PLN is an Indonesian government-owned corporation which has a monopoly on electricity distribution

Electricity distribution

File:Electricity grid simple- North America.svg|thumb|380px|right|Simplified diagram of AC electricity distribution from generation stations to consumers...

 in Indonesia

Indonesia

Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...

.

History

The history of electrical companies in Indonesia began at the end of 19th century when Dutch colonialists established the first electrical generator. The electrical energy enterprise then expanded into the public company, NV.NIGM, formerly dealing in gas area only, which enlarged its business into the area of electrical energy. In World War II, the Japanese took control of the electrical companies. After Indonesian Independence day on August 17, 1945, Indonesian youth took control of the electrical companies in September 1945 and handed them over to the government of the Republic of Indonesia.

On October 27, 1945 President Sukarno

Sukarno

Sukarno, born Kusno Sosrodihardjo was the first President of Indonesia.Sukarno was the leader of his country's struggle for independence from the Netherlands and was Indonesia's first President from 1945 to 1967...

 established the Jawatan Listrik dan Gas (Bureau of Electricity And Gas), with a generation capacity of only 157.5 MW.

On January 1, 1961, the bureau of Electricity and Gas was changed into BPU PLN ('Badan Pimpinan Umum Perusahaan Listrik Negara) which dealt in the areas of electricity, agas, and kokas (a type of fuel derived from the remains of coal).

On January 1, 1965, BPU-PLN was closed and two governmental companies, were set up, Perusahaan Listrik Negara (PLN) handling the electrical energy and Perusahaan Gas Negara (PGN) handling gas. The capacity of the electrical-power generator of PLN, then, was 300 MW.

Indonesia's new electricity law, approved in September 2002, requires an end to PLN's monopoly on electricity distribution within five years, after which time private companies (both foreign and domestic) will be permitted to sell electricity directly to consumers. However, all companies will need to use PLN's existing transmission network.

Operations

In the first half of 2011, the PLN generated 88 terawatt-hours (tWh). The firm generated around 24% of its output using oil-based fuel with plans to reduce the share to 3% by 2013 and 1.7% by 2014. The forecast for the full year (2011) is around 182 tWh (equivalent to around 760 kWh per capita).

PLN currently employs 47,532 staff across the country with 15.6% of them having graduated with either an ordinary or a postgraduate degree.

Service

The reliability of electricity supply has steadily improved in Indonesia in recent decades. Supply is more reliable in Java where the grid is relatively well-developed than in the Outer Islands (such as Sumatra

Sumatra

Sumatra is an island in western Indonesia, westernmost of the Sunda Islands. It is the largest island entirely in Indonesia , and the sixth largest island in the world at 473,481 km2 with a population of 50,365,538...

, Sulawesi

Sulawesi

Sulawesi is one of the four larger Sunda Islands of Indonesia and is situated between Borneo and the Maluku Islands. In Indonesia, only Sumatra, Borneo, and Papua are larger in territory, and only Java and Sumatra have larger Indonesian populations.- Etymology :The Portuguese were the first to...

 and Kalimantan

Kalimantan

In English, the term Kalimantan refers to the Indonesian portion of the island of Borneo, while in Indonesian, the term "Kalimantan" refers to the whole island of Borneo....

) where most areas are serviced by localised grids often powered by small diesel plants. Nevertheless, power outages are still common in Java. There was, for example, a particularly severe power outage in 2005

2005 Java-Bali Blackout

The 2005 Java–Bali Blackout was a power outage across Java and Bali on 18 August 2005. Affecting some 100 million people, it is to date the largest and most widespread power outage in history.-Immediate impact:...

 which reportedly affected around 100 million people across Java and Bali for over five hours.

Finances

The PLN has -- and has had, for many years -- considerable trouble with internal revenue flows. For one thing, government-regulated tariffs are often too low to cover operational costs and have not been set at a level sufficient to make a reasonable contribution towards capital costs for many years. For another thing, there is widespread consumer resistance to payment of electricity bills. The cash flows of the company are often weighed down with overdue debts from consumers. As just one example, in the Banyumas district (kabupaten) of Central Java in late 2011, it was reported that 60 percent (over 80,000) of the PLN's 140,000 customers in the area were overdue with payments for their electricity bills causing the company over $300,000 in losses each month. Of the customers in arrears, 13,000 were considered very bad customers and were targeted for disconnection. But the PLN's efforts to improve debt collection, both in Banyumas and in many other areas of Indonesia, often meet with considerable consumer resistance. In Banymas, consumers complained that the PLN's efforts to improve debt collection were unfair and failed to reflect the social obligations expected to a state-owned enterprises.

Apart from internal revenue flows, the PLN relies on large government subsidies to support operations and, especially, capital expenditure. In recent years, as economic conditions in Indonesia have improved following the Asian financial crisis of 1997-98, PLN has also been able to undertake significantly increased borrowings through bond issues. In November 2011, for example, PLN issued $1 billion of debt at reasonable market prices (10 years at 5.5% coupon value). Demand for the debt (estimated at $5.5 billion) significantly exceeded the supply of bonds on offer. Through the issuance of debt of this kind the PLN is both raising funds and participating in the development of the domestic debt market in Indonesia.

Hydropower

There is considerable hydropower potential in Indonesia. However, most potential capacity is at sites which are hard to access and extremely distant from any significant potential markets. There is believed to be significant hydropower potential of over 22,000 MW in Papua

Papua

Papua was the name, as provided to the Portuguese commander Jorge de Meneses while sheltering there in 1526, of the people living on Waigeo, one of the Raja Ampat Islands west of the Vogelkop Peninsula, now part of the West Papua province of Indonesia. The Spanish pilot Martin de Uriarte in the...

 and perhaps another 16,000 MW in South Kalimantan

South Kalimantan

South Kalimantan/South Borneo is one of the thirty-three Provinces of Indonesia and one of four Indonesian provinces in the Indonesian part of Borneo. The provincial capital is Banjarmasin...

 and Central Kalimantan

Central Kalimantan

Central Kalimantan is a province of Indonesia, one of four in Kalimantan - the Indonesian part of the island of Borneo. Its provincial capital is Palangka Raya.The province has a population of just over 2.2 million at the 2010 Census...

. Total Indonesian hydropower potential has been put at over 75,000 MW. There are, however, no plans for investments in any significant hydropower projects in Indonesia in the near future.

External links

• PT PLN (persero) - Official Site
• Peter McCawley, The Indonesian electric supply industry, PhD thesis, Australian National University, Canberra, 1971.