Subsidy may exceed Rp 100 trillion next year

JAKARTA. The electricity subsidy in 2013 may reach Rp 100.33 trillion (US$10.61 billion), jumping 54.6 percent from Rp 64.9 trillion this year if there is no price hike, a senior official said.

The Energy and Mineral Resources Ministry’s director general for electricity, Jarman, said the power production cost next was predicted to be Rp 1,403.9 per kilowatt-hour (kWh) with 180,611 gigawatt-hours (GWh) of electricity expected to be sold.

“Those numbers come with the assumption that the Indonesian Crude Price [ICP] is $120 per barrel and the demand growth hits 8 percent,” he told House of Representatives Commission VII overseeing energy at a hearing in Jakarta on Tuesday.

However, if the House agreed with the government proposal to increase the basic rate by 10 percent on average starting Jan. 1 next year, the subsidy could be cut to Rp 77.833 trillion, assuming that the ICP is $100 per barrel and the growth was 9 percent, Jarman said.

“With growth of 9 percent, we expect to sell 182,283 GWh of power,” he added.

During the hearing, Energy and Mineral Resources Minister Jero Wacik said that next year Indonesia’s energy mix for electricity generation, which includes state power company PT Perusahaan Listrik Negara (PLN) and independent power producers (IPP), would be dominated by coal.

“The contribution of coal will reach 56.66 percent, followed by natural gas at 22.12 percent, oil-based fuels at 9.7 percent, hydro at 6.19 percent, geothermal 4.8 percent and other renewable sources at 0.52 percent,” he said.

He said that continued efficiency in PLN operations through reducing the utilization of oil-based fuels was among priorities which the ministry would closely supervise. He claimed the government would fully back plans to develop renewable energy sources for electricity production.

“The efficiency policy has run well in the past several years. In 2008, the consumption of oil based-fuels in our energy mix was still 36 percent, but now in 2012, we intend to press the percentage to 13.83 percent only,” Jero explained.

This year, in addition to oil-based fuels, coal utilization in the energy mix is expected to reach 51.40 percent, followed by gas at 23.18 percent, hydro 6.8 percent, geothermal 4.79 percent and renewable energy at 0.52 percent.

As for the sales margin for PLN, the government and the House agreed to set it at 7 percent in 2013, the same amount as in 2012, with the total value of between Rp 14.63 trillion or Rp 15.27 trillion assuming that the ICP level stands between $100 and $120 per barrel.

Jero said that the margin would support PLN’s investment plan totaling Rp 64.3 trillion next year. The investments comprised Rp 34.3 trillion for building new power plants, Rp 17.7 trillion for setting up new power houses and transmission lines and Rp 12.3 trillion for strengthening power distribution. (Rangga D. Fadillah/ The Jakarta Post)