Why does Indonesia import electricity from Malaysia?

Why does Indonesia import electricity from Malaysia?

JAKARTA, INDONESIA — Indonesia still imports electricity from Malaysia to fulfil its power needs.

Director-General of Electricity at Indonesia’s Ministry of Energy and Mineral Resources Rida Mulyana said that the electricity import ratio throughout last year reached 0.54 per cent, equal to 100-120 MW.

Which one is still imported?

Indonesia imports electricity from Malaysia’s state-owned enterprise SESCO to meet power needs in West Kalimantan.

Bisman Bhaktiar, an energy expert, told TOC that the import refers to the source of energy, adding that West Kalimantan has no fuel-based power plant so far.

“Indonesia has electricity oversupply between 15 and 20 per cent. Why do we still import? It is related to the electricity network that transmits the electricity and just like what happens in West Kalimantan,” he stated.

Electricity import can have two principles: Energy security and business. As long as a country sells at a higher price and buys at a lower price, nothing’s wrong with the import, Bisman said.

Indonesia is trying to reach 100 per cent of the electrification ratio given the government’s claims that 98.05 per cent of Indonesian households has access to electricity.

“The question is whether the power is distributed evenly, as many remote areas do not yet have access to electricity yet due to infrastructure constraints,” Bisman claimed.

Renewable energy-based power is still expensive

The realization of the government’s 35,000 MW electricity project has only reached 24 per cent so far.

Energy and Mineral Resources Minister Arifin Tasrif claimed that at the end of 2019 the capacity of operating power plant hit 6,916 MW, Kontan reported.

As Indonesia is trying to develop renewable energy sources, Ucok Sigalingging, an oil and gas consultant in Balikpapan, suggested that Indonesia can focus on developing gas-powered power plants as gas power plants contribute to 20 per cent of Indonesia’s fuel needs.

“Gas power plants are more realistic plans than renewable energy (EBT) today,” he said.

Bisman also stressed that renewable energy sources are still expensive in Indonesia, meaning that the government’s incentive is necessary.

Intensive research and development are also vital in boosting the development of renewable energy.

Herman Agustiawan, Chief Executive Officer Deputy at Andritz Hydro, admitted that the investment cost can halt hydropower plant development.

However, it only happens in the early stages.

If a project runs, the management cost will be smaller than expected. The application of technology is not the main factor that boosts hydropower plant cost, given that technology only accounts for 20 and 30 per cent of the total investment.

“The development of infrastructure, such as roads, airports, and logistics issue (such as the shipment of equipment) still poses a problem. Therefore, that factor makes the investment cost to skyrocket,” Herman stated, as cited in Dunia Energi.

Oil target

Given that the power issue cannot be separated from the oil sector, Ucok stated that the government’s target to reach 1 million barrel of oil per day may have two meanings.

“The target can be realistic if there are exploration activities. However, suppose that we rely on the existing reserve without any exploration activities. In that case, it is unlikely to reach such a target,” the former Chevron engineer stated, adding that the exploration can take around six years.

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) aims to drill 616 development wells this year, up 156 per cent compared to the drilling in 2020 (240 wells).

The SKK Migas warned that Indonesia’s oil reserve could last for 15 years while the energy ministry raised concerns over the possibility of the oil reserve only lasting for nine years.

“Both can be correct based on the geological analysis. The accuracy is around 60 per cent, meaning that the remaining 30 per cent can be inaccurate,” Ucok wrapped up the interview.

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