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COVID-19 crisis severely disrupts 2020 electrification plans, investments
Recent data from the energy ministry show that the COVID-19 health crisis and related restrictive policies have severely impacted the country's 2020 electrification plans and investment realization.
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Technicians from state-owned electricity company PLN replace electricity meters on July 29, 2020 at Taman Palem Lestari, a housing complex in Cengkareng, West Jakarta. (JP/Donny Fernando)
W
ith the exception of power outage mitigation programs, most of Indonesia’s electrification programs fell below target in 2020 due to the COVID-19 outbreak, which has compelled the government to revise down several of its electrification goals for this year.
Jan. 13 data from the Energy and Mineral Resources (ESDM) Ministry showed that the government’s power system expansion plans realized just a little above half their 2020 targets at 55 percent each for power plants and electricity distribution and 59 percent each for substations and transmission.
“Everything [in 2020] hit the brakes, affected by COVID-19. This includes the electrification sector,” electrification director general Rida Mulyana said at a virtual press conference on Jan. 13.
Only the expansion plan for distribution substations recorded above average realization by meeting 81 percent of its target, said Rida, explaining that distribution substations were prioritized because they were the means of reaching end-users.
The COVID-19 health emergency pressured both electricity demand and the electric power supply chain. Consequently, electricity investments slumped 41.9 percent year-on-year (yoy) in 2020 to US$7.04 billion, or just 59 percent of the $11.95 billion investment target for the sector that year.
Indonesia’s recorded decline in power investment is steeper than the October projection of the International Energy Agency (IEA), which forecast a 6.34 percent annual decline in 2020 global power investments to $709 billion.
The limited investments and infrastructure expansion have set back Indonesia in its goal to electrify 100 percent of Indonesian homes by 2020 and mitigate the very costly power oversupply on the Java-Bali grid.
