Electricity crisis

Electricity crisis

The marketing director of the state electricity company PLN,
Tunggono, said recently that the company was currently striving
to cope with an energy (electricity) crisis in 28 regions in
Indonesia, excluding Java, Bali and Batam. For that purpose, the
PLN is speeding up the construction of power stations and seeking
energy sources from big companies with surplus power generation
capacity.

It seems to be difficult to overcome the energy crisis by
speeding up the construction of power stations, as PLN is now
troubled by a fund shortage, meaning that the company has
relatively limited investment funds. Expecting new loans from
foreign sources is not realistic as Indonesia's external debts
have swollen.

The most feasible way for PLN, would be to seek energy sources
from major private companies that have surplus power. However,
the price of electricity produced by private companies is far
higher than the price of PLN's electricity. Power boosting at
existing stations, which has been discussed, will not keep up
with the rising demand for electricity in Java, with a growth
rate of 10 percent annually.

It seems to be necessary to anticipate the need for additional
power supplies for Java and Bali. With a 10 percent growth rate
in electricity consumption as recorded last year, Java and Bali
will be troubled by power shortages by 2005, unless new power
plants are built.

As part of efforts to avoid an electricity crisis in Java and
Bali, the PLN should renegotiate the electricity price with
private investors without sacrificing the public interest.

-- Neraca, Jakarta