II Electric Power Industry in Indonesia

1. Electric Power Industry in Indonesia

1-1 Basic Structure of the Electric Power Industry

Ministry of Energy and Mineral Resource (MEMR) takes charge of major affairs such as establishment and execution of policy and regulation for power industry. PLN, IPP, and CPP deal with business in electric generation part among the power industry. PLN which is a state owned company is monopolizing the Transmission and Distribution part.

1-2 General Status of PLN ⁷⁾

⁷⁾ Extract from PLN Statistics 2005

PLN is a state owned Power Company and charge of supplying the electricity for the most part of Indonesian territories that consist of more than 13,000 islands. PLN has 6 subsidiaries , 1 joint venture company ⁹⁾, 1 transmission strategic business unit, and 5 distribution strategic business units. The Committee composed of president and 5 directors makes the managerial decisions in PLN. The Board of Commissioners composed of representatives who come from Ministry of Energy and Mineral Resources, Ministry of Finance, and Ministry of State Owned Enterprise control the PLN.

power generation company (PT Indonesia Power, PT PJB), telecommunication company (ICON), engineering company (PT PLN E), company to deal with business in power supply in islands (PT PLN Batan, PT PLN Tarakan)

⁹⁾ geothermal power company

1-2-1 Customer

PLN sold electricity of 107,033GWh to 34,559 thousand customers in 2005. The number customer and the electricity sales in Java-Bali region accounts for 66% of total customer, 80% of total sales in Indonesia respectively. In terms of class of customer, the number of residential customers recorded 93.1% of total customers, business 4.19%, public 2.56%, and industrial 0.13%. But with the terms of sales of electricity, sales of industrial customers recorded 39.66% of total sales, residential customers 38.48%, business 14.93%, and public 5.96%.

After the Asian financial crisis, sales of electricity had risen but dropped a little due to limit of capacity of electricity generation during from 2001 to 2003.

1-2-2 Generation

The whole volume of power generation in Indonesia recorded 127,370GWh in 2005. Volume of power generation grew at 7% per year from 2000 to 2005. In the meantime, as of 2005, PLN had dominated for 77.1% of the whole volume of power generation in Indonesia.

Total capacity of power generation in Indonesia was 25,777MW in 2005. PT PLN took 87.3% of total capacity, which is 22,515MW. Private power generation companies shared rest of them, which is 3,262MW. The total capacity of power generation in Indonesia broke down to 89.9% of thermal power, 7.7% of hydro power, and 2.4% of geothermal power.

1-2-3 Transmission & Substation

Transmission and distribution parts which have been monopolized by PLN. Due to the lack and preponderance of transmission and distribution facilities, PLN can’t meet electricity demand. Improvement of transmission and distribution system as well as expansion of capacity of power generation is also a very urgent problem.

As of 2006, total length of transmission line is 32,730C-km and by voltage level it broke down to 4,507C-km of 70kV, 23,175C-km of 150kV, and 5,048C-km of 500kV. Indonesia has propelled to expand transmission line as a major development policy since 1970′s. So some regions such as Java, Bali, Sumatra, and Kalimanatan could increase their facilities to provide electricity. But those areas are still severe condition which is lack of facilities to provide electricity in Sulawesi, and Irian Java. Indonesia is the nation with lots of islands. Because of the lack of funds necessary to install the transmission lines between islands, it’s difficult to expect efficiency in power industry and make a flexibility in demand change.

1-2-4 Distribution

As of 2006, PLN had 246,775C-km medium voltage line and 326,274C-km low voltage line. Because of lack of investment fund, the expansion of transmission and distribution facilities couldn’t be made according to the plan, so the growth rate of facility has been decreased gradually. The electrification rate of Indonesia was only 7% in 1980′s, however, it has risen approximately to 53% in 2005. With the fact that the electrification rate in Java-Bali with high population density exceeds 96%, those in rest regions seem to be much lower than national average.