Massive Electricity Blackouts in Java; A look at Indonesia’s Electrification Ratio & PLN's Performance
On Sunday 4 August 2019 and Monday 5 August 2019 the capital city of Jakarta, a large part of West Java, and parts of Central Java were without electricity. On Sunday the power outage lasted from around noon to 21:00 pm, an unusually long period, while the following day the outage lasted for approximately six hours (depending on the exact location); also an unusually long period albeit not as long as on the preceding day.
Those who live in (or have lived in) – or have travelled across – Indonesia should know from first-hand experience that power outages occur. They occur particularly frequently outside the islands of Java and Bali as electric power infrastructure is best, by Indonesian standards, on these two islands. Usually, however, a blackout lasts for a few minutes only; rarely does it last for multiple hours as we experienced in Jakarta in early August 2019.
Many (including the writer of this article) immediately suspected that the 7.4-magnitude earthquake that had rocked West Java two days before the power outage had something to do with the massive blackout. However, electricity company Perusahaan Listrik Negara (PLN), a fully state-owned company that holds a monopoly on the distribution of power in Indonesia, informed the public that the power outage was caused by a technical failure at its transmission circuits on the Ungaran-Pemalang power line in Central Java, which subsequently led to voltage drops in the power networks in Jakarta, other parts the western part of Java, and some parts in Central Java.
Besides the lengthy power outage in early August, the many shorter power outages across Indonesia (that happen almost on a daily basis) are clear signs that power generation is insufficient in many parts of this vast Archipelago as there exists an imbalance between the demand for power and the supply of power.
The article discusses the following:
- What caused the massive power outages in early August 2019 and how did they affect the people and companies?
- How does central government intervention (in the price of electricity) affect the corporate performance of state-owned electricity company PLN?
- The inequality in electricity supply between Java & Bali versus the other islands (and how local communities adjust to this situation)
Read the full article in the August 2019 edition of our monthly research report. You can purchase the report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
