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.
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Today's Headlines Electricity Demand
Demand for lighting in Indonesia will rise in line with the rising electrification ratio (the percentage of households that are connected to the nation's electricity grid). 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. The government is eager to raise the electrification ratio and this means that demand for lighting should grow accordingly. However, a large portion of lamps/lighting that is sold in Indonesia is still imported from abroad. As such, there should be lucrative business opportunities in Indonesia's lighting industry.
Indonesia's electricity subsidies may exceed the IDR 38.39 trillion (approx. USD $2.8 billion) allocated in the 2016 State Budget as there are probably more customers entitled to electricity subsidy than previously estimated. Last month, the Indonesian government and House of Representatives (DPR) agreed on cutting electricity subsidies for 450 VA and 900 VA households, per 1 January 2016, by disconnecting those people that are currently enjoying cheap electricity rates while they are not classified as 'poor' or 'near-poor' and thus do not deserve the subsidized price.
Despite having abundant natural resources at its disposal (including coal and gas), Indonesia has difficulty to supply enough electricity to its people and businesses. Robust economic growth over the past decade has given rise to increased domestic demand for electricity but the country has not been able to adequately meet demand resulting in frequent blackouts and in one of the lowest electrification rates (the percentage of Indonesian households connected to the nation's electricity grid) in the region (about 80.4 percent at end-2013).
Perusahaan Listrik Negara (PLN), the state-owned utility company that has a monopoly on the distribution of electricity in Indonesia, recorded a 158 percent growth (year-on-year) in net profit to IDR 12.3 trillion (USD $1.1 billion) in the first half of 2014 due to improved operational efficiency and a foreign-exchange gain of IDR 4.4 trillion (USD $376 million). Meanwhile, the company's revenue increased 24 percent to IDR 145.1 trillion (USD $12.4 billion) as electricity sales increased and PLN received more subsidies from the Indonesian government.
Indonesian state-owned electricity firm Perusahaan Listrik Negara (PLN) said that Indonesia - Southeast Asia's largest economy - is expected to nearly double domestic consumption of thermal coal over the next eight years in an attempt to meet the nation's growing electricity demand. Moreover, coal, of which the country has huge reserves at its disposal, is regarded a better fuel source in electricity generation compared to expensive diesel. At present, many power stations in Indonesia are still diesel-powered.
Latest Columns Electricity Demand
Indonesia needs to prepare for higher electricity tariffs as the government and House of Representatives (DPR) agreed on cutting electricity subsidies for 450 VA and 900 VA households starting from 1 January 2016. Indonesian authorities only want to provide electricity subsidies to the 24.7 million poorest Indonesian households. However, currently around 45.4 million Indonesians have connections of 450 VA and 900 VA.
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