Indonesia will maintain the monopoly of electricity by state utilities, says the president's assistant
A close advisor to Indonesian President Prabowo said that he has decided to not change the monopoly of the state-owned power utility on the electricity markets despite calls to liberalise the market to encourage investment in renewable energy.
Hashim Djojohadikusumo is the brother of the president and his adviser. He said that despite some conglomerates' requests, Prabowo had decided to keep PLN as a monopoly.
Hashim said at an economic forum that "the state will remain the controller as long as Prabowo is the president."
During the election campaign last year, a proposal to break the monopoly held by the state-run Perusahaan Listrik Negara was considered to speed up the adoption of renewables.
In a draft bill for renewable energy, which the parliament has yet to debate in detail, some lawmakers included a proposal to "power wheel" - allowing producers of renewable electricity to wheel it onto PLN’s grid and sell directly to consumers.
PLN, which manages power plants and purchases from independent producers, is the only seller of electricity to most customers.
Hashim stated that if we opened up the market - not because we are anti-foreigners but we welcome foreigners - power wheeling could turn it into the Wild West, and our electricity sector would be dominated non Indonesians.
Hashim said that the decision should not discourage foreign investment. He cited interest from companies in Qatar and Abu Dhabi who are involved with renewable energy.
Analysts have stated that some companies find renewable energy investment in Indonesia unattractive because of the competition from cheaper coal power. They also have to wait until PLN, as their sole buyer, purchases them. Analysts argued that allowing independent producers to sell directly to customers who are willing to pay a higher price could encourage investment.
Indonesia has committed to phase out coal-fired plants. According to PLN’s power supply plan, which is yet to be finalized, it wants to increase renewable energy by adding more geothermal, solar and hydro capacity over the next ten years. (Reporting and writing by Stefanno Sulaiman, Gayatri Suryo; editing by Kim Coghill).
(source: Reuters)
