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Govt tightens grip on PLN to achieve goal
State electricity firm PLN is under pressure to fulfill the government’s demand to reach an electrification ratio of nearly 100 percent for Indonesia by 2019, despite its weak financial performance and even though electricity rates will remain unchanged until the end of next year
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tate electricity firm PLN is under pressure to fulfill the government’s demand to reach an electrification ratio of nearly 100 percent for Indonesia by 2019, despite its weak financial performance and even though electricity rates will remain unchanged until the end of next year.
In the first half of this year, PLN booked a total loss of Rp 5.3 trillion (US$356.3 million), compared to Rp 2.03 trillion in profit in the same period in 2017, as a result of the weakening rupiah.
However, Energy and Mineral Resources Minister Ignasius Jonan appeared confident in front of hundreds of global electricity players on Tuesday when he instructed PLN to pay more attention to customers’ needs.
“I was told that PLN is scared of having fewer consumers. Therefore, I said that PLN should transform itself into a customer-oriented firm and be more driven to sell its product,” he said in an event commemorating the 73rd National Electricity Day in Serpong, South Tangerang, Banten.
PLN has been instructed to start constructing power plants with a capacity of at least 10 gigawatts (GW) from 2019 to 2020, after completing its 8.5-GW plants started four years ago. A majority of these were part of power plant projects FTP-1 and FTP-2 initiated under then-president Susilo Bambang Yudhoyono.
“PLN should instead focus on how it can generate much more electricity for customers with the increasing power capacity,” he said, adding that the firm must also help the government reach the targeted electrification ratio of 99.99 percent by 2019.
Speaking in a video message screened during Tuesday’s event, Vice President Jusuf Kalla said he believed that the annual growth of electricity consumption was at 10 percent, while the country’s population growth stood at around 1 percent per year.
Kalla added that in terms of electricity consumption per capita, Indonesia still lagged behind its neighboring countries, such as Singapore, Malaysia and Thailand, though he did not disclose exact figures.
“Hence, PLN should never stop building electricity infrastructure,” Kalla said.
Jonan pointed out that the government had helped PLN find new customers earlier this year through a project in which the company provided free electricity installation for around 100,000 low-income people.
“And for next year, we have proposed in the 2019 state budget draft to expand the number to 2.4 million customers,” he said, adding that the House of Representatives had approved the plan.
Jonan urged PLN to take on two feasible projects that would increase electricity consumption, which includes the conversion of gas-based stoves to electricity-powered ones.
And if that is not enough, he added, PLN should start using green diesel — which is made from crude palm oil (CPO) — at all of its 2,000-megawatt (MW) diesel-fueled power plants.
However, PLN strategic procurement director Supangkat Iwan Santoso, who is also chairman of the Indonesian Electricity Society (MKI), said the green diesel project was long-term, and the firm must first allocate new investments.
Separately, Djoko Rahardjo Abumanan, PLN regional business director for the eastern parts of Java, Bali and Nusa Tenggara, said the company’s diesel power plants had the capacity to absorb up to 30 percent blended biofuel (B30).
“It is more feasible if the blending is [30 percent biofuel], not 100 percent. But, if the government wants [100 percent], then please give us the funding,” he told The Jakarta Post.
