March 5, 2020 / 10:10 AM / 4 months ago

Indonesia's PLN "burdened" by electricity oversupply- official

* Indonesia’s electricity consumption lower than expected

* PLN should focus on transmission and distribution- official

* PLN to invest $6.36 bln in capex this year- PLN CEO

By Wilda Asmarini

JAKARTA, March 5 (Reuters) - Indonesia’s state electricity company, Perusahaan Listrik Negara (PLN), is at risk of producing more power than needed as new plants start up and demand grows more slowly than expected, the electricity ministry said on late on Wednesday.

Indonesia’s electricity demand grew just 3.8% year-on-year in January, and growth of 4.5% in 2019 was below the government target of 6.3%, Rida Mulyana, the energy ministry’s director general told reporters.

“On the other hand, there are some new power plant projects that are underway, so it becomes an issue,” Mulyana told reporters.

“There will be an oversupply of power which will burden PLN’s financials,” he added.

Indonesia is 98.9% electrified and aims to reach 100% this year, energy and mineral resources minister Arifin Tasrif said on Wednesday.

Indonesia, the fourth most populous country in the world, had plans for 35 gigawatts of new power to come online by 2019 but delayed its target to 2029 amid investor doubts.

Mulyana said that the archipelago’s Java and Bali islands could be over-supplied by up to 41.5% this year while Halmahera island is estimated to be over-supplied by 202%.

The government is helping PLN to find new growth areas such as smelter projects that could need between 5-6 gigawatts of electricity.

Other new markets include special economic zones, industrial areas as well as new tourism regions that have potential to absorb 16 gigawatts, Mulyana said.

“Besides that, we also urge PLN to invest more in transmission and distribution networks, instead of power plants, so they can reach more markets,” he said.

PLN’s CEO Zulkifli Zaini said on Tuesday that it plans to raise 90 trillion rupiah ($6.36 billion) in capital spending this year through bank loans and bonds.

He said that most of this investment will be used to build transmission and distribution lines and some power plants, but did not elaborate on other details. ($1 = 14,160.0000 rupiah) (Reporting by Wilda Asmarini; writing by Fathin Ungku in Singapore; Editing by Simon Cameron-Moore)

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