Indonesia’s state-owned PT Perusahaan Listrik Negara (PT PLN) dominates the country’s power sector, holding a monopoly in the transmission sector and functioning as a system operator. PT PLN issues a 10-year Electricity Power Supply Business Plan, known as Rencana Usaha Penyediaan Tenaga Listrik (RUPTL), to guide the development of power infrastructure to meet the country’s electricity demand. Recently, the utility unveiled its latest RUPTL, for 2021-30, wherein, for the first time, the majority of power generation projects to be developed are renewable energy based, accounting for 51.6 per cent of the 40,575 MW of power generation projects planned. The latest RUPTL forecasts that the electricity demand growth in the next decade will hover around 4.9 per cent per annum, lower than the average 6.4 per cent growth projections under the previous RUPTL (2019-28).
Renewable energy is becoming increasingly attractive in Indonesia due to its benefits. It supports the government’s environmental policy around carbon emissions and enables project deployment in a more decentralised way. Hence, transmission infrastructure by default has become a key focus area for the utility, which aims to integrate this upcoming renewable energy. The new RUPTL envisages the construction of over 47,723 ckt km of transmission lines and substations with 76,662 MVA of capacity by 2030.
Currently, transmission projects are developed by PLN and the interconnection related to independent power producer (IPP)-owned power plants can be carried out by relevant IPPs, depending on projects and PLN’s requirements. The new RUPTL marks a change in this approach and chalks out options for transmission projects to be carried out by the private sector under certain business schemes, such as build-operate-transfer (BOT), build-lease-transfer (BLT) or power wheeling.
As per the new electricity plan, PLN envisages to invest around IDR 213 trillion in the construction of transmission lines and substations between 2021 and 2030.
The Indonesian transmission system has eight interconnected networks and 600 isolated grids. The grids of Java, Bali and Madura are interconnected via 500 kV and 150 kV lines, the Sumatra grid is interlinked with other regions via 275 kV and 150 kV lines, and the Central Kalimantan, South Kalimantan and East Kalimantan grids are linked via a 150 kV line. West Kalimantan’s grid remains isolated from the networks of other provinces.
As of December 2020, Indonesia’s transmission line network stood at 61,334 ckt. km, of which about 5,250 ckt. km was at 500 kV, 3,648 ckt. km was at 275 kV, 46,680 ckt. km at 150 kV, and the remaining at 70 kV and below voltage levels. The total capacity of substation transformers operated by end 2020 was 150,038 MVA, an increase of 3.9 per cent over the previous year. The company owned 2,203 substation transformers, of which 77 were installed in the 500 kV system, 38 in the 275 kV system, 1,822 in the 150 kV system and the remaining in the below 70 kV system.
In 2015, the country rolled out a programme to add 35,000 MW of generation capacity to the national grid powered mostly by coal. Outside of the 35,000 MW programme, there is a parallel project to add 7,000 MW to the grid, again mostly from coal. A total of 47,930 ckt km of transmission lines and 122,631 MVA of substation capacity were planned as the supporting transmission network for these two programmes. At the end of 2020, 23,320.8 ckt. km or 48.66 per cent of the planned lines were energised, with 11,956.2 ckt. km or 24.94 per cent under construction. The remaining 12,653.3 ckt. km or 26.4 per cent was in the pre-construction phase. Similarly, 67.7 per cent (83,017 MVA) of the substation capacity has been commissioned, with 19,974 MVA under construction and the remaining 19,640 MVA in the pre-construction phase.
Some of the projects recently commissioned by PLN include the 500 kV TanjungJati B-Pemalang (Batang) overhead line and the 500 kV Batang EHV substation, the 150 kV West Sulawesi (Sulbar)- Central Sulawesi interconnection, the 150 kV Topoyo-Pasangkayu transmission line, the 275 kV Galang-Pangkalan Susu line, and the 150 kV Multi Nabati Asahan substation.
Financial and operational performance
The network losses for PLN improved from 9.32 per cent in 2019 to 9.15 per cent in 2020, consisting of transmission losses of 2.08 per cent and distribution losses of 7.22 per cent. The utility attributes the improvement to investments and repairs in the PLN electricity system, including power plants, substations, and transmission and distribution networks, which have been carried out in recent years. Meanwhile, in 2020, the consolidated System Average Interruption Duration Index (SAIDI) was reduced to 763.13 minutes per customer, faring better than the 1,136.72 minutes per customer recorded in 2019. The consolidated System Average Interruption Frequency Index (SAIFI) was 9.25 times per customer, marking an improvement over 2019, when it stood at 11.51 times per customer. The major cause of power interruption was distribution interruptions, especially those at feeder facilities.
PLN’s revenues recorded a decline of about 4 per cent in 2020 to stand at ID 345.415 trillion, dropping from IDR 359.61 trillion in 2019. The main contributor to operating revenues was electricity sales, which reached IDR 274.89 trillion in 2020, but decreased by 0.4 per cent from IDR 276.06 trillion in 2019. The net income, however, increased from IDR 4,322 billion in 2019 to IDR 5,993 billion in 2020. During the period between 2016 and 2019, capital expenditure on transmission marked a 7.9 per cent growth, from IDR 30,542 billion in 2016 to IDR 38,367 billion in 2019.
Future plans and investments
The latest RUPTL (2021-30) has opened up significant avenues for stakeholders in green power projects, smart grids and electric vehicles (EVs). It also intends to speed up Indonesia’s energy transition towards net zero.
Over the next decade, PLN will focus on developing transmission systems at the 500 kV and 150 kV voltage levels in the Java-Bali system and 500 kV, 275 kV, 150 kV and 70 kV lines in the East Indonesia and Sumatra systems. The country is also part of the ASEAN power grid project, which aims to link 10 Southeast Asian countries. Under this, the Malaysian and Philippine grids are planned to be linked with that of Indonesia. PLN is working towards developing major interconnections such as the Peninsular Malaysia– Sumatra interconnector, the Batam– Singapore interconnector, the East Sabah-East Kalimantan interconnector and the Singapore-Sumatra interconnector for improving the reliability of the transmission system. PLN is cooperating with Malaysia’s Sabah Electricity Sdn Bhd to evaluate the prospects of power trade between East Kalimantan and Sabah. The implementation of this link would bolster the case for a future extension from Borneo to Mindanao (the Philippines).
Another focus area for PLN is the development of the network system by investing in smart grids to create an efficient electric power regulation system, provide reliable electricity supply, and help in the utilisation of renewable energy sources. The roadmap to smart grid implementation entails pilot projects in the Surya Cipta Sarana Industrial Zone, Karawang, and Sumba Island, East Nusa Tenggara; and the development of a smart grid with advanced metering infrastructure (AMI) technology in a distribution area in Jakarta. Recently, PLN implemented a plan to develop a smart
micro grid in Mandalika, West Nusa Tenggara province, as well as on Sulawesi Island. As per RUPTL 2021-30, PLN also plans to launch several pilot projects, which include the implementation of smart grids in industrial and business areas; installation of an automatic despatch system; development of smart microgrids in areas with high renewable energy scope; implementation of smart grids with AMI technology in Jakarta, Bogor and Bali; and deployment of a digital substation along with an “E-mobility” platform for the existing EV charging stations of PLN.
PLN has set ambitious targets for the country’s power sector, especially for renewable energy. This would require robust transmission infrastructure. Moreover, the Indonesian government’s initiative to expand the generation capacity to 40.6 GW by 2030 makes it imperative for PLN to develop a well-built transmission infrastructure to support it. However, significant critical support from the government will be required to achieve these goals, ranging from budgetary support to the requisite policy and regulatory framework. A small number of transmission lines have been built by IPPs in remote areas to connect power plants to PLN substations but private sector investment is still needed. There is also potential for private sector investment in the unregulated, decentralised, mainly off-grid distribution options, which will be important for achieving universal and reliable electrification.
Although the government has a record of making subsidy reimbursements to PLN, there have been delays in the disbursement of compensation income in the past three years. Net, net, PLN’s success over the next decade will largely depend upon addressing investment issues and policy design aspects that are critical to the future of the sector.