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PLN eyes 10% power sales growth in challenging year
State-owned electricity firm PT PLN is seeing robust growth in its electricity sales this year, although consumption may be affected by the gloomy global and domestic economies
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State-owned electricity firm PT PLN is seeing robust growth in its electricity sales this year, although consumption may be affected by the gloomy global and domestic economies.
The company is targeting to book 218.8 terawatt hours (TWh) in electricity sales this year, a 10 percent increase compared to the total consumption of 198.6 TWh last year.
That compares to the 5.9 percent increase in electricity sales last year ' lower than the 9 percent target ' as Indonesia's latest economic growth data in the third quarter shows a 5 percent expansion, the slowest in five years.
'Last year's slowing growth was partly caused by global weakening growth that affected [Indonesia's economy],' PLN director Murtaqi Syamsuddin said. Electricity consumption growth is usually about 1.5 percentage points higher than economic growth.
PLN also imposed higher tariffs on industries last year, prompting companies to adjust their consumption.
This year, however, the government is upbeat that the economy will grow at a level of 5.8 percent, as stated in the 2015 state budget, despite international agencies such as the World Bank and International Monetary Fund as well as other economists predicting more modestly at the lower end of the 5 percent level, as countries elsewhere in the world from Europe to China struggle to boost growth.
Most of the growth in electricity demand will be supported by consumption in Java, according to PLN director Nasri Sebayang.
'Growth in Java will be at around 7 to 8 percent. There are other areas outside Java with more than 10 percent in growth. However, as around 70 percent of electricity is in Java, it will drive national growth,' Nasri said.
Java's electricity system is expected to receive new capacity from three power plants this year, according to Nasri.
The power plants to be completed are a 600 megawatt (MW) Cilacap power plant expansion project, a 600 MW Adipala project and 300 MW from the Tanjung Awar-awar unit 2 power plant.
The proposed revision of the state budget has set a lower target for PLN, which had around 57 million customers at the end of 2014, expecting electricity sales to grow by 9 percent this year to 216.39 TWh.
Indonesia's total installed electricity capacity is 53,352 MW, 42,000 MW of which is produced by power plants owned by PLN, government data shows.
Under the proposed revision to the state budget, the county's total electricity installed capacity is targeted to be at 57,145 MW by the end of this year.
Indonesia is on the brink of an electricity crisis as rising demand is not being followed by the rapid developments of power plants projects, which remain sluggish.
The country's electrification ratio was at 84.1 percent at the end of last year, but in some areas the ratio is far lower, such as 43 percent in Papua.
To tackle this and boost national capacity, the government has kicked off an ambitious 35,000 MW electricity procurement program that is expected to be completed within five years.
