Background

In 2008 Indonesia had 27.8 GW of installed generating capacity. Most of Indonesia’s generated electricity, around 86 percent, is from fossil fuels, eight percent is from hydroelectric, and six percent is from geothermal and other renewable sources. Coal accounts for the largest share at 47 percent, followed by natural gas at 33 percent, and oil at 19 percent.  Electric power demand has been increasing at an average rate of 8 percent per year.

The state owned utility PT PLN (Perusahaan Listrik Negara) is the most significant company in the electric power sector in Indonesia, owning and operating 86 percent of the country’s generating capacity and until 2009 a legal monopoly in electric distribution.

PLN’s top three priorities are universal access, network reliability, and quality of service.

As of 2009, only 65 percent percent of Indonesia’s population had access to electric power. There has been a chronic shortage of power in areas where there is electric power, and power outages have been a recurrent problem.  Just recently a major upgrade to two existing 500 kV substations and the construction of a new 150 kV substation to increase capacity and security of supply was announced.

In 2006, the government initiated a “fast track” plan.  Coal is abundant in Indonesia and during the first phase it is intended to add 10 GW of primarily coal-fired generation capacity to the grid by 2013.

Construction of new power plants and transmission lines in Indonesia will continue to increase demand for electric power equipment such as turbines, substations, transmission and distribution equipment, engineering services, engineers and skilled labour.   The government has estimated that the financial requirement for development of electric power during 2004-2013 is US$ 31.4 billion for development of new generating capacity of 23 GW, 17,000 kilometers of new transmission networks, major relay stations, distribution networks, and rural electricity systems.  

Renewable Energy

The Government plans to increase the use of renewable energy to 15 percent of electric generation capacity by 2025.

The second phase of the “fast track” plan targets an additional 10 GW, primarily of cleaner sources of generation such as natural gas, geothermal and other renewables.  The target for geothermal is 4 GW. Indonesia has abundant geothermal resources and was the third-largest geothermal generator in the world in 2008.  The Government estimates that Indonesia could generate up to 28 GW from geothermal sources.  In addition small micro hydropower plant projects have been developed in West Java and Banjarnegara.

Smart Grid

Earlier this year Suroso Isnandar of PLN said that PLN is in the early planning stage for three small smart grid pilots in Jakarta, Batam, and Bangka.  But he said that smart grid is secondary to PLN’s top three priorities, universal access, network reliability, and quality of service.