In 2026, Indonesia’s power distribution market reform will accelerate, and PLN functions will undergo a major transformation.

In 2026, the call for market-oriented reform of Indonesia's power distribution industry continues to rise. The East Asia Forum, an authoritative industry organization, released a special research report, clearly pointing out that the full-chain monopoly model and decentralized power distribution governance system of Indonesia's National Power Company (PLN) have become the core bottleneck for new energy grid integration, distribution network upgrades, and market-oriented development of the industry. Promoting PLN's functional transformation and liberalizing the power distribution market have become the core direction of annual industry reform.

For a long time, Indonesia's power transmission, distribution, sales, and dispatch have been exclusively monopolized by PLN. The power distribution market lacks a competition mechanism and suffers from many problems such as low construction efficiency, lagging intelligent upgrades, cumbersome new energy grid connection approvals, and high operation and maintenance costs. With the rapid growth of Indonesia's new energy installed capacity, distributed photovoltaics, energy storage, and user-side microgrids have been implemented in large numbers. The traditional monopoly power distribution model is no longer able to adapt to diversified and market-oriented electricity demand, severely restricting the progress of energy transformation.

In 2026, a consensus on industry reform has been basically formed, clearly promoting the transformation of PLN from a "full-chain power operator" to a "power system planning, dispatching, and supervision entity", gradually liberalizing power distribution construction, operation and maintenance, user-side power distribution services and other subdivisions, and orderly attracting private capital and foreign-funded enterprises to participate in the investment and operation of power distribution projects. At the same time, it will simultaneously simplify the new energy grid connection approval process, improve the market-based pricing mechanism for power distribution, force the intelligent and refined upgrade of the distribution network, fully activate the vitality of the Indonesian power distribution market, and promote the transformation of the industry from administrative monopoly to market-oriented and professional development.