2008-2009 DATA CONSULT. All rights reserved.
MARKET INTELLIGENCE REPORT ON

POWER GENERATING INDUSTRY IN INDONESIA
July 2008

Current Issues

Indonesia is facing crisis in electric power supply. Almost the entire areas including Java-Bali, the country's business center, are suffering the inconvenience. Java and Bali account for 77% of power consumption in the country.

With economic growth of around 5% - 6% power requirement grows 7% - 8% a year as against production growth of only 3% per year. New power generating plants have not contributed significantly to supplying capacity since 2006. As a result shortage in supply which will potentially cause a drag on economic development.

Power requirement has been fast in the country with the growing industrialization, but the surge lately in the requirement came with many manufacturing companies formerly using oil fuels (BBM) chose to use PLN electricity to generate energy after the surge in BBM prices.

The shortage in supply is also attributable to many power plants being too old and inefficient. In addition the process of production in a number of large power plants has been interrupted. In 2007, power supply from PLTU of Tanjung Jati B declined as a result of delay in supply of coal to that power plant. The delay   was caused by bad weather forcing postponement of coal shipments from outside Java.

Interruption in the  process of production was also faced by the PLTU of Suralaya because of trouble in the  transformers of its Unit V. Troubles were also faced by  PLTGU of Cilegon over shortage in gas supply, PLTU of Gresik  also over gas supply deficit.  Decline in power output was also recorded by IPP (Independent Power Producers) on technical trouble faced by PLTU of Cilacap, PLTGU of Cikarang, PLTP of Drajat III, PLTP of Dieng and PLTA of Jatiluhur.    

The past several years, have seen uncertainty in domestic gas supply resulting in delay in the construction of gas fired power plant projects. A number of oil fired power plants, which were already converted into gas fired power plants were forced to use oil fuel again.

In a bid to cope with deficit in power supply in the country, the government has launched its first crash program building coal-fired power plants with a total capacity of 10,000 MW. The program is expected to be fully completed in 2010.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said Indonesia will need still need 35,000 MW more power until 2015 the Minister, therefore, encourages development of renewable energy and asks IPP to accelerate development of their projects.

The government has tried to cope with shortage in power supply by issuing regulation on operating hours of television broadcasting stations, calling on government offices to economize on electricity. The government through PPLN even forced manufacturing companies to change part of their operating hours from normal working days to Saturday and Sunday when PLN normally has idle capacity.


Management of electric power system in Indonesia 

In line with the Law no 15/1985, PLN is responsible for electricity procurement in the country, therefore, controls power production and distribution systems. PLN has established interconnections systems in some parts of the country Java - Bali system, southern Sumatra interconnection system (covering part of Riau, West Sumatra, Jambi and South Sumatra), Northern Sumatra interconnection (covering North Sumatra and Aceh). Other islands or parts of the country have not been fully covered by interconnection systems.

Java-Bali Interconnections
The Java-Bali interconnection is the largest system in the country connecting various power generating plants and load centers in Java, Madura and Bali. The system has a total capacity of 22,236 MW with transmission system of extra high voltage cable of 500 KV, high voltage cable of 150 KV and low voltage cable of 70 KV.

Transmission system of extra high cable of 500 KV has connected all power plants in Java. The transmission cables extend along the northern coastal areas of Java supported by ones in its southern areas. The interconnection system is managed by PLN Penyaluran dan Pusat Pengatur Beban (PLNP3B) of Java-Bali.

The power plants in Java are all under control of PLN's subsidiaries PT Indonesia Power and PT Pembangkit Jawa Bali (PT PJB).

PT. Indonesia Power controls 8 Units of Generating Business - Suryalaya (3,400 MW), Tanjung Priok (1,343.56 MW), Semarang (1,469.26 MW), Tanjung Perak (561.83 MW), Bali (324.82 MW), Kamojang (360 MW), Mrica (819 MW), and Saguling (797.36 MW).

The Suralaya business unit has 7 units of coal fired power plants (PLTU). The first four units each has a capacity of 400 MW and Units 5, 6 and 7 each has a capacity of 600 MW or a total of 3,400 MW.

PT Pembangkitan Tenaga Listrik Jawa-Bali II or now known as PT. PJB was established in 1995. PJB has 8 power plants with installed capacity of 6,526 MW with assets valued at Rp41.5 trillion. PJB with 2,203 workers has become a world class power producer. Six of its power plants - Gresik (2259 MW), Muara Karang (1208 MW), Paiton (800 MW), Muara Tawar (920 MW), PLTA of Cirata (1008 MW), PLTA of Brantas (281 MW) meet international standards in capacity, quality, effectiveness and service.

Sumatra electric power system already integrated

With the completion of the 102 kilometer 150 KV transmission system between Rantau Prapat-Kota Pinang-Bagan Batu in July 2007, the interconnections system in the northern part of Sumatra has been connected with the system in the southern-central part of that island.

The system in the southern-central part will supply 70MW of its excess in power supply to the northern part of that island. The southern-central system has an excess in capacity of 100 MW.
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The two interconnections systems are connected with a 150 KV transmission cable from Bandar Lampung to Banda Aceh spanning a distance of 3,000 km. Power distribution in Sumatra, therefore, has improved. The integration, however, has not fully done away with the power deficit in the northern part of Sumatra. Most of power plants in that region are relatively small in capacity while power requirement is growing fast.

Electric Systems in Other Islands

In Kalimantan interconnections have been built between Central Kalimantan and South Kalimantan. Work is still underway to establish interconnections between South Kalimantan and East Kalimantan. In long term plan is interconnections will be built between West Kalimantan and Central Kalimantan. The system will allow shortage in one region to be covered with supply from other regions.

West Kalimantan is left behind in the development of electricity sector.  Pontianak is building transmission in a loop system as a kind of interconnection in that city.

PLN in East Kalimantan has a number of major power systems. The largest is the Mahakam system supplying power to Samarinda, Balikpapan, and Tenggarong, the capital of Kutai Kartanegara. The Bontang-Sangatta system supplies power to northern part of East Kalimantan. The Melak and Kota Bangun system supply power for Kutai Barat and Kutai Kartanegara, and the Petung and Tanah Grogot systems for subscribers in southern part of East Kalimantan.

The Mahakam system has 330,000 subscribers using 171.5 MW of power. The PLTGU of Tanjung Batu is one of six power plants in the Mahakam system. Other five plants are diesel fired power plants.

Condition of Power Generating Systems

PLN had a generating capacity of 22,236 MW in Java-Bali in 2007 up from 19,514 MW in 2005.  Early 2008, the capacity rose to 22.296 MW with addition of 200 MW from the PLTU of Tarahan in Lampung, PLTP of Darajat and PLTP of Kamojang.  

Outside Java-Bali, PLN's generating capacity rose from 5,573 MW in 2005 to 8,284.28 MW in 2007. Among the new plants coming on stream in 2007 were PLTU of Perusda 50 MW and PLTG of Menamas 20 MW in the Kalimantan systems.

Number of subscribers 

The number of PLN's subscribers grew slower as a result of the 1998 crisis.  Before the crisis the number grew by more than 10% annually, but after that year the annual growth fell to 3%-4%.
The number of subscribers rose from 32.2 million in 2003 to 37.7 million in 2007 or an annual growth of 4%.

Table
Number of PLN's subscribers by groups,
2003 - 2007

Year        Households        Industry        Business        Social        Off. buildings        Strt. Lighting        Total        %                                                                                                           
2003        29,997,554        46,818        1,310,686        659,034        83,810                53,514        32,151,416        ---
2004        31,095,970        46,520        1,382,416        686,851        87,187                67,502        33,366,446        3.78
2005        32,174,922        56,475        1,455,797        716,194        89,533                76,432        34,559,353        3.58
2006        33,441,512        58,717        1,513,592        744,626        93,087                79,466        35,931,000        3.97
2007        35,069,525        61,570        1,587,152        780,814        97,611                83,328        37,680,000        4.86
Source: Statistics of  PLN, 2005

Electrification ratio
Household electrification ratio in the country is relatively low - around 60%. The ratio, however, has continued to increased from 56.4% in 2003 to 61.6% in 2007.  In Java the ratio was 68.9% and in other regions it was 56.5%.


Coal main fuel 

The soaring prices of crude oil force PLN to seek using substitute fuel such as coal, geothermal, gas, etc.

Use of coal by PLN rose in the past five years from 15.2 million tons in 2003 to 31.4 million tons in 2007. However, dependence on oil fuel (BBM) could not yet fully be done away.   In 2003, BBM consumption totaled 7.6 million kilo liters, up to 90 million kilo liters in 2006, but down to 5.1 million kilo liters in 2007. The decline in 2007 was thanks to growing use of coal especially by PLN. ..........


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