Indonesia’s Electricity Reserves Exceed 32% of Peak Load

Electricity supply from PLN

Indonesia’s electricity reserves are overflowing by up to 11 Gigawatts (GW) or 32% excess of the peak load. This excess electricity reserve is not a good thing.

Referring to the records of the Ministry of Energy and Mineral Resources, the national electricity capacity is 46.82 GW with a peak load of 35.24 GW. That way, there is still a remaining operating reserve of 11.58 GW, or around 32.86%.

The Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa said that excess electricity in Indonesia is a bad sign. This can create a burden for the national electricity company PT PLN (Persero) which buys electricity from private power companies or Independent Power Producers (IPP).

“Excess electricity is not good because it means that electricity cannot be distributed and creates a burden for PLN which buys electricity from IPPs,” he was quoted as saying Thursday (15/12/2022).

Fabby revealed that the number of losses borne by PLN depended on the agreement negotiated with the IPP.

Fabby explained that last year PLN managed to avoid a loss of IDR 37 trillion thanks to the postponement of the operation of the new coal-fired Steam Power Plant (PLTU), which should have been in operation since 2021/2022, but due to the Covid-19 pandemic it was postponed to 2022/2023.

For this reason, Fabby hopes that PLN will continue to negotiate to reduce the obligation to pay fines due to the “Take or Pay” (TOP) scheme in the power purchase contract.

As is known, the Take or Pay scheme means that PLN must take electric from the IPP following the contracted volume. If the electricity supply taken by PLN is not following what is contracted or under the contract, then this means that PLN must pay the penalty agreed in the contract.

In addition to negotiating the obligation to pay penalties, according to him, PLN can also try to postpone the PLTU operation again, which could possibly be postponed.

“Due to the huge financial burden, I suggest that PLN negotiate to lower the top, and cancel the PLTUs that can be canceled,” he said.

Not only that, according to him, the early retirement of old power plants can also contribute to reducing the burden on this country’s electricity companies.

“In addition, there is potential for 3-4 GW of PLN’s old PLTU which can be retired early, which can reduce the generator’s oversupply,” he said.

As is known, the problem of electricity oversupply is still plaguing PT PLN (Persero). This is the impact of predictions of economic growth that did not meet expectations, while new power plants continued to emerge.

There are at least two giant PLTUs that will start operating in 2022. The two coal-fired power plants are the Batang PLTU, Central Java, and the Jawa 4 Tanjung Jati B PLTU, Jepara, Central Java.

The operation of the two giant power plants is being carried out during Indonesia’s electricity condition which is experiencing a surplus.

Previously, the Ministry of Energy and Mineral Resources said that this year Indonesia would experience a surplus of electricity reaching 6 GW to 7 GW.