Indonesia plays power catch-up

Indonesia, one of Asia’s largest fuel exporters, now faces dire power shortages, threatening to hold back an economic recovery which at 6.3 % reached its fastest pace in a decade last year. Chronic underinvestment and fast-rising industrial and consumer power demand means Indonesia is facing undercapacity constraints, which the government warns could reach crisis levels by next year.

The government is pinning its hopes on a “crash program” to add 10,000 megawatts (MW) of coal-fired power, mostly financed and built by Chinese companies, in a bid to rapidly expand capacity by over one-third. If the crash program fails to meet its goals, energy policy could become a major campaign issue as Indonesia gears up for general elections next year.
So far Indonesia’s 26,500MW power grid has not yet suffered the

drastic shortages seen throughout the 1990s in China, India and the Philippines, where frequent blackouts dragged severely on economic growth. But Indonesia’s many decrepit power plants are ageing and the country’s main Java-Bali power grid is straining to meet demand.

Some analysts argue that Indonesia already faces a crisis. The capital, Jakarta, was hit with widespread power outages in March, as ships carrying coal from Kalimantan to Java were delayed by stormy weather.

At least two power plants had to reduce production and power cuts hit several commercial and residential areas while coal stocks fell to dangerous levels of only two or three days of reserves. Critics blamed the mini-crisis on poor planning. Officials at the state-run power utility Perusahaan Listrik Negara (PLN) said that power shortages in March were symptomatic of mounting strains on the entire grid.

Of 17,500MW of installed capacity on the Java-Bali grid – three-quarters of the country’s total – only about 15,500MW is operational at any given time. Many of the power plants that are up-and-running are old and inefficient, according to one PLN official who requested anonymity.

Daily evening demand peaks at around 15,200MW, leaving a tight 2% reserve margin, according to PLN. The supply cushion gets tighter and even falls short of demand when plants routinely shut for maintenance or repairs, according to the PLN official.

Asia Times