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lectricity issues could mean the government is unable to realize its target of becoming the world’s 10th largest economy by 2030, a global energy think thank has warned.

In its recent publication, the Institute for Energy Economics and Financial Analysis (IEEFA) criticized the government for ignoring the basic requirement for realizing the dream, namely a modern, efficient and reliable electricity system.

Citing its research, the IEEFA said state electricity firm PLN, which is the one and only distributor, finds difficulties even in maintaining a stable electricity supply in areas with high density, such as in Jakarta; Bandung, West Java; or Surabaya, East Java.

IEEFA analyst Elrika Hamdi said that to realize its Industry 4.0 goal, the government needed to address the problems in the current electricity system, which are the energy monopoly and inefficiencies.

“The government should consider three solutions, namely establishing an independent institution or body to oversee the electricity system, creating a competitor for PLN, or turning PLN into a public company,” she said.

Based on the 2017 joint study by the World Resources Institute and India-based energy think tank Prayas, the IEEFA said power outages and electricity interruptions were still common in Indonesia.

“The low quality of electricity hinders the use of sophisticated electronic devices, which are an integral part of plan 4.0,” the IEEFA stated in its publication, referring to Indonesia’s Industry 4.0 target.

Elrika suspected that PLN was under the misapprehension that a growing economy would need a greater electricity supply.

In fact, she said, industry is becoming much more efficient and is beginning to depend on renewable-energy based electricity with much more stable prices.

“Hence, modernizing the transmission and distribution network is a nonnegotiable measure to meet a demand that is constantly changing,” she added.

Previously, the Energy and Mineral Resources Ministry Electricity Director General Andy Noorsaman Sommeng said diversification of electricity in the upstream sector for Industry 4.0 was crucial because demand for electricity would increase.

“All tools in industrialization depend on electricity [...] Therefore, technology and efficiency in generating electricity should improve as well,” he said, adding that the concept would become plausible with renewable energy playing a bigger role in the electricity system.

PLN, however, says the proportion of coal-fired power plants will continue to be larger than that of renewable energy power plants. By 2027, the use of coal is expected to stand at 58.5 percent, with renewable energy at only 20.4 percent.

The government is currently in the process of speeding up the use of solar photovoltaic (PV) to generate electricity, by issuing a ministerial regulation that is expected to regulate the sale of electricity to PLN.

However to date there has still been no update on the issue. PLN meanwhile has publicly said the use of solar PV will hurt the company’s revenue as electricity consumption will be reduced. “We can’t say that it can’t, because it’s good to increase the use of renewable energy, but certainly our [electricity] consumption will be lower,” PLN corporate planning director Syofvi Roekman said recently.

Responding to the statement, local energy think tank the Institute for Essential Services Reform (IESR) said rooftop solar PV units would only affect 0.42 percent of PLN’s revenue, from the installation of 1 gigawatts (GW) of rooftop solar PV by 2020.

“With projected revenue of Rp 348 trillion [US$23 billion], PLN’s potential revenue loss is only in the range of Rp 1.5 trillion with 1 GW of rooftop solar PV installed,” IESR executive director Fabby Tumiwa said on Wednesday.

Fabby said that by allowing leeway for rooftop solar PV, PLN could focus on optimizing the operation of its conventional power plants as well as easing its cost burden from high-maintenance fossil fuel-based power plants.

In the first half of this year, PLN cost of operations from fossil fuel-based power plants, including coal, stood at Rp 49 trillion, according to the IEEFA.