Electricity Sales Indonesia Rise 7.2% in January-September 2016
Perusahaan Listrik Negara (PLN), Indonesia's state-owned electricity company, stated that a total of 158.64 terawatt hours (TWh) of electricity was sold in Indonesia in the fist nine months of 2016, up 7.2 percent year-on-year (y/y) from 148.0 TWh of electricity sales in the same period of 2015. Benny Marbun, Head of PLN's Commercial Division, said rising electricity sales (as well as consumption) are the result of Indonesia's improving economy. In 2016 the nation's gross domestic product (GDP) is expected to expand 5.0 percent (y/y), from 4.8 percent (y/y) in 2015.
Marbun added that growth of the industry sector is particularly important for rising electricity sales. Up to September 2016 Indonesia's industry sector expanded by 6.2 percent (y/y), up from the 5.93 percent (y/y) growth rate in July 2016. Although the number of clients is limited in the industry sector, this segment accounts for 49.8 TWh or approximately 31 percent of total electricity sales in Indonesia.
One of the factors that contributed to rising electricity sales in Indonesia's industry sector is Perusahaan Listrik Negara's decision to offer incentives to industries. Currently, PLN offers a 30 percent discount to businesses that consume electricity at night, a policy that aims at preventing excessive consumption during day time (which causes blackouts). However, this policy is still considered to be rather inefficient and therefore PLN is currently studying a new formula for incentives in the industry sector.
Indonesia's electrification ratio stood at 85 percent in 2015, implying there are still around 40 million Indonesians that do not have instant access to electricity. In 2015 the Indonesian government unveiled its program to develop 35,000 MW of additional power generation capacity (the majority of which coal-fired) by 2019. This program not only aims to add households to the nation's electricity grid (there are currently still 12,659 villages in Indonesia that lack access to electricity) but also to supply more electricity to those regions where demand is high and supply is inadequate. In many regions of Indonesia power shortages are a daily phenomenon and cause problems in the production process of local industries.