjustment of the supply chain and production capacity layout of foreign-funded power distribution companies. Compared with the old regulations, this policy upgrade has stricter standards, wider coverage, and comprehensive coverage of core equipment categories in the power distribution industry, forcing the reconstruction of the industry's supply chain.

The new regulations clearly stipulate that the proportion of local procurement and production of core power distribution equipment such as photovoltaic modules, grid-connected inverters, high and low voltage distribution cabinets, transformers, and distribution switches shall not be less than 40%, and this proportion will increase year by year, and is expected to increase to more than 55% in 2028. For energy storage and power distribution supporting projects, Indonesia has added special requirements, forcing projects to give priority to energy storage batteries produced from local nickel resources. Core energy storage and power distribution equipment must be assembled and debugged locally to prevent pure imported equipment from being put into use directly.

After the implementation of this policy, it completely changed the previous pattern of Indonesian power distribution equipment being highly dependent on imports. In order to meet compliance requirements, domestic and foreign leading power distribution companies have adjusted their layouts and implemented production capabilities through building factories in Indonesia, joint production, and local supply chain cooperation to reduce dependence on imports. At the same time, the localization policy has also led to the upgrading of Indonesia's local power distribution manufacturing industry, promoted the technological iteration of local enterprises, and formed a new power distribution industry ecology of "local production, local supporting equipment, and local operation and maintenance", which has profoundly affected the industry competition pattern.