Electricity consumption across Indonesia increased just 3.8 percent in year-on-year in January, and the 4.5 percent growth in 2019 was way below the government target of 6.3 percent, the energy ministry disclosed.
“Some new power plant projects are underway, so it becomes an issue. There will be an oversupply of power which will burden PLN’s financials,” said the energy ministry’s director general, Rida Mulyana. Eager to reign in the oversupply, developers have already shelved some projects citing doubts over their future profitability.
The ministry urged PLN to invest more in transmission and distribution networks, instead of power plants, so they can reach more area to sell the excess electricity. Fast-tracking the rollout of electric vehicles are also hoped to push up power demand and soak up some of the current oversupply.
PLN’s chief executive Zulkifli Zaini said earlier this week the utility seeks to boost capital spending by 90 trillion rupiah ($6.36bn) through bank loans and bonds. Most of this Capex is mean to go towards expanding the power grid and finalizing the ongoing construction of some power plants, he said without disclosing any names of projects.
Two years ago, PLNG already needed to curtailed the allocation of free cashflow for new power plant projects due to sluggish electricity demand. It already became clear at the time that only around 20 GW worth of power plants, included in the government’s 35 GW program were likely to commence operations by the end of 2019.
MHPS sees Indonesia’s power demand to top 4,400 TWh/year
In contrast, Mitsubishi Hitachi Power Systems (MHPS) remains convinced that Indonesia’s fast-growing population will help push up power consumption form 2,400 TWh per year seen today to 4,400 TWh/year by 2030. Considering Indonesia’s “limited renewables potential,” MHPS reckons the country’s rising electricity demand will largely be met by new gas-fired power units.
In the Java – Bali region, the Japanese manufacturer supplied and installed over 30 percent of the power generation capacity. Some sixteen month ago, MHPS commissioned the 300 MW unit-2 of the Tanjung Priok combined-cycle power plant ahead of schedule. Unit 1 of the Jawa-2 project initially went into operation as a simple gas turbine system this June with output nearing 300 MW, and Unit 2 doubled that capacity to 600 MW.
In Indonesia, MHPS claims to hold the top market share for large gas turbines, with a total power gen equipment supplied reaching 12 GW.