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