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Jakarta Post

PLN caught in dilemma as demand growth slows

  • Viriya P. Singgih and Fedina S. Sundaryani

    The Jakarta Post

PREMIUM
Jakarta   /   Mon, September 4, 2017   /  09:00 am
The Jakarta Post Image
On progress: Workers install an electrical power system for household consumers in Jajag village, Banyuwangi, East Java, on May 18. (JP/Aman rochman)

After predicting the demand for electricity would require 77.9 gigawatts (GW) of additional power capacity by 2026, state electricity firm PLN has found itself caught in a dilemma as the real demand has grown at a rate far below expectations, raising doubts about the government’s 35 GW target by 2019. PLN, in its latest electricity procurement business plan (RUPTL), factored in the construction of the new power plants based on the assumption the electricity sales volume would record a compounded annual growth rate of 8.3 percent. However, PLN’s electricity sales only climbed by 1.17 percent to 108.4 terawatt hours (TWh) in the first half of 2017, far below the growth rate of 7.85 percent recorded in the same period last year. Excess capacity would choke PLN with multi-billion dollar costs. “We’re trying to increase electricity consumption by offering di...