BRINGING POWER INTO THE NATION ANDTHE WORLD

The Role of Private Sector

in Fulfilling the Demand of Electricity for Industry
By N. Hasto Kristiyono
President Director & CEO PT Sumberdaya Sewatama
The 69
th
National Electricity Day Event Series : Electricity for Prosperity
October 1
st
3
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, 2014 Jakarta Convention Center
BRINGING POWER INTO THE NATION ANDTHE WORLD
Strong National Resilience to Compete Globally
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2000
2013
Need to Generate
More Power
BRINGING POWER INTO THE NATION ANDTHE WORLD
Industrial Electricity Supply / Demand Situation
Taxonomy of Electricity Sector Provision
UUD 1945
Pasal 33 Ayat 2 &3
UUD 1945
Pasal 33 Ayat 2 &3
Definitive
Regulation
Definitive
Regulation
UU No. 15/1985 replaced with;
UU No. 9/2009 on Electricity
Provision
ELECTRICITY
SUPPLY
Generation
Transmission & System Operation
Distribution
IPPs Self-Generation Co-operatives
PPA
Growth 3%-5%
UU No. 30/2007 on Energy
UU No. 30/2007 on Nuclear
UU No. 30/2007 on Oil & Gas
UU No. 30/2007 on Geothermal
UU No. 30/2007 on Hydro Resources
SU No. 30/2007 on Coal & Mineral
Regulation on
Energy Upstream
Regulation on
Energy Upstream
Private Sector
Strong Electricity Demand on Industry
+
Global / Regional
Economics Drivers
Global / Regional
Economics Drivers
ELECTRICITY
DEMAND
C
U
S
T
O
M
E
R
S
Industrial - Continuous
Business / Commercial - Base load
Captive Power - Backup
SAIDI / SAIFI Cost of Electricity
Growth 9%-10%
Performance
Source: RUPTL & PLN Statistic
+
BRINGING POWER INTO THE NATION ANDTHE WORLD
BRINGING POWER INTO THE NATION AND THE WORLD
Lack of Electricity Infrastructure Development
Land acquisition
Source of financing and/or Government Guarantee
Tariff acceptance reliance on subsidy
Primary Energy location gap, vis-a-vis archipelago nature of the
country
Low reliability of product & technology selected based on initial cost
Local Government Autonomy vs Capacity
Bureaucracy pitfall - Form Over Substance
KEY EXISTING CHALLENGES
T&D Development Realization FTP Project Progress
+
MW %
Initial target 2009
(100%)
Source: PLN presentation Source: PLN statistic
Needs balancer and/or complement to Public Utility player
BRINGING POWER INTO THE NATION ANDTHE WORLD
BRINGING POWER INTO THE NATION AND THE WORLD
Private Sector/Player Characteristics and Differentiators
Regulatory Compliance
Project Development approach
Environmental and Social Responsibility
Form of accountability and degree of closeness
to shareholders
Speed of decision making
Flexibility of solution approach Substance over
Form
Risk appetite business oriented investment
process
Speed of project execution
Adoption of Proven Technology
General Characteristics
Differentiators from Public player
BRINGING POWER INTO THE NATION ANDTHE WORLD
Longer term Sustainable Solution Medium term Power Solution
Meeting Indonesias Electricity Needs
Role of Private Sector in Fulfilling the Demand
Being a credible complement to Public Utility in covering the entire country geographical regions with
Imbalances in regional development & substandard electricity support
As a bridging process to close the supply and
demand gap Temporary Power Solution
Relevant
Rapid
Proven
Reliable
Fill-Gap Short term Power Solution
Some relevant solutions for Industrial Customers:
Optimizing existing assets
Operations & Maintenance
Supply and Demand Side Management
Energy Efficiency & Optimization
Thermal Power Solution
Renewable Power Solution
Key Success Factor /Supports needed by Private Sector in Accelerating
Electricity Development
A clear division of authority in the governance and provision of electricity in Indonesia
Licensing / permit issues (central vs. central government)
Robust but Nimble cooperation framework and Speedy bureaucracy culture in the
implementation of process
Support/Endorsement towards the creation of integrated sustainable power solutions
A change in mindset towards Proven Technology (procurement process)
Acceleration in Power Wheeling rule to encourage the smoothness of alih wilayah usaha
BRINGING POWER INTO THE NATION ANDTHE WORLD
Thank You