T

he government urged state electricity company PLN to increase its performance by reducing electricity losses and reaching its goal in increasing the country’s electrification ratio.

Electricity loss is electricity wasted during its distribution. Besides costing significant amounts of money, the losses often are to blame for power outages in some areas in the country.

Deputy Energy and Mineral Resources Ministry Rudi Rubiandini said that the government expected PLN to trim electricity losses to 8.5 percent by 2013.

“It [the decrease] is needed for efficiency reasons. If PLN cannot do that, then its revenues will be automatically cut as well as its dividends,” he told reporters in Jakarta on Thursday.

“Last year, PLN’s electricity losses rate was 9.44 percent out of 156.29 terawatt hours [TWh] of electricity that the company sold. If the company could decrease the losses to 8.9 percent this year, I think they could reach the 8.5 percent target in 2013,” he added.

Separately, PLN planning and risk management director Murtaqi Syamsuddin said that the 9.4 percent in electricity losses last year was an indication that the company had performed quite well because it is responsible for a vast area.

“Reducing electricity losses to 8.5 percent means we need more investment,” he said. A 1 percent decrease in the rate of electricity loss required an investment of Rp 1.5 trillion, he went on. He said the company’s operational funds could not cover some maintenance work and PLN would need to strengthen its grid network capacity and add more transformers, which were not cheap.

“It will be hard to reduce electricity losses to 8.5 percent if we don’t have additional funds for capital
expenditures,” he said.

He added that until now, PLN had focused on spending its funds to boost the country’s electrification ratio instead of increasing its performance.

“Now we should [choose] between placing a priority on increasing our electrification ratio so that people in remote areas can enjoy electricity or boosting our performance by decreasing electricity losses,” he said.

“I think it’s best to find a balance between increasing our reach and performance. So, based on our calculations, a 9 percent electricity loss is the optimum percentage that we can reach, given current conditions,” Murtaqi said.

—JP/Rabby Pramudatama