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WorldBank
warns of looming power crisis (Source: Jakarta Post Jakarta Indonesia 23. January 2003 )
Indonesia is likely to experience a power crisis in 2004 unless new power investments are brought in, the World Bank has warned. The World Bank said in its latest economic assessment report on Indonesia that a power shortage was a clear and present danger for the country. The report, revealed to the media last week, is to be presented at the Consultative Group on Indonesia (CGI) donors meeting this week in Bali. The bank said a power crisis could be avoided if the financial condition of state electricity company PT PLN was improved, to allow new investments in the power sector. PLN s finances have deteriorated since 1997 when the regional economical crisis first hit the country, with accumulated losses amounting to IDR 45 trillion (US$ 5.05 billion), it said. The bank said the decision to increase electricity rates every quarter, introduced two years ago, was an appropriate move to help restore the financial soundness of PLN. PLN has raised electricity rates by an average of 6 percent every three month since 2001 so that by 2005 it could reach the commercial rate level of 7 U.S. cents per kilowatt-hour (kWh) in 2005. The current rate is around 5.24 cents per kWh after PLN raised its rates earlier this month. But many people objected to the recent hike, which coincided with an increase in fuel prices and telephone charges, forcing the government to review the move and indicating that the government might delay the hike. The World Bank also said PLN should carry out financial restructuring and efficiency measures as part of efforts to restore the ailing company. PLN needs around $ 28,5 billion in new investments up to 2010 to develop power generation, transmission and distribution facilities. The World Bank said that without the investments, PLN could not meet the fast rising demand for electricity, thus creating a power shortage. The bank estimated that the available power capacity in Indonesia has been and will be flat from 2001 to 2004 at the approximate level of 18,700 megawatts (MW) due to the absence of new electricity investments since 1997. But the supply figure will be outnumbered by rising demand, which is projected to jump sharply from 16,400 MW in 2001 to around 18,000 MW in 2004. The bank said that although existing power capacity in the Java-Bali network system, which accounts for over 75 percent of PLN s generating capacity, was still larger that the demand during peak hours, the actual amount of power distributed to customers was barely adequate. It happens due to the loss of electricity power for the transmission networks, regular maintenance and electricity power reserves which are needed to ensure the operation of the electricity system, it said. Elsewhere, the bank said that some 20 outer islands power systems were already showing signs of strains during peak hours, and posed a great challenge for PLN. PLN has been forced to restrict its power generating unit use, when the generating units are taken out for maintenance or suffer unscheduled outages, the bank said. |
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RI power rates in cents per kWh (kilowatthours) compared to levels in neighbouring countries Source: Asean Energy Center PLN |
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