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Indonesia Power Report Q4 2012
Business Monitor International, October 2012, Pages: 47
The Indonesia Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Indonesia's power industry.
A bleaker outlook for the Indonesian economy has led us to revise down our power forecast for the country. However, we note that Indonesia’s power sector is still very attractive especially over the long term, owing to its economic fundamentals and increasing electrification rates. We expect growth to come mainly from the coal and geothermal power sectors as the country has significant reserves, and exploitation will be economical relative to other sources of generation. The country will also have to increase the share of coal produced for local uses in order to meet its coal-fired generation needs.
We forecast power generation in Indonesia to grow by 7.9% over 2012, down from our previous forecast of 8.0%. This slight revision down is attributable to our bleaker economic outlook for the near term. We expect thermal generation to grow by 8.1% from 2011, comprising mainly of 9.8% growth in coal generation. Non-hydropower generation is set to grow by 10.8% in 2012, as a number of geothermal and wind projects come online.
Over the period 2012-2021, we forecast power generation in Indonesia to grow an average of 7.4% per annum. This modest figure reflects our positive outlook for the country’s power sector, which we base on the Indonesia’s solid economic fundamentals and improving electrification rates. We believe that growth will be propelled primarily by coal-fired generation and non-hydropower generation, as the government seeks to reduce the country’s reliance on oil-based generation.
Key trends and developments in the Indonesian electricity market:
- The government held off increasing electricity prices for consumers in April 2012, due to strong public opposition. This means that the country will have to continue subsidising electricity for the near future, as the average cost of generation still exceeds the electricity price.
- State utility PLN has announced its intention to acquire coal mines, due to the strong historical and forecasted growth in coal consumption. Its subsidiary, PLN Batubara, will perform acquisitions with an expected budget of INR10trn (US$1.05bn) to finance acquisitions of entire mines or strategic stakes.
- The feed-in tariff for geothermal energy was raised in July 2012. As a result, we believe that private producers will be more interested in the sector, but that there is still room for further tariff increases.
- Industry reports suggest that Indonesia holds up to 76 gigawatts of hydropower potential, but the country has yet to embark on the large hydroelectric programmes seen elsewhere in the Asia Pacific region. The capital costs involved have most likely deterred investors who prefer to stick with conventional thermal schemes or embrace geothermal supply.
BMI Industry View 5
SWOT Analysis 6
Indonesia Power SWOT 6
Regional Industry Overview 7
Industry Forecast Scenario 11
Indonesia Snapshot (Macro) 11
Table: Country Snapshot: Economic and Demographic Data 11
Table: Country Snapshot: Power Sector 11
Indonesia Forecast Scenario 12
Electricity Generation and Power Generating Capacity 12
Table: Indonesia Total Electricity Generation Data And Forecasts, 2010-2016 12
Table: Indonesia Total Electricity Generation Long-Term Forecasts, 2015-2021 13
Table: Indonesia Electricity Generating Capacity Data And Forecasts, 2010-2016 15
Table: Indonesia Electricity Generating Capacity Long-Term Forecasts, 2015-2021 16
Electricity Consumption 22
Table: Indonesia Total Electricity Consumption Data And Forecasts, 2010-2016 22
Table: Indonesia Total Electricity Consumption Long-Term Forecasts, 2015-2021 22
Transmission & Distribution, Imports & Exports 23
Table: Indonesia Electric Power Transmission And Distribution Losses Data And Forecasts, 2010-2016 23
Table: Indonesia Electric Power Transmission And Distribution Losses Data And Forecasts, 2015-2021 23
Key Policies/Market Structure 26
Regulation and Competition 26
Sustainable Energy Policies 27
Power Risk/Reward Ratings 28
Asia Regional Power Risk/Reward Ratings 28
Table: Asia Power Risk/Reward Ratings 33
Indonesia Power Risk/Reward Ratings 33
Competitive Landscape 35
Perusahaan Listrik Negara (PLN) 36
Glossary of Terms 39
Table: Glossary of Terms 39
Methodology And Sources 40
Industry Forecasts 40
Power Industry - Data Methodology 41
Generation and Consumption Data 41
Electricity Generation Capacity Data 42
Power Risk/Reward Ratings Methodology 42
Table: Power Risk/Reward Indicators 44