General

History of Electricity in Indonesia

The existence of national electricity was not apart from the invention of electricity and technology supporters before the era of industrial revolution in Europe. Based on historical documents held by the National Electricity Company (PLN), the national electricity was introduced in colonial times. In the late 19th century during the Dutch occupation of the first power plant was established.

Power plant was owned by Dutch company that was a sugar factory and the tea factory that served to support production operations. While the utilization of electricity for public interest started by the Dutch private company that was N V. Nign, which originally specialized in gas and then expanding its business in the field of electricity supply for public benefit. In 1927 the Dutch government established s’Lands Waterkracht Bedriven (LWB), namely state power company that manages Plengan hydropower, Lamajan hydropower, Bengkok Dago hydropower, Ubrug hydropower and Kracak in West Java, Giringan hydropower in Madiun, Tes hydropower in Bengkulu, Tonsea Lama hydropower in North Sulawesi and Steam power plant in Jakarta. In addition, in some Township formed Municipal electric companies.

In the Japanese occupation period, all assets owned by the Dutch in Indonesia were taken over. Included were electricity companies and personnel in the company. In short the Japanese occupation period (3.5 years) and the scorched earth policy adopted at that time made the Japanese electricity industry was not developed during this era.

Mastery of the electricity industry by the Indonesian nation begins when entering the independence. Spearheaded by the youth, workers, and employees in the electricity and gas company by taking over the power company previously controlled by the Japanese. Labor groups and employees of this electrical company, and then form a delegation to face and report the results of their struggle in the Central of National Committee of Indonesia (KNI), headed by M. Kasman Singodimedjo, in September 2009. Furthermore, the delegation together with the leadership of the Central KNI meet President Soekarno, to deliver electricity companies and gas to the Government of the Republic of Indonesia. The delivery was received by President Sukarno, and then with Decree of the Government No. 1, 1945 dated October 27, 1945 Electricity and Gas Division was established under the Ministry of Public Works and Power. October 27, was later determined to be the day of Electricity and Gas.

Mastery of the electricity company by the Indonesian people is not necessarily accepted by the Dutch. Through Aggression Dutch I and II, controlled electric companies back by the Dutch Government as the original owner. Electrical Workers and employees who did not receive this back then flee mastery and incorporate themselves in the offices of Electricity and Gas Division in the Republic of Indonesia which was not occupied by the Dutch.

In 1952 the Government of Indonesia issued Presidential Decree Number 163, dated October 3, 1953 About the Nationalization of Foreign Nations-owned electricity company in Indonesia. Nationalization would be the Government of Indonesia to a foreign power company if the concession period runs out. Five years after the policy was implemented, the Government of Indonesia issued Law Number 86 Year 1958 dated December 27, 1958 About the Nationalization of all Dutch companies and Government Regulation Number 18 Year 1958 about Electric And Gas Company Nationalization of Dutch.

This started the era of mastery of national electricity sector by the government. To perform its function then the government established the Perusahaan Listrik Nasional (PLN) or National Electricity Company to meet the electricity needs of the community. In 2004, PLN was formerly a Perusahaan Umum (Perum) or public company changed its status to a Perseroan Terbatas (PT) Limited Company. A year after the turn of the PT. PLN to form subsidiaries, namely PT Pembangkitan Jawa-Bali (PJB I) and the Pembangkitan Jawa-Bali II (SPA II). On October 30, 2000 PT. PJB I changed its name into PT. Indonesia Power.

VISION AND MISSION OF ELECTRICITY SECTOR

Electric Power Sector Vision

Vision electricity sector is to electrify all households, villages and meet the needs of the fast growing industry in sufficient quantities, transparent, efficient, reliable, safe and familiar environment to support the growth of national economy and improving people’s welfare.

Mission Electric Power Sector

To meet the needs of electric power according to this vision, the Government took the following steps:

generate electricity on a large scale for urban communities, areas of high density level or large electrical systems;
giving priority to power generation from renewable energy for rural electrification and remote areas;
mmaintain electricity safety and preservation of environmental functions; and
making use the most of labor, goods and services produced locally.

NATIONAL ELECTRICITY SECTOR POLICY

Electricity Supply Policy

Management

Electric power as one of infrastructure-related lives of many people, therefore electricity development must adhere to the principle of benefit, efficiency, equitable, sustainable, economic optimization in the utilization of energy resources, relying on its own abilities, sound business principles, security and safety, preservation of environmental functions, and regional autonomy.

Electricity supply is controlled by the state of implementation is carried out by the Government and Local Government based on the principle of local autonomy. For the implementation of power supply, the Government and Local Government in accordance with the authority to set policy, regulation, supervision, and conduct electricity supply business. Implementation of the electricity supply business by the Government and Local Government conducted by state-owned enterprises and regional-owned enterprises. However, private enterprises, cooperatives and community group organizations can participate in the electricity supply business. For electricity supply, the Government and Local Government provides funding to less able community groups, the construction of electricity supply in underdeveloped areas, the construction of electric power in remote and border areas, and construction of rural electrification. The supply of electricity to the public interest include the type of business power generation, power transmission, power distribution and / or sale of electricity. In addition, the supply of electricity to the public interest can be integrated. The supply of electricity for public interest carried out by a single entity in one area of business. Restricted business areas also apply to the supply of electricity to the public interest that only covers the distribution of electricity and / or sale of electricity. The government has a policy in the electricity supply that the state-owned enterprises were given first priority to the supply of electricity to the public interest. As for the unserved areas of electricity, according to the Government or Local Government authority providing opportunities for local-owned enterprises, private enterprises, or cooperatives, as the organizer of an integrated electricity supply business. In the absence of regionally owned enterprises, private enterprises, or cooperatives that can provide electric power in the region, the Government shall assign state-owned enterprises to provide electricity.

Rate electricity tariff

Government Policy on the basic electricity tariff is that the electricity tariff in stages and planned directed to achieve the economic value so that the average electricity tariff to recover the costs. This policy is expected to give a positive signal to investors in investing in the electricity sector. Determination of appropriate tariff policy made economic value. However, electricity rates for consumers determined by considering the balance of national interests, local consumers, and electricity supply businesses. Especially for less able customers to also consider the customer’s ability to pay. Policy of subsidy for electricity tariffs are still enforced, but given the limited ability of the Government, the subsidy will be routed directly to the less able customer groups and / or to the development of rural and remote areas of development by considering or prioritize rural / regional and community that it deserves to get electricity in order to move the local economy. Electricity tariff policy that is not uniform (non-uniform tariff) may be enforced in the future, this is related to differences in the development of electricity development from one region to other regions.

Primary Energy Utilization Policies For Electric Power Generation

Policy for utilization of primary energy for power generation is intended for primary energy supply can be guaranteed. To maintain security of supply, the policy enacted Domestic Market Obligation (DMO), the utilization of local primary energy sources, and utilization of new and renewable energy. Primary energy supply security policies for power generation is done through two sides of the business side of the primary energy provider and on the side of the power generation business.

Policies on the business side of the primary energy provider, among others: business actors in the field of primary energy, especially coal and gas are given the widest opportunity to supply the needs of primary energy for power generation based on price with economic value. Other policies such as provision of incentives may also be implemented. Policies of local primary energy utilization for power generation can be made from fossil (lignite coal, gas, marginal) and non-fossil (hydro, geothermal, biomass, etc.). Utilization of local primary energy is to prioritize the utilization of renewable energy with due regard to technical aspects, economic, and environmental safety. While the policy on the business side of the power generation among others: energy diversification policy not to rely on one source of energy, especially fossil energy and energy conservation. To ensure the operation of generating the business actors in the generation needs to make stockfilling to reserves during the period, adjusted for delays in the supply constraints that may occur. In accordance with Presidential Decree No. 5 of 2006 on National Energy Policy (KEN) that the role of each type of energy to the national energy consumption for new energy and other renewable energies, to more than 5% by 2025.

Village Electricity Management Policy and Social Mission

Handling social mission intended to help groups of less able people, and electrify all parts of Indonesia that includes undeveloped areas, remote areas, and rural electrification development. Handling social mission intended to keep the continuity of assistance for less able people, maintain the continuity of efforts to extend access to electricity service in areas not reached by electricity, encourage the development / economic growth, and improving people’s welfare. Handling social mission needed to be implemented operationally through PKUK. In order to achieve the efficiency and transparency, then the electricity supply business should be done by separating social and commercial functions through a separate bookkeeping.

Environmental Protection Policy

Development undertaken in the electricity sector to support sustainable development and environmentally sound. For that damage and degradation of ecosystems in the development of energy should be reduced by limiting the negative impact of local, regional and global levels associated with the production of electricity. This has been stated in Law No. 30 of 2009 on Electricity that any electricity business activities must comply with the provisions required under the legislation in the environmental field. In line with the above policy, Law No. 23 of 1997 on Environmental Management and Government Regulation No. 27 of 1999 on Environmental Impact Assessment (EIA), as well as other laws, require that the proponent consider standard basic norms of how to harmonize their development activities with due regard to the environment and must meet quality standards issued by the competent authority. For that all electricity activities with a potentially large and important impacts are required to conduct EIA (ANDAL, RKL and RPL) while having no significant impact required to make the Environmental Management Efforts (UKL) and Environmental Monitoring (UPL) in accordance with the provisions of legislation .

Standardization Policy, Security And Safety, And Supervision

Electricity other than beneficial to people’s lives can also lead to danger to humans if not properly managed. Government in order to establish standardization electricity safety, security equipment installation and utilization of electricity. Electricity safety objectives include protecting the public from hazards caused by electricity, improving reliability of electricity systems, improving efficiency in the operation and utilization of electricity. The policy of standardization include:

Standard Equipment Power, which is a tool or a means of generating installations, distribution, and utilization of electricity.
Power Utilization Standards, which all product or tool that uses its use of electricity for the functioning of the product or tool, among others:

household equipment (household appliances) and commercial / industrial;
working tools (handheld tools);
lighting fixtures;
elektromedik equipment.

Based on the consideration of safety, security, health and environmental aspects, the IIndonesian National Standard (SNI) standard is divided into voluntary and utilization of equipment and must meet the mandatory standard. Installation of security policy include: feasibility of operation of electric power installations, safety equipment and utilization of electric power, and competence of technical personnel. Installation of electric power operation acceptance expressed with an operation-worthy certificate. For equipment and utilization of electricity that meets the Indonesian National Standards declared a Certificate of Product to be able to annotate SNI (SNI) on electric power equipment and the issuance of Certificates of Safety Signs (S) on the utilization of electric power and declared competent technician with a Certificate of Competency.

Policies for Electric Power Supply Crisis Power Woes

In an effort to cope with areas that are experiencing a crisis of power supply, carried out through two approaches, namely through Overcoming Program Short Term (1-2 years) and the Medium-Term Overcoming Program / Long (construction takes 3-5 years). Short-term overcoming programs carried out to settle the crisis quickly the electricity supply before the planned power plant is built, so the blackout that happened to be avoided as soon as possible. This program is done through the addition of generating capacity and distribution of power through transmission and distribution network. Addition of power generation is done through lease, purchase of excess capacity captive power plant and the procurement of new plants with rapid period of development. In addition, peak load reduction efforts by reducing electricity consumption during peak load. Overcoming programs medium / long term by building new power plants, either by PLN and IPP construction takes 3-5 years.

REVIEW OF NATIONAL POWER CONDITION

Current Electricity Infrastructure Condition

1. Power Plants

To meet the needs of national power, the supply of electricity in Indonesia is not merely done by PT PLN (Persero), but also made by other parties such as private, cooperatives, and regional-enterprises (BUMD). Electricity supply business that has been done by private, cooperative or BUMD are to build and operate their own power generating electrical power sold to PT PLN (Persero), better known by private generators or the Independent Power Producer (IPP) or build and operates its own generation, transmission and distribution of electricity in an integrated way that power electricity sold directly to consumers in a particular business area known as integrated plant or Private Power Utility (PPU). Until the end of 2008, total installed capacity of power generation nationally is composed of 30.527 MW, power plant owned by PT PLN (Persero) amounting to 25,451 MW (83%), amounting to 4.159 MW, IPP (14%) and PPU of 916 MW (3 %). Installed generating capacity is experiencing an addition of 5.480 MW since 2004, an increase of 22% over a period of 5 years.

GRAFIC 3.1

Development of National Installed Capacity of Power Plants

Source : Ministry of Mines and Energy

While the distribution of installed generating capacity for the main islands are as shown in Table 3.1.

Table 3.1

Installed Capacity of Power Plant

No	Island	Installed Capacity (MW)
1	Sumatera	4.941
2	Java – Madura – Bali	22.599
3	Kalimantan	1.178
4	Sulawesi	1.195
5	Nusa Tenggara	265
6	Maluku	182
7	Papua	168
	Indonesia	30.527

Source : Ministry of Mines and Energy

2. Power Grid

Electrical systems that exist in the Indonesian archipelago has not been fully integrated into the electricity transmission network. Currently the electrical system that has been integrated well only in Java-Madura-Bali, where the electrical system of Java-Madura-Bali has 2 interconnection systems, namely Extra High Voltage transmission lines (SUTET) 500 kV as the main backbone tissues and the High Voltage transmission line (SUTT) 150 kV as a support network. On the island of Sumatra, Northern Sumatra electrical system (Sumbagut) that links the Province of Nanggroe Aceh Darussalam (NAD) and North Sumatra have been interconnected to SUTET 275 KV, but the power transmission network is not fully connected to the electrical system of Sumatra. System that connects the system of West Sumatra and Riau (Sumatra-Riau) has been well integrated. In November 2004, the electricity system in South Sumatra province has integrated South Sumatra province, province of Jambi, Bengkulu and Lampung, became Southern Sumatra System (Sumbagsel), and subsequently in August 2006, Sumbagut-Sumbagsel electrical system has been integrated with SUTT 150 kV . On the island of Kalimantan, a small electrical system with the Central Kalimantan province of South Kalimantan are already connected via SUTT 150 KV. While on the island of Sulawesi, the electrical of Sulawesi system which includes the province, South Sulawesi, Central Sulawesi, Southeast Sulawesi, North Sulawesi and Gorontalo still many scattered supplied with the system, but some areas have been connected with SUTT 150 KV. The electrical system Nusa Tenggara, Maluku and Papua have not had SUTET and SUTT because in general electrical system was still isolated and scattered, and class power generating capacity owned still relatively small. Until the end of 2008, the total length of power transmission network has been built by PT PLN (Persero) is a long 34.1184 kms consisting of 500 kV SUTET along 5092 kms, 275 kV SUTT along the 782 kms, SUTT 150 kV over 23,679 kms, SUTT 70 kV over 4619 kms, and SUTT 25-30 kV along 12 Kms. Total length of electric power transmission networks are experiencing an addition of 3390 kms since 2004 or an increase of 11% over a period of 5 years.

While the results achieved in the construction of power transmission to the main islands are as shown in Table 3.2.

Table 3.2

Length of Electric Power Transmission

No	Islands	SUTET (kms)	SUTT (kms)	TOTAL (kms)
1	Sumatera	782	8.906	9.688
2	Java – Madura – Bali	5.092	15.501	20.593
3	Kalimantan	–	1.429	1.429
4	Sulawesi	–	2.474	2.474
5	Nusa Tenggara	–	–	–
6	Maluku	–	–	–
7	Papua	–	–	–
	Indonesia	5.874	28.310	34.184

Source : Ministry of Mines and Energy

GRAFIC 3.2

Development of the Transmission and Distribution lines

Source : Ministry of Mines and Energy

While the results achieved in the development of power distribution to the main islands are as shown in Table 3.3.

Table 3.3

The Length of Electric Power Distribution

No	Islands	Medium Voltage (kms) JTM	Low Voltage (kms) JTR	TOTAL (kms)
1	Sumatera	72.131	77.431	149.562
2	Java – Madura – Bali	128.364	217.912	346.276
3	Kalimantan	23.695	21.441	45.136
4	Sulawesi	23.017	23.795	46.812
5	Nusa Tenggara	7.473	7.315	14.788
6	Maluku	4.484	2.337	6.821
7	Papua	1.999	3.531	5.530
	Indonesia	261.163	353.762	614.925

Source : Ministry of Mines and Energy

Drawing 3.1 Development of National Electricity Supply for 2008

Source : Ministry of Mines and Energy

3. Electrification Ratio

Electrification ratio is defined as the number of households that are electrified divided by the number of existing households. The development of a national electrification ratio from year to year has increased, from 61.04% in 2004 to 65.10% in 2008 (of total households in Indonesia amounted to 55,376,392 households as much as 36,078,726 households already enjoy access of electricity).

While electrification ratio for the main islands are as shown in Table 3.4.

Table 3.4.

Electrification Ratio

No	Islands	%
1	Sumatera	60,6
2	Java – Madura – Bali	72,0
3	Kalimantan	57,6
4	Sulawesi	55,3
5	Nusa Tenggara	28,6
6	Maluku	52,4
7	Papua	32,3
	Indonesia	65,1

Source : Ministry of Mines and Energy

4. Condition of Demand and Supply of Electricity

Demand for power from year to year continues to increase with growth averaging about 7% per year. Meanwhile, development of infrastructure, especially electricity generation capacity additions during the last five years (2004-2008) only grew by an average of 4.4% per year. The imbalance between demand and supply of electricity has impacted the electricity supply shortages in some areas, especially outside of the electrical system Java-Madura-Bali can not be avoided. Growth conditions of low power supply is also a result of the economic crisis that hit Indonesia in the period 1998/1999, at which time the growth of installed capacity only grew by 1.13%. Indonesia’s current economic growth requires the support of reliable supply of energy including electricity. Electricity demand will increase in line with economic development and population growth. Growing economy in the region resulted in electricity consumption will increase as well. This condition should be anticipated as early as possible so that the supply of electricity could be available in sufficient quantities and at reasonable prices. By considering the assumption of national economic growth on average grew by 6.1% per year and growing population nationally grew by 1.3% per year, the national electricity demand forecasts according to the National Electricity General Plan 2008-2027 is expected to reach an average of 9 , 2% per year. The high estimate of growth in average national electricity demand of 9.2% is also concerned with the number of potential customers waiting list of PT PLN (Persero) that the amount of capacity has reached more or less about 6,000 MW due to the implementation of restrictions on sales of electricity (suppressed demand) on previous years.

Electricity Infrastructure Development Priorities Ahead

1. Power Plants

Development of electricity supply capacity is directed at a realistic growth and preferred to solve the electricity supply crisis that occurred in some areas, increase reserves and meeting the reserve margin (System for Java-Madura-Bali 30% and Systems of Outer Java-Madura, Bali, 40%) with prioritizes the utilization of local energy sources or new and renewable energy and power development plan of eliminating fuel oil. Development of fuel generator, exempt for overcoming short term local electricity supply crisis (one to two years to come) while awaiting the completion of construction of non-fuel that has been planned, by doing a lease generators that use MFO fuel. If the non-fuel plant that has been planned has been in operation, the oil fuel plant is in then non-operated. Considering the high growth of electricity, providing electricity access to the whole community and encourage the use of renewable energy, the development acceleration program of 10,000 MW phase II of the composition of its various primary energy range (not just coal) offered to be developed by PT PLN (Persero) and private with provide the facilities that have been implemented in the program accelerated the construction of 10,000 MW phase I. Development of small-scale coal power plant can be considered as an alternative to replace power plants that use fuel oil on a small scale system to reduce the cost of electricity system operation. In addition, the development of small-scale coal power plant can also be used to replace existing diesel partial role in the electrical system in Outer Java-Madura-Bali that its dominance is still quite high. As a developer of small-scale coal power plant is PT PLN (Persero), or private. Considering the difficulty of obtaining land to build large-scale power plants in Java and to consider increasing the peak load from year to year, the development of coal power plant with a capacity of 1,000 MW Supercritical boiler technology to gain efficiency and better emission levels, can be developed by PT PLN (Persero) and private.

2 Power Grid

The basic principle of electric power transmission system development aimed at the growth of the system, increasing system reliability and reduce constraints on the distribution system and the construction of new plants. Given that the Government is currently carrying out development acceleration program of 10,000 MW of Phase I and implement future plans development acceleration program of 10,000 MW stage II, the development of electric power transmission system is prioritized ahead of construction to deliver electricity from new power plants. At present, large systems that are integrated with both the system of Java-Madura-Bali and Sumatra System. While the electrical systems on the other islands like Sulawesi are better systems in northern and southern regions. The electrical systems on other islands such as Kalimantan, Nusa Tenggara, Maluku and Papua have to get more attention in the development of its distribution system, especially in efforts to increase reliability. In the medium term, it is expected that the System of Sumatra has been fully integrated using the network of extra high voltage 275 kV, which is currently the system has been interconnected in a network of high voltage 150 kV. With the entry of several power generating large-scale, in the long-term within the system in Kalimantan and Sulawesi are expected also been connected properly. Development of delivery systems directed at the development of the system voltage 500 kV and 150 kV for the System for Java-Madura-Bali and 275 kV, 150 kV and 70 kV for the system outer Java-Madura-Bali. Efforts to develop distribution iinterconnected between Java-Madura-Bali System to Sumatra System can be done after the study in depth by taking into account several aspects, including technical, economical and social. While development plans 500 kV cross-link from Java to Bali Island is one option that can be done in anticipation of load growth in Bali. In developing the substation, the voltage of the selected system is directed at the suitability of transmission system development. Addition of transformer prioritized when loading the transformer installed in the substation had reached 70% of its capacity. While the construction of a new substation can be considered to be done if the supply in a region are not able to be met from the existing substation surrounding the transformer loading is indicated by the substation has exceeded 70% and capacity already has the optimum capacity.

3. Electric Power Distribution

Development of electric power distribution facilities can be directed to anticipate the growth of electric power, to maintain the desired level of reliability and efficiency and improve service quality. When considering the fulfillment of an integrated electric power with other electrical systems in value is less / not efficient, then the isolated network can be applied. The isolated network is isolated electric power distribution network that stands alone and does not connect directly with Medium Transmission Line with limited service areas.

Indonesia Electricity Condition as per October 2012

last updated April 2013