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tate-owned electricity firm PLN projects lower consumption by corporate users this year as worries over the spread of the COVID-19 coronavirus have caused a significant decline in trade and industrial activities.

PLN's executive vice president in charge of marketing and customer service, Edison Sipahutar, estimates electricity consumption will fall by between 0.6 percent and 1.2 percent in 2020 from 245.52 terawatt-hours, assuming factory, office and retail activities remain sluggish over the next nine months.

“Household electricity consumption will increase, but we also expect a decrease in business and industry consumption,” Edison told The Jakarta Post on Monday.

He said that, next month alone, household consumption was projected to rise by up to 2 percent, while industrial and business consumption would decrease by 2.4 percent and 1.8 percent, respectively.

In boosting industrial consumption, Edison said the electricity company would introduce discounts for off-peak hour usage and for customers who switch from privately owned power sources to PLN. He also said PLN “was considering” rolling out an electricity bill installment scheme for affected industrial customers.

Growing electricity consumption is critical for the financial continuity of Indonesia’s sole electricity distribution company. PLN is currently struggling to weather a power oversupply arising from Indonesia’s lower-than-expected economic growth, which was only made worse by the pandemic.

Bank Indonesia on March 19 revised the country’s economic growth target to a maximum 4.6 percent this year from 5.4 percent previously.

“The impact on demand in the Indonesian markets will be visible in the coming months depending on the direction the Indonesian government takes to manage the COVID-19 outbreak,” said Bikal Pokharel, research director at energy consultancy Wood Mackenzie, on Wednesday.

The lockdowns in China and Malaysia, he continued, resulted in declines in power demand by about 35 percent and 25 percent, respectively. In India, power demand slipped 33 percent on Sunday, when the South Asian country underwent a 14-hour quarantine.

However, the lockdowns also mean weaker demand for fossil fuels in Asia. Pokharel said “With demand disruption and low oil prices, fuel prices are likely to stay low and hence the overall cost of generation per unit will decline.”

Meanwhile, Energy and Mineral Resources Ministry Electrification Director General Rida Mulyana said the shift in electricity consumption from industry and offices to housing was expected because of the work from home policy.

“In every building, the highest electricity consumption is, first, AC [air conditioners] and, secondly, elevators,” he said. “Part of this should still be running but another part should shift to households.”

Edison added that Banten, West Java and East Java provinces were particularly at risk of experiencing sharp drops in power consumption. The PLN executive vice president also said the steel, cement and automotive industries were at a similar risk.

The three provinces are industrial areas with the highest COVID-19 infection rates outside of Jakarta. Banten and West Java, which straddle the capital city, recorded 67 and 73 confirmed cases as of Wednesday. East Java recorded 51 cases. Combined, the three regions represent a quarter of all coronavirus cases in Indonesia.

All three provinces have declared emergency situations, but their social restriction responses vary. West Java has closed public schools, tourist hot spots and Bogor-based offices. Banten and East Java have closed schools and allowed civil servants to work from home.

Meanwhile, the steel and cement industries already recorded a 5.4 percent and 4.3 percent decrease in electricity consumption in January, according to PLN.

“In the short term, electricity consumption in the commercial sector will likely decrease. This can happen to industries because of weakening demand in export markets,” said energy analyst Fabby Tumiwa.

Fabby, who is executive director of an energy think tank, the Institute for Essential Services Reform, projected electricity consumption to grow between 4.2 and 4.5 percent, assuming the economy grows at between 4.7 and 4.8 percent.

PLN’s electricity sales grew 4.6 percent last year when the economy grew 5.02 percent, according to Statistics Indonesia.