(Image Credit : EMR Ministry)

JAKARTA (TheInsiderStories) – The Energy and Mineral Resources Ministry (EMR Ministry) has recently launched the much-awaited electricity supply business plan for the period of 2018-2027, which is prepared by the state electricity company PT Perusahaan Listrik Negara (PLN).

The government made some adjustments, however, one thing is unchanged is that in the next ten years, the country remains dependent on coal to generate power plants. The decision has raised eyebrows among some business players given that the world is now moving towards a greener and cleaner energy.

It appears that the Indonesian government opted for a snailed-pace growth in term of developing renewable energy. The government appears to adopt a more conservative approach in developing renewable energy in the country.

Data Source : EMR Ministry

The electricity supply business plan, known as RUPTL, shows the plan of PLN to procure electricity from the power plant producers, including private Independent Power Producers (IPPs). The business is also used as a guideline as to which locations PLN may wish to see power plants are to be developed across the country.

The 10-year electricity supply business plan is revised every year. Based on the latest business plan, the government projected the electricity demand to grow by only 6.87 per annum, lower than the growth of last year at 8.3 for the period of 2017-2026. The projection takes into account the expected slow economic growth in the next years.

The energy ministry set less ambitious power plant development compared to last year. Based on the latest business plan, the government now aims to add 56,024 MW of power plants in the next year, lower than the previous projection of 78,000 MW set in the 2017-2026 ten-year plan. Currently, the country’s installed capacity power plants stand at around 60,000 MW.

Interestingly, the coal-fired power plant will remain as the main source of electricity supply, contributing 54.4 per cent by 2025, followed by renewable energy at 23.0 per cent, gas 22.2 per cent and gasoline 0.4 per cent.

In the new business plan, coal-fired power plants are slashed by 5,000 MW from the target set last year, gas power plant cut by 10,000 MW, hydropower plant by 1,000 MW and geothermal power plant is cut by 1,000 MW. Meanwhile, the installed capacity of renewable energy is raised to 2,000 MW higher than the capacity of 1,200 MW set in previous year’s business plan.

To support the power plants development, the government will develop 65,855-kilometers of the transmission network, sub-stations at a volume of 151,424 MVA, distribution network along 526,390 km and distribution substation of 50,216 MVA.

The EMR Minister Ignasius Jonan admitted that the changes in the latest electricity supply business plan were driven by lower-than-expected economic growth target, which has also resulted in a slow-growth demand for electricity.

The energy ministry claimed the preparation of the electricity supply business plan already took into account the government’s efforts to light up 2,510 villages across the country that have yet to be connected with electricity, the greater utilization of local resources (mine mouth, gas wellhead, biogas, biomass, hydropower, solar and wind power).

Despite dependent on coal is expected to remain, the positive side is that the energy ministry has decided to halt the development of new coal-fired power plants, other than the existing ones or that have been planned.

Written by Roffie Kurniawan, email: roffien@theinsiderstories.com