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Executive Column: Electricity demand not as high as we thought: Jonan

Ignasius Jonan (JP/Seto Wardhana)Following a more-than-six-hour blackout that impaired Jakarta, West Java and some parts of Central Java earlier this month, local media outlets and social media sites were flooded with questions, criticism and ridicule over electricity supply in Indonesia

Norman Harsono (The Jakarta Post)
Jakarta
Mon, August 26, 2019

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Executive Column: Electricity demand not as high as we thought: Jonan

Ignasius Jonan (JP/Seto Wardhana)

Following a more-than-six-hour blackout that impaired Jakarta, West Java and some parts of Central Java earlier this month, local media outlets and social media sites were flooded with questions, criticism and ridicule over electricity supply in Indonesia.

State-owned utility company PLN summarized the problem as “disruptions” having tripped one of two electricity circuits that channeled power from eastern Java to western Java at an unfortunate time when the other circuit was under maintenance.

PLN, which has monopolized domestic electricity transmission since 1965, has been on the receiving end of most of the public anger, especially after Energy and Mineral Resources Minister Ignasius Jonan responded to an unhappy netizen with “Just sue PLN”.

The Jakarta Post’s Nezar Patria sat down with Jonan at his office in Jakarta last Tuesday to talk about the government’s view of Indonesia’s electricity supply, which appears to be in a state of surplus. Below are excerpts from the interview, which have been edited for brevity and clarity.

Question: Let’s start with the blackout. How do you view the problem?

Answer: PLN was not careful enough in electricity transmission management. I don’t know why the circuit tripped — maybe the demand was too high or there were some other technical issues — but if one circuit was under maintenance and the other one was being used, there should have been preparatory measures.

So then we ask, doesn’t a city as important as Jakarta have its own power plant? It does. We have gas-fired power plants in Tanjung Priok and Muara Karang but apparently these plants were inactive.

Why were they inactive? Because PLN wants efficiency. If these plants are inactive, PLN could save gas costs. But once the northern circuit was disrupted [...] the blackout happened. These plants should have been on standby while the southern circuit was under maintenance.

What is the state of Indonesia’s electricity supply today?

PLN and the energy ministry, we hope the economy can record 5 percent growth at least. If this falls short, there will be too much electricity production given all the power plant projects will be completed by 2024.

In 2014, our on-stream plants had the capacity of 55,000 megawatts. In 2019, we’ll have around 70,000 MW. In 2024, we’ll have at least 90,000 MW.

This is what we’re concerned about because, back then, we planned an additional 35,000 MW, predicting economic growth would be at 7-8 percent. Electricity demand was expected to grow 10-12 percent each year.

If the actual economic growth is only 5 percent, then actual electricity usage growth is only 7-8 percent. This is a big gap. Who will absorb all that electricity? That’s a concern.

So there will be a point when we have too much electricity supply?

It’s already too much right now. Demand is not as high as we thought. That’s why we’re pushing PLN to campaign for the use of electric cookers, electric motorcycles and electric cars.

Why is the energy ministry a diehard advocate of electric vehicles? For three reasons, first is to reduce pollution, second is to reduce oil imports, third is to sell electricity. If we don’t do those, what will PLN do with all this power?

And in electricity, the challenge is not only the generation but also the transmission and the distribution. That’s why we’ve built in Sumatra a similar electricity transmission and distribution system to Java-Bali. It’s done. We just need the President to launch it. We can basically build power plants anywhere now because the cables are there.

Oil and gas imports are putting pressure on our current account deficit. What’s the alternative?

We are actually importing only oil. Gas is still exported. We still produce gas at around 1 million to 1.2 million barrels of oil equivalent. It’s not a problem. PLN’s gas stock is still secure for a long time.

The imports are of oil. We need 1.3 million barrels of oil per day and produce 775,000 to 800,000 barrels per day. So we import over 500,000 barrels of oil and we can’t do anything about that but gas is not a problem.

Yes, gas-fired power plants have higher operational costs than coal-fired power plants but no way Java can use more coal – how bad would the pollution be? That’s why, since 2017, I haven’t allowed any new coal-fired power plants in Java. No more. Closed.

Indonesia’s newly discovered natural gas reserves in the Masela Block in Maluku, how long can these last for electricity production?

It’s a very good question [...] more than 20 years. Masela’s gas reserves are 18 trillion cubic feet. Production is around 9.5 million metric standard cubic feet per day (mmscfd) in LNG [liquefied petroleum gas] each year and 1.5 mmscfd of piped gas that is channeled onshore.

If we look at these two and ask how long can it last if it all is converted into electricity [...] maybe, if we use 100,000 MW each year, it could last 28 years.

What if the gas runs out, how to ensure the continuity of electricity?

If, let’s say, we keep using coal in Indonesia. There is theoretically enough for 200-300 years. Gas, there is maybe enough for 100 years.

So our energy security is not actually a major concern? Unless we continue importing fuel because fuel usage keeps rising and that has to be switched to gas, electricity, biofuels?

Yes. And renewables.

How much do renewables contribute to power production today and what is the target?

Some 13 percent of electricity is generated from renewables. This is low. I hope to get 20 percent by 2025. The target is 25 percent by 2025 [as per the General Planning for National Energy regulation], 30 percent by 2030 and 50 percent by 2050.

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