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PLN hopes to increase electricity use amid oversupply

Jakarta Post - February 4, 2019

Stefanno Reinard Sulaiman, Jakarta – State electricity firm PLN hopes its customers will use more electricity this year through incentive measures amid the ongoing construction of mega power plant projects, which have been criticized as unnecessary as consumption growth has been slowing.

PLN director for strategic procurement Supangkat Iwan Santoso told the press on Monday that one of the measures would be to lower or even to exempt the cost of increasing power capacity – a plan which was first voiced years ago but which has never been materialized.

"It is for our customers, to make it easy for them when they want to have higher power capacity. Why would we complicate the procedures for someone who wants to use more electricity?" he said.

Uncertainty remains, however, on the size of the incentives, and whether they will involve full exemptions or discounts only.

"Financially speaking, it's true that the program will require some investment, but at the same time electricity sales should also increase," Supangkat added.

The firm has set the target for electricity sales this year of 245 terrawatt hours (twh), about 2.5 percent higher than 2018's target of 239 twh, of which only 232 twh was achieved.

PLN corporate planning director Syofvi Roekman said the measure would also complement the government's push for electric vehicles (EVs). The government has a target that EVs will account for 20 percent of total vehicles by 2025.

"We expect the legality of this measure can be completed before the Presidential Regulation [Perpres] on EVs is issued," she said.

Syofvi added that EV owners would be priority customers in the program as they will need to increase their power capacity by around 1,000 to 2,000 VA to enable them to charge their cars at home in the future.

This is not the first effort by PLN to overcome electricity oversupply in the country, especially for the Java-Bali power grid, which has an excess of around 38 percent.

Another effort by PLN has been to extend the commercial on date (COD) of several power plant projects for at least one year longer.

The measure to delay some of the power plant's COD is focusing on the government's 35-gigawatt power plant expansion project, of which PLN has 10 GW, 28.5 percent, of the total capacity.

Previously, PLN regional business director for the eastern part of Java, Bali and Nusa Tenggara, Djoko Rahardjo Abumanan, said one of the reasons for the electricity surplus was the unexpected slow growth of the economy in recent years.

"[To avoid oversupply] for 2019 we've proposed an assumption of electricity consumption growth at 6.4 percent, or we will bleed in paying our debts," he told The Jakarta Post on Friday.

In the electricity procurement business plan (RUPTL) for 2018-2027, the government set an electricity consumption growth target of around 8 percent.

However, the realization in 2017 and 2018 was much lower than the target at 7.8 percent and 6.9 percent, respectively.

Responding to the oversupply situation, Yogyakarta-based Gadjah Mada University energy expert Fahmy Radhi recently said that the public should not worry as it was a long-term investment.

"The situation [surplus] acts as a reserve to anticipate the future growth of industry in some regions. Hence, when the industry demand for electricity arises, the supply will be ready," he told the Post.

Source: https://www.thejakartapost.com/news/2019/02/04/pln-hopes-to-increase-electricity-use-amid-oversupply.html