Indonesia Consumes more Electricity but Investments still Needed
State-owned electricity provider Perusahaan Listrik Negara (PLN) stated that consumption of electricity in Indonesia grew 7.2 percent to 90,48 terawatt hour (twh) in the first six months of 2013 compared to the same period last year. Head of PLN's Commercial Division, Benny Marbun, explained that Indonesia's industrial sector particularly consumed more electricity. Although industrial customers of PLN only grew by 4.5 percent in Semester 1-2013 (YoY), industrial electricity consumption grew 8.3 percent (YoY).
The growth in industrial consumption of electricity is an indicator that Indonesia's industrial sector continues to expand. Industries that are increasing their electricity consumption include the country's textile industry, metal processing, electronics, and ceramics. However, the highest growth rates, surpassing 10 percent growth in electricity use, stem from Indonesia's steel, cement, and chemical industries, which confirms that the building construction sector has been developing at a fast pace.
Although the amount of households that are customer of PLN grew 8 percent in Semester 1-2013 (YoY), household consumption of electricity only grew by 5.5 percent in the same period. Electricity consumption of poorer households, which utilize electric power of 900 VA (volt-ampere), grew 11.7 percent, while electricity consumption of the middle class household segment (3.500 VA - 5.500 VA) in Indonesia grew 11.3 percent in Semester 1-2013 (YoY).
An increasing number of Indonesian households that are connected to the country's power grid is important as the government of Indonesia wants to raise the nation's electrification rate. Currently, about 75 percent of the Indonesian population has direct access to electricity. The government wants to increase this rate to 90 percent by 2020. Therefore, the government tasked PLN to provide an additional 55,500 megawatts (MW) of power, nationwide, between 2012 and 2019. The government also wants to reduce dependency on expensive fuel (diesel) to fire power plants, instead focusing on coal or renewable sources to generate electricity. Private investors are very welcome to engage in such projects and to build facilities for electricity generation.
Electricity is required to be sold to PLN as this state-owned enterprise (SOE) holds a monopoly on electricity distribution in Indonesia.
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