Indonesian Government Is Resolute In Fixing Its Broken Electricity System

Posted on Apr 18, 2010

As a follow up of the meeting between the Indonesian President with all of the Ministers and all Governors from Indonesia at the Cipanas Palace on 2 to 3 February 2010, the Government has issued Presidential Instruction No. 1 year 2010 on the Acceleration of Implementation of the Year 2010 National Development Priorities.

Indonesian ESDM Minister Dr Darwin Zahedy Saleh, SE, MBA

Currently the Indonesian total generating capacity is around 30,941 MW which consist of 4,948 MW in Sumatra, 23,009 MW in Java-Madura-Bali, 1,175 MW in Kalimantan, 1,195 MW in Sulawesi, 265 MW in Nusa Tenggara, 182 MW in Maluku and 168 MW in Papua.

83% of the total installed capacity or 25,752 MW are operated by PT PLN (Persero) itself, 14% or 4,269 MW operated by private companies (Independent Power Producer – IPP), and 3% or 920 MW operated by integrated electrical companies ( Private Power Utility – PPU).

From all of 26 main electrical systems, a total of 15 systems (Sumatra, Nias, Tj. Pinang, Bangka, Pontianak, Barito, Sampit, Bontang, Poso, South Sulawesi, Kendari, Ambon, Ternate, Jayapura, and Lombok) experienced a deficit condition. Deficit condition is referred to situation whereby selective brownout for some customers can not be avoided.

The high electricity growth demand that reached an average of 9% per year is not balanced by the growth in electricity supply and has caused crisis condition in some areas. Crisis condition is referred to situation whereby the electricity supply capacity is lower than the demand / electric load and there is no new generation on the system within the next two years.

In an effort to fix the problem, the Government together with PT PLN (Persero) has formulated an action program which is divided into 3 (three) steps, Short Term (<1 year), Medium-Term ( 1 – 2 years), and Long Term (> 2 years).

Steps performed in short time, among others, is to buy excess power owned by private companies, this has added 132 MW of additional power (104 MW from the western part of Indonesia and 29 MW from the eastern part of Indonesia), genset rental plan with an additional total of 700 MW (210 MW or 30% are already realized), accelerate generation and network maintenance time, network reconfiguration, and urging the people to reduce their electricity usage.

On the medium term, action steps taken is genset rental, gensets and transformer repairs (retrofit), power plant / transformer relocation, network / transformers de bottle-necking, construction of small-scale power plant with total capacity of 700 MW and acceleration of Phase I 10,000 MW project completion which so far has seen 300 MW from Labuan plant in operation.

The rest of Phase I projects are in stages as follows: 3,976 MW in the year 2010 amounted to, 3,506 MW in the year 2011, 996 MW in the year 2012, 960 MW in the year 2013, and 200 MW in the year 2014.

For the long term the 10,000 MW Phase II project completion, completion of IPP projects and the addition of network / transformer.

With regard to this PLN will immediately conduct an evaluation of IPP contracts by doing a business to business renegotiation with the opinion BPKP to IPPs that have been carrying out development (category 1), already in the financial closing (category 2), and cancel the contract altogether for IPPs that has no concrete step in the implementation of PPA (category 3) as stipulated in the PPA;

PLN is also asked to be more focused on the electricity development of western and eastern regions given that the electrical system in Java is relatively secure, and the government will soon implement regulations of Law Number 30 Year 2009 concerning Electrical Power in order for local government to play an active role in the provision of electricity and tariffs.
(ESDM)