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Electricity in Indonesia – Issues and Recommendation

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Electricity in Indonesia – Issues and Recommendation

I. Current Condition and Issues
Electricity is a vital engine for growth, development and prosperity for the country. Above all, it helps improve the quality of life of the Indonesia people countrywide. However, until now, Indonesia still have 2 big challenges to provide sufficient and cost effective electricity to support its population quality of life and support Indonesia business and industries economic growth plan as elaborate below.
1. Insufficient electricity supply to support electricity demand and economic growth
The lack of adequate and reliable supplies of electric power is one of the most serious problems facing Indonesia today. As of year 2011, as shown in the following table, PLN have about 29,268 MW installed capacity in Indonesia. About 76% is in Java and the remaining 24% is outside Java.

Source : Statistic Report 2011 from www.pln.co.id
The current capacity provided by PLN is not enough to serve all the Indonesia population and Indonesia economy growth plan. Target electrification ration in Y2012 is is only 75%, so it is still more than 12 million households in Indonesia don’t have electricity. particularly outside Java.

Electricity shortage has also hit most parts of Indonesia, especially outside Java. For Industrial companies, the impact is lost of production hours. Household consumers were also harmed due to rolling blackouts. Government also feared that this Electrical problems would undermine the economic growth target of 7 percent per year.

In general electrification plan for 2005-2025, envisaged that the power deficit is a necessity. Growth in electricity consumption reaches about 7 percent per year, while the increase in power supply less than 4 percent. With this condition, it is definitely overwhelmed PLN electricity demand.

World Bank and its

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