35,000 MW: A Light for the Nation has been saved
35,000 MW: A Light for the Nation
A publication by Deloitte Indonesia’s Infrastructure and Capital Project team
Indonesia, as one of the biggest coal producers in the world, is facing an issue with electricity. Currently the installed capacity is only able to fulfill 86.39% of electricity demand, lower than Singapore (100%), Brunei (99.7%), Thailand (99.3%), Malaysia (99.0%), and Vietnam (98.0%). With the aim of achieving upper middle income country status by 2025, Indonesia must shift its focus from consumption to be more productive by encouraging industrialization. Aligned with this goal, electricity becomes a crucial tool as an economic growth engine.
Based on industry estimates, existing Indonesian coal reserves, at current prices, will only be sufficient to power Indonesia’s electricity requirements for the next 18 to 20 years. Energy diversification into the clean-renewable sector is one of the solutions to tackle this issue. Some of renewable energies that need to be considered and have potential in Indonesia are solar energy, wind energy, biomass from palm oil, and geothermal. However further study and research is needed to assess the economic feasibility of proven technologies. Strong support and clear direction from the government are key drivers to promote clean and renewable energy in Indonesia.
This publication serves as summary of our discussion with all power stakeholders, such as Ministry of Energy and Mineral Resources, PLN, industry players and investors. It discussed the challenges and key actions to accelerate the development of 35,000MW program. Through this publication, Deloitte aims to bridge the interest of all parties in Indonesia’s power industry.