INDONESIA POWER MARKET OUTLOOK TO 2030, UPDATE 2014 MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

Transcription

1 REFERENCE CODE GDPE0723ICR PUBLICATION DATE JULY 2014 INDONESIA POWER MARKET OUTLOOK TO 2030, UPDATE 2014 MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

2 Executive Summary Coal- and Gas-Based Thermal Capacity Dominates Power Mix Coal-based thermal capacity dominated the Indonesian power mix in 2013, with a share of XX% of total installed capacity, followed by gasbased thermal capacity, with XX%. Indonesia is a leading country in terms of fossil fuel reserves of coal and natural gas, hence the dominance of fossil fuels in the power mix. Significant contributions were also made by hydropower, with a share of XX%, and oil-based thermal capacity, with a share of XX%. Other renewable sources, which include onshore wind, solar Photovoltaic (PV), biomass, and biogas, together accounted for XX% of the power mix. Power Market, Indonesia, Breakdown of Cumulative Installed Capacity by Fuel Type (%), 2013 Oil (thermal) Hydropower Renewables (biomass, biogas, onshore wind, and solar PV) Coal (thermal) Continuous Increase in Annual Power Consumption and Generation Annual electricity consumption continued to increase, owing to rising demand from the industrial, residential and commercial sectors. In 2000, annual electricity consumption was XX Terawatt hours (TWh). It increased to XX TWh in 2013 at a Compound Annual Growth Rate (CAGR) of XX%. Annual power generation also increased between 2000 and 2013, from XX TWh to XX TWh, at a CAGR of XX%. Most of the additional power generated came from coal and gas. Power Market, Indonesia, Annual Power Consumption and Generation (TWh), Annual power consumption and generation (TWh) Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on June 27, 2014] Gas (thermal) Source: GlobalData, Power Database [Accessed on June 27, 2014] 2

3 Table of Contents 1 Table of Contents 1 Table of Contents List of Tables List of Figures Introduction GlobalData Report Guidance Indonesia, Power Market, Snapshot Indonesia, Power Market, Macro-economic Factors Indonesia, Power Market, Supply Security Indonesia, Power Market, Generation Infrastructure Indonesia, Power Market, Transmission Infrastructure Indonesia, Power Market, Opportunities Indonesia, Power Market, Challenges Indonesia, Power Market, Market Analysis Indonesia, Power Market, Supply Structure Indonesia, Power Market, Key Market Players Indonesia, Power Market, Financial Deals Deal Volume and Value Analysis, Deals by Type, Indonesia, Power Market, Demand Structure Electricity Consumption by Sector, Indonesia, Power Market, Regulatory Scenario

4 Table of Contents 5.1 Indonesia, Power Market, Key Electricity Policies The Electricity Law The Energy Law No. 30/ Regulation for Permitting Electricity Export and Import by PLN Indonesia, Power Market, Renewable Energy Development Indonesia, Power Market, National Coal Policy Indonesia, Power Market, Nuclear Development Scenario Indonesia, Power Market, Foreign Investment Scenario Indonesia, Power Market, Capacity and Generation Overview Indonesia, Power Market, Cumulative Installed Capacity, Breakdown by Fuel Type, Indonesia, Power Market, Cumulative Installed Capacity and Annual Power Generation, Cumulative Installed Thermal Power Capacity and Annual Thermal Power Generation, Cumulative Installed Hydropower Capacity and Annual Hydropower Generation, Cumulative Installed Renewable Power Capacity and Annual Renewable Power Generation, Indonesia, Power Market, Transmission and Distribution Overview Indonesia, Power Market, Transmission Overview Indonesia, Power Market, Distribution Overview Indonesia, Power Market, Grid Interconnection Indonesia, Power Market, Competitive Landscape: Snapshot of Leading Power-generating Companies

5 Table of Contents 8.1 Key Company in the Indonesia Power Generation Market, PLN PLN, Company Overview PLN, Business Description PLN, SWOT Analysis PLN Strengths PLN Weaknesses PLN Opportunities PLN Threats Appendix Market Definitions Power Installed Capacity Electricity Generation Electricity Consumption Coal-Fired Power Plant Hydropower Plant Nuclear Power Renewable Energy Resources Abbreviations Bibliography GlobalData s Methodology Coverage Secondary Research and Analysis

6 Table of Contents Primary Research and Analysis Disclaimer List of Tables Table 1: Power Market, Indonesia, Gross Domestic Product ($bn), Population (million), and Annual Power Consumption (TWh), Table 2: Power Market, Indonesia, Market Share of Power Generation Companies (%), Table 3: Power Market, Indonesia, Deal Value ($bn) and Number of Deals, Table 4: Power Market, Indonesia, Share of Deals by Type (%), Table 5: Power Market, Indonesia, Annual Power Consumption (TWh), Table 6: Power Market, Indonesia, Power Consumption by Sector (%), Table 7: Power Market, Indonesia, Foreign Direct Investment ($bn), Table 8: Power Market, Indonesia, Cumulative Installed Capacity Breakdown by Fuel Type (%), Table 9: Power Market, Indonesia, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), Table 10: Power Market, Indonesia, Leading Active Thermal Power Plants, Table 11: Power Market, Indonesia, Leading Upcoming Thermal Power Plants, Table 12: Power Market, Indonesia, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Table 13: Power Market, Indonesia, Leading Active Hydropower Plants, Table 14: Power Market, Indonesia, Leading Upcoming Hydropower Plants (MW), Table 15: Power Market, Indonesia, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower Generation (TWh), Table 16: Power Market, Indonesia, Leading Active Renewable Power Plants, Table 17: Power Market, Indonesia, Leading Upcoming Renewable Power Plants,

7 Table of Contents Table 18: Power Market, Indonesia, Cumulative Installed Renewable Power Capacity (GW) and Annual Renewable Power Generation (TWh), Table 19: Power Market, Indonesia, Growth in Transmission Line Length (Ckm), Table 20: Power Market, Indonesia, Growth in Distribution Line Network (Ckm), Table 21: PLN, SWOT Analysis Table 22: Abbreviations List of Figures Figure 1: Power Market, Indonesia, Gross Domestic Product ($bn) and Population (million), Figure 2: Power Market, Indonesia, Annual Power Consumption (TWh), Figure 3: Power Market, Indonesia, Market Share of Power Generation Companies (%), Figure 4: Power Market, Indonesia, Deal Value ($bn) and Number of Deals, Figure 5: Power Market, Indonesia, Share of Deals by Type (%), Figure 6: Power Market, Indonesia, Annual Power Consumption (TWh), Figure 7: Power Market, Indonesia, Power Consumption by Sector (%), Figure 8: Power Market, Indonesia, Cumulative Installed Capacity Breakdown by Fuel Type (%), Figure 9: Power Market, Indonesia, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), Figure 10:Power Market, Indonesia, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Figure 11:Power Market, Indonesia, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower Generation (TWh), Figure 12:Power Market, Indonesia, Cumulative Installed Renewable Power Capacity (GW) and Annual Renewable Power Generation (TWh),

8 Introduction 2 Introduction Indonesia is the largest economy in Southeast Asia. It is the fourth-most populous country and has the 17 th largest economy in the world. Post-independence, it has seen tremendous economic development, partly as a result of government changes to its regulatory framework, which have increased investment from both the foreign and domestic private sector. Despite this, Indonesia struggles with poverty, unemployment, corruption, poor infrastructure, a complex regulatory environment and unequal resource distribution among regions. With an estimated Gross Domestic Product (GDP) (at current prices) of $XX billion in 2013, Indonesia registered growth of XX% in the same year (CIA, 2014). The industry sector was estimated to account for XX% of Indonesia s GDP in 2013, followed by the service sector (XX%) and the agriculture sector (XX%). Indonesia has substantial natural resources, including crude oil, natural gas, tin, copper and gold. It is a major importer of chemicals, fuels, food items, machinery, equipment, and crude oil. Indonesia exports gas, coal, electrical appliances, rubber, textiles and plywood. Its major trading partners are China, Japan, Singapore and the US. Since 1998, Indonesia s oil production has declined, owing to its largest oil fields reached maturity and its inability to develop new comparable resources. Despite being a net importer of crude oil, since 2004 it has been the world s sixth-largest net exporter of natural gas and second-largest net exporter of coal. The Ministry of Energy and Mineral Resources (Kementerian Energi dan Sumber daya Mineral, MEMR) is the chief regulator of the electricity sector and is responsible for the legislation, implementation, co-ordination, enforcement and compliance of the electricity sector. Perusahaan Listrik Negara (PLN), a state-owned utility, is the dominant company in the power sector. It owns XX% of Indonesia's power-generating capacity through its subsidiaries and maintains a monopoly over Transmission and Distribution (T&D) activities. The remaining XX% is owned by the private sector through Independent Power Producers (IPP). This contribution of IPPs is likely to increase, as new private power projects are expected to come online in the next few years. The electrification ratio in Indonesia is currently XX% but is expected to increase owing to increasing private investments in the electricity infrastructure. 9

9 Introduction 2.1 GlobalData Report Guidance The executive summary captures the key growth trends in the power market. Chapter three provides a snapshot of the key parameters that impact the power sector, as well as key points about the power market. Chapter four provides an analysis of the power market. Chapter five details the regulatory control of the power market and the inward foreign investment scenario. Chapter six provides information on the cumulative installed capacity and annual generation trends, by individual generation source. Chapter seven describes the power T&D infrastructure and provides information on interconnectors with neighboring countries. The section also covers electricity imports and exports and upcoming grid-related projects. Chapter eight provides complete descriptions and SWOT analyses of the leading power generating companies. Note: All 2013 market numbers provided in the report are estimates, except where actual data were available. 10

10 Snapshot 3 Indonesia, Power Market, Snapshot 3.1 Indonesia, Power Market, Macro-economic Factors Indonesia s GDP (at constant prices) grew from $XX billion in 2000 to $XX billion in 2013 at a Compound Annual Growth Rate (CAGR) of XX%. The economy enjoyed steady growth from 2000 to 2007 but declined in 2008 in the wake of the global economic crisis. The annual growth rate declined by XX% in 2008, compared with an average annual growth rate of XX% between 2000 and The economy picked up in 2009 and continued to grow until 2012, at an average growth rate of XX%. However, it fell again in 2013 to a negative rate of XX% due to severe global economic uncertainty, a high current-account deficit, high inflation due to a rise in fuel prices, and sharp domestic currency depreciation. The economy is expected to continue declining in 2014 at a negative rate of XX%. To tackle the situation, the central bank raised bank interest rates significantly to bring the economy back on the path of growth. Indonesia also has major infrastructure development plans to drive economic growth. With contingency measures made by the government to attract increased investments, GDP (at constant prices) is expected to grow at a CAGR of XX% between 2014 and 2019 (IMF, 2014). The population has shown a very flat trend during the period under analysis, growing at a CAGR of XX% from XX million in 2000 to 277 million in This trend is expected to continue between 2014 and 2019, with the population expected to increase to XX million, at a CAGR of XX%. Electricity consumption increased from XX Terawatt hours (TWh) in 2000 to XX TWh in 2013, at a CAGR of XX%. This was due to an increase in demand from the industrial and services sectors. Consumption is expected to increase at a CAGR of XX% between 2014 and 2019, to reach XX TWh. 11

11 Snapshot Figure 1: Power Market, Indonesia, Gross Domestic Product ($bn) and Population (million), GDP ($bn) Population (million) GDP (constant prices) Population Source: GlobalData; IMF,

12 Market Analysis Electricity Consumption by Sector, 2013 The industrial sector was the single largest consumer of electricity in the power sector in 2013, accounting for an estimated XX% of electricity consumption. The residential and commercial sectors contributed an estimated XX% and XX%, respectively, to consumption, while all other sectors cumulatively contributed the remaining XX%. Figure 7: Power Market, Indonesia, Power Consumption by Sector (%), 2013 Other Commercial Industrial Source: GlobalData Residential Table 6: Power Market, Indonesia, Power Consumption by Sector (%), 2013 Sector Industrial Residential Commercial Other sectors Source: GlobalData Consumption 23

13 Appendix 9 Appendix 9.1 Market Definitions Power Power refers to the rate of production, transfer or energy use, usually related to electricity. It is measured in Watts (W) and often expressed in kilowatts (kw) or Megawatts (MW). It is also known as real power or active power Installed Capacity Installed capacity refers to the generator s nameplate capacity as stated by the manufacturer, or the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on a nameplate affixed to the generator Electricity Generation Electricity generation refers to the process of generating electricity from other forms of energy. It also refers to the amount of electricity produced, expressed in Gigawatt hours (GWh) Electricity Consumption Electricity consumption is the sum of electricity generated, plus imports, minus exports and transmission and distribution losses. It is measured in Gigawatt hours (GWh) Coal-Fired Power Plant A coal-fired power plant produced electricity from the combustion of coal Hydropower Plant A hydropower plant is a plant in which the turbine generators are driven by falling or flowing water Nuclear Power Nuclear power is the energy released from the fission of nuclear fuel in a reactor. 58

14 Appendix Renewable Energy Resources Renewable energy resources are those that provide energy that is naturally replenished but limited in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydro and wind are examples of renewable resources. 9.2 Abbreviations Table 22: Abbreviations BATAN National Atomic Energy Agency (Badan Tenaga Atom Nasional) CAGR Compound Annual Growth Rate CCGT Combined Cycle Gas Turbine Ckm Circuit kilometer FDI Foreign Direct Investment GDP Gross Domestic Product HVDC High Voltage Direct Current IPPs Independent Power Producers kv kilovolt MEMR Ministry of Energy and Mineral Resources (Kementerian Energi dan Sumber daya Mineral) MW Megawatt NCP National Coal Policy NGL PPA Power Purchase Agreement PLN Perusahaan Listrik Negara PV Photovoltaic RUKN National Electricity Generation (Rencana Umum Ketenagalistrikan Nasional) T&D Transmission and Distribution TWh Terawatt hours Source: GlobalData 59

15 Appendix 9.3 Bibliography Arnold W (2012). Coal slide poses broader risks for Indonesia. Reuters, September 11, Available from: [Accessed on June 25, 2014] BP (2013). BP Statistical Review of World Energy June BP. Available from: CIA (2013). Indonesia: the World Factbook. Central Intelligence Agency. Available from: [Accessed on June 25, 2014] GBG Indonesia (2013). Indonesia s Electricity and Power Generation Sector. Global Business Guide Indonesia. Available from: ration_sector.php [Accessed on June 25, 2014] HRW (2012). PLN report shows hydro growth potential in Indonesia. Hydro Review Worldwide. Available from: [Accessed on June 25, 2014] IESR (2012). Catalyzing Indonesian Civil Society Action to Deliver Sustainable Energy for All. Institute for Essential Services Reforms. Available from: [Accessed on June 25, 2014] IMF (2014). World Economic Outlook Database, April International Monetary Fund. Available at: [Accessed on June 25, 2014] Indonesia-Investments (2014a). Coal in Indonesia, Indonesia's Coal Production and Export. Indonesia-Investments. Available from: [Accessed on June 25, 2014] 60

16 Appendix Indonesia-Investments (2014b). Profile of Perusahaan Listrik Negara (PLN): Indonesia's Electricity Provider. Indonesia-Investments. Available from: [Accessed on June 25, 2014] OECD (2014). International investment stumbles into 2014 after ending 2013 flat. Organization for Economic Cooperation and Development. Available from: PI (2012). Indonesia and China Development Bank continue financial Corporation. Power Insider. Available from: [Accessed on June 24, 2014] PLN (2012) via China Securities Journal. Indonesia needs to solve power shortage for sustainable development. Perusahaan Listrik Negara. Available from: [Accessed on June 25, 2014] 9.4 GlobalData s Methodology GlobalData s dedicated research and analysis teams consist of experienced professionals with advanced statistical expertise and marketing, market research and consulting backgrounds in the energy industry. GlobalData adheres to the codes of practice of the Market Research Society ( and Strategic and Competitive Intelligence Professionals ( All of GlobalData s databases are continuously updated and revised. The following methodology has been followed for the collection and analysis of data presented in this report Coverage This report covers Indonesia s power market, examining the market structure and providing historical generation, capacity and consumption forecasts until It also looks at the market s regulatory structure, import and export trends, competitive landscape and leading active and upcoming power projects. 61

17 Appendix Secondary Research and Analysis The capacity, generation and consumption data are collected and validated using a number of secondary resources including, but not limited to: Government agencies, ministry websites, industry associations, the World Bank, IMF, and statistical databases Company websites, annual reports, financial reports, analyst reports and investor presentations Industry trade journals, market reports and other literature GlobalData s proprietary databases such as the Capacity and Generation Database, Power Plant Database and Transmission and Distribution Database Further to this, the following secondary information is collected and analyzed to project Indonesia s power market scenario to 2030, analyzing factors such as: Macro-economic scenario Government regulations, policies and targets Government and private sector investment Contract and deal announcements Utility expansion plans The sector s historic track record Other qualitative insights built through secondary research and analysis of company websites, annual reports, investor presentations, industry and trade journals, and data from industry associations Primary Research and Analysis Secondary research is further complemented through primary interviews with industry participants to verify the market numbers obtained through secondary research and obtain first-hand information on industry trends. 62

18 Appendix The participants are drawn from a diverse set of backgrounds, including power producers, equipment manufacturers, industry associations, government bodies, utilities, distributors, and academia. The participants include but are not limited to C-level executives, industry consultants, academic experts, business development and sales managers, purchasing managers, plant managers, government officials and industry spokespersons. 9.5 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. 63