Foreword

 Until now the condition of electric energy procurement in some sub-system of national electricity is still deficit, during 2008, turn off often occurred in all coverage of PLN services, including in the Java Bali interconnection system, which was reported in normal condition. It is predicted that without additional power, in 2008, Java Bali Interconnection System would be hit by the crisis when the power reserve was only about 27%. If it is only relying on the additional power from the on-going and committed project, in 2010P, the power reserve is predicted about 14%. While the proper minimum power reserve of the electricity system reliability is about 30% up to 40%. Likewise, the Sumatera Interconnection System, without additional power from the new generator, in 2008, the power reserve would only about 14%.

The crisis condition would still continue if the 44 IPP projects that has working contract, could not be realized, such as 24 partnership project lots (1,100 MW), 16 electricity crisis tackling projects lots (776 MW), and 4 Infrastructure Summit project lots (RUPTL 2006-2015/changes).

Since the beginning of the 90's, the government and PLN have opened opportunities for the private sectors to participate in the development of national electricity infrastructure. But the ratio of success for some IPP projects, either for Generation I (1992-1998 periods) or for Generation II (2005-2008 period) was still considered low.

PT PLN (Persero) as the executor and the coordinator of Acceleration Program of Coal Powered Steam Electric Generator (PLTU) 10,000 MW (Crash Program), has a purpose of fulfilling the high growth of electric energy needs, energy diversification that impacted on the saving of production prime cost, and as a replacement of retired and unproductive electric generators. All coal PLTU in the project packages has total capacity of 9,475 MW, covering 40 project locations all over Indonesia, consisted of 10 locations in Java with capacity of 7,460 MW, and 30 locations outside Java with capacity of 2,513 MW.

The level of electric energy in the next decade is averagely 9.7% (RUPTL 2009-2018), while the additional power from some crash program generators are expected to be entirely absorbed by the end of 2011.

To secure the electric energy supply until 2018, there should be additional power about 57,500 MW or 5,750 MW per year. In 2009, it is planned some new generator projects, 35.3 GW would be build by PLN and the other 22.2 GW would be given to the IPP. During the next ten years, IPP is directed to be more beneficial when the contribution reaches 40% of the total national electric energy supply.

It seems that during the next ten years (2009-2018), there is a business opportunity and investment in electricity in Indonesia that would reach a total value of US$ 83.69 billion, covering the generator needs of US$56.57 billion, transmission US$ 14.10 billion, and distribution US$ 12.38 billion.

Towards the end of 2008, the government has determined phase II electricity project program of 10,000 MW with total capacity of 10,126 MW, which

some of the generator with capacity of 5,394 MW would be developed by PLN, and the other 4,732 MW by the Independent Power Producer (IPP).

By discussing the national electricity issues, including the progress of 10,000 MW project phase I and II, and the other electricity infrastructure development projects, enriched with the prospect of coal and geothermal resources in Indonesia, as well as the acceleration of the implementation of the energy diversification policy, made this study book very useful for the electricity business players, including PLN, and other involved corporations, as well as domestic and international financing institutions.

This study is prepared as thick as 400 pages, we offered at Rp 5,500,000 (Five million five hundred thousand Rupiah) per copy for the Indonesian version, or at US$ 800 (Eight hundred US Dollar) per copy for the English version. The interested party could directly contact PT Media Data Riset through telephone number 021-8093140, mobile phone: 085217061945 or through e-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it / This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Table of Content

I.  INTRODUCTION

II. PERFORMANCE OF NATIONAL ELECTRICITY SYSTEM

    2.1. Portrait of National Electricity System 1966-2008

         2.1.1. RE per Province Status December 2008

                2.1.1.1. RE Electrified Village Status December 2008

         2.1.2. Development of National Electricity Infrastructure 2008

                2.1.2.1. Condition of Electric Energy Procurement and Supply as of

                            2008  

    2.2. Chain Link of National Electric Energy Supply

    2.3. Energy Management and National Electricity Crisis

         2.3.1. Role of ESDM in National Development

         2.3.2. Ground Rule and Policy of Energy in Indonesia

                2.3.2.1. Ground Rule of National Energy Management

                2.3.2.2. Framework of National Energy Management Policy

                2.3.2.3. Development of National Energy Policy

                2.3.2.4. National Energy Policy (Based on UU Energy No.30 Year

                            2007)
    
                2.3.2.5. Inpres No.2/ 2008 About Energy and water conservation

                            (Revised of Inpres No.10 about Energy Conservation)

         2.3.3. General Description of Energy in Indonesia

                2.3.3.1. Reserve and Production of Fossil Energy 2008

                2.3.3.2. Concave of Hydrocarbon in Indonesia

                2.3.3.3. Optimizing Crude Oil Production 1950-2030 (Method of

                            M King Hubert)

                2.3.3.4. Reserve and Production of Non-Fossil Energy 2008

         2.3.4. Coal Resource and Terminal

                2.3.4.1. Coal Concave and CBM Indonesia

                2.3.4.2. Coal Liquefaction Location Plan

         2.3.5. Potency of National Geothermal

                2.3.5.1. Geothermal Development Area 2008

         2.3.6. Energy Needs of Indonesia

                2.3.6.1. Energy Diversification Program

III.  NATIONAL ELECTRICITY INFRASTRUCTURE

      3.1. Installed Capacities of National Generator 2007-2008

           3.1.1. Power Capacity based on the Generator (PLN) 2003-2008

           3.1.2. Capable Power based on the Generator (PLN) 1999-2007

           3.1.3. Total Unit of Generator (PLN) 1999-2007

           3.1.4. Load Factor, Capacity, and Electric Energy Demand Factor

                    1999-2007

           3.1.5. Primary Energy Utilization for Generator 1999-2007

                  3.1.5.1. Unit Price of Primary Energy for Generator 1999-2007

      3.2. Composition of Generator based on Primary Energy 2007-2008

      3.3. Target of Primary Energy Utilization for Generator 2007-2008

IV.   NATIONAL ELECTRICITY PERFORMANCE

      4.1. Production & Consumption of National Electricity Energy 2002-2007

           4.1.1. Production of Electric Energy based on Generator 2002-2007

           4.1.2. Production and Purchase of Electric Energy 2003-2007

                  4.1.2.1.    Production and Purchase of Electric Energy Based on

                                 Generator 1999-2007

           4.1.3. Growth and Composition of Electric Energy Sales 2003-2008
 
                  4.1.3.1. Sales of Electric Energy per voltage type 1999-2007

           4.1.4. National Electric Consumption based on Tariff Group

                    1999-2007

                  4.1.4.1. Electric Consumption per Area based on Tariff Group

                              2007

      4.2. Electrification Ratio per Province 1980-2007

      4.3. Electrified Village Ratio per Province 2006-2007

           4.3.1. Rural Electric Program (Financing Source APBN)

           4.3.2. Rural Electric Program Plan 2009 (Financing Source APBN)

V.   NATIONAL ELECTRIC POWER POLICY

     5.1. Tariff Policy

     5.2. Primary Energy Utilization Policy

     5.3. Rural and Social Electric Treatment

     5.4. Standardization, Security, Safety, and Control

     5.6. Electric Power Demand and Supply Management

     5.7. Integrated Resource Planning Program

VI.  NATIONAL ELECTRICITY CRISIS

     6.1. Condition of National Electric Energy Supply 2007-2008
 
     6.2. Phenomena of National Electric Crisis 2007-2008

     6.3. Deficit of 8 National Electricity Sub System as of October 2008

     6.4. The Effort to Suppress the National Electricity Crisis

          6.4.1. Mega Project of National Electricity worth US$208 billion

     6.5. Electric Energy Needs Growth 2009-2018

          6.5.1. Peak Load and Electric Sales 2008-2018

          6.5.2. National Generator Development Plan 2009-2018

          6.5.3. Projection of Additional Power based on Generator Specification until 2018

     6.6. Government, PLN, and 10.000 MW Electricity Project Phase I and II

          6.6.1. IPP Procurement

                 6.6.1.1. Private Electric Purchase Mechanism

                 6.6.1.2. Electricity Purchase Price Guidance (Permen ESDM No.

                             5/2009 About Electricity Purchase Guidance

                             by PLN from cooperative or other corporation)

                 6.6.1.3. Determination of Electric Purchase Price of PT PLN

                             (Persero)

     6.7. rospect, Strategy, and policy of PLN

          6.7.1. Business Prospect

                 6.7.1.1. Marketing

                 6.7.1.2. Target

                 6.7.1.3. Strategy

                 6.7.1.4. Policy

     6.8.   PLN Performance Achievement 2008

VII. NATIONAL ELECTRICITY PROJECT

     7.1. 10.000 MW Coal PLTU acceleration development project

          7.1.1. Rationale and Ground Rule

                 7.1.1.1. The Purpose of 10,000 MW Coal PLTU development

                 7.1.1.2. Investment Fund Needs for Crash Program project

                 7.1.1.3. Regulation Support

                 7.1.1.4. Coal PLTU project Location determination

          7.1.2. Acceleration of Crash Program project

                 7.1.2.1. Progress Status of 10 Coal PLTU Projects in Java

                 7.1.2.2. Physical Progress of Nine PLTU Projects in Java as off

                             June 2009

                 7.1.2.3. Progress Status of 25 PLTU Projects outside Java as of

                             June 2009

                 7.1.2.4. Physical Progress of 22 PLTU Projects Outside Java as of

                             June 2009

                 7.1.2.5. Coal Contracts of 10 PLTU in Java 2009-2011.

                 7.1.2.6. Recalculation of Project value of 10,000 MW Coal PLTU

                 7.1.2.7. Government, PLN, and Escalation of Crash Program

                              project value

                 7.1.2.8. EPC Contracts of 7 PLTU Projects Outside Java worth

                             Rp 2.31 Trillion.

                 7.1.2.9. Local Bank disbursed US$288.56 million for PLTU Labuan

                 7.1.2.10.EPC Contracts of two PLTU Crash Program Projects

                 7.1.2.11.WIKA work on eight Coal PLTU Projects worth

                              Rp2,3 Trillion

                 7.1.2.12.Dongfang, China Huadian, and PLTU Tanjung Kasam

          7.1.3. Progress of Realization of Private Electric Project (IPP)

                   Generation I & II (1992-2009)

                 7.1.3.1. Success Ratio of IPP Project Generation I & II.

                 7.1.3.2. Signing of 23 PPA for Electric Crisis Area 2007

                 7.1.3.3. 40 IPP New Location Projects 2007

                 7.1.3.4. 14 IPP Projects in construction phase as of December

                             2008

                 7.1.3.5. 30 Private Electric Projects in financing phase as of

                             December 2008

                 7.1.3.6. IPP Project per area based on Generator Status January

                             2009.

                 7.1.3.7. 16 IPP Projects in Operational phase based on generator

                             as of January 2009

                 7.1.3.8. 16 IPP Projects in development phase based on generator

                             as of January 2009

                 7.1.3.9. 28 IPP Projects in financing phase based on generator as

                             of January 2009

                 7.1.3.10.Bank Mandiri financed Petrogres Electric generator worth

                          US$61 million

                 7.1.3.11.Sengkang Energy Invested US$136 million

                 7.1.3.12.Monnet Ispat & Energy Ltd built PLTU MT US$1 billion   

     7.2. Challenge & Business Opportunity of Private Electricity in Indonesia

           2009-2018

          7.2.1. Performance of IPP Projects Indonesia as of April 2009.

                 7.2.1.1. 27 IPP Projects in Java Bali based on generator until

                             2018 (Plan)

                 7.2.1.2. 65 IPP Projects IPP outside Java based on generator until

                             2018

          7.2.2. Role of IPP in National Electricity Projects 2008-2018

                 7.2.2.1. Investment Fund needs for IPP Projects 2008-2018

     7.3. Progress of 10,000 MW Electricity Project Phase II (2nd Fast Track

           Program)

          7.3.1. 18 Project Locations of second Fast Track Program in Jamali

                    based on generator

                 7.3.1.1. 62 Project locations outside Java based on generator

          7.3.2. Development of 2nd Fast Track Program plan as of April 2009

                 7.3.2.1. Power Capacity of PLN Generator Projects (2nd Fast

                             Track)

                 7.3.2.2. Power Capacity of IPP Generator Projects (2nd Fast

                             Track)

                 7.3.2.3. 23 IPP Project Location in Java based on generator (2nd

                             Fast Track)

                 7.3.2.4. 31 IPP Projects outside Java per Area based on generator

                 7.3.2.5. 2nd Fast Track Tender project plan worth US$17.3 billion

                 7.3.2.6. Tender Project PLTU Pemalang worth US$2.57 billion.

                 7.3.2.7. Pertamina GE & six PLTP Projects worth US$200 million.

VIII. NATIONAL ELECTRICITY INFRASTRUCTURE DEVELOPMENT PROJECTS

      8.1. Electric Energy Procurement Investment Mechanism

           8.1.1. National Electricity Investment Expense Needs

                  8.1.1.1. Fund needs for 2nd Fast track realization

                  8.1.1.2. Estimation of National Electricity Infrastructure

                              Investment Project Expense, 2009-2018

                  8.1.2.3. Projection National Electricity Infrastructure Investment

                              Project Expense until 2007

           8.1.2. The Effort to Minimize the National Electricity Investment Risk

      8.2. Government, PLN, and 10,000 MW Coal PLTU Projects Financing

            (Seek Fund to China)

           8.2.1. The Role of China banking and Coal PLTU Projects Financing in

                    Java

                  8.2.1.1. Cexim Prepared to Finance 4 Coal PLTU Projects in Java

                  8.2.1.2. The end of 2008, PLN still needs Crash Program Project

                               Realization Fund

                  8.2.1.3. February 2009, Cexim disbursed Paiton and Suralaya

                              projects fund of US$90 million

                  8.2.1.4. Domestic Bank disbursed US$288.56 million for PLTU

                              Labuan

                  8.2.1.5. China and Europe Banking injected fund of

                              US$400 million

           8.2.2. PLN Projects needs fund of US$6 billion

           8.2.3. PLN and Bond issuance 2008

IX. DEVELOPMENT OF TRANSMISSION AND DISTRIBUTION OF NATIONAL ELECTRIC ENERGY

    9.1. Condition of Transmission and Distribution of National Electricity

         9.1.1. Transmission development 2006-2010

                9.1.1.1. Main Relay Station development

         9.1.2. Distribution System development

X.  PRIMARY ENERGY

    10.1. Spreading of wealth and Prospect of Coal in Indonesia 2008

    10.2. Spreading of wealth and Prospect of Geothermal in Indonesia 2008    
 
XI. PROGRAM AND PROJECTION OF NATIONAL ELECTRICITY INFRASTRUCTURE DEVELOPMENT

    11.1. Program of National Electricity Infrastructure Development 2009

    11.2. Projection of additional generator 2009-2010

    11.3. Projection of National Electric Energy Needs 2009-2010

    11.4. Projection of National Electric Energy Needs 2008-2027 (According to

            RUKN 2008-2027)

XII.PROSPECT AND CONCLUSION

- Attachment
 
  UU No.30 Year 2007 About Energy