Indonesia Power Report Q3 2008

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The new Indonesia Power Report from BMI forecasts that the country will account for 2.08% of Asia Pacific regional power generation by 2012, with an increasing generation shortfall that provides a growing import requirement. BMI’s Asia Pacific power generation estimate for 2007 is 6,865 terawatt hours (twh), representing an increase of 9.6% over the previous year. We are forecasting an increase in regional generation to 9,370twh by 2012, representing a rise of 36.5%. Asia Pacific thermal power generation in 2007 is estimated by BMI at 5,431twh, accounting for 79.1% of the total electricity supplied in the region.

Our forecast for 2012 is 7,104twh, implying 46.6% growth that reduces the market share of thermal generation to 75.8% – thanks partly to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Indonesia’s thermal generation in 2007 was 135twh, or 2.49% of the regional total. By 2012, the country is expected to account for 2.52% of thermal generation. For Indonesia, oil is the dominant fuel, accounting for 47.5% of 2007 primary energy demand (PED), followed by gas at 26.5%, coal at 24.3% and hydro with a 1.7% share of PED. Regional energy demand is forecast to reach 4,830mn tonnes of oil equivalent (toe) by 2012, representing 37.3% growth over the period.

Indonesia’s 2007 market share of 3.10% is set to fall to 2.98% by 2012. Indonesia is moving ahead slowly with controversial plans to build its first nuclear power plant, which could be operational by 2017. Indonesia is now ranked sixth, just behind Malaysia in BMI’s updated Power Business Environment rating, reflecting to its low level of energy import dependence and healthy power consumption growth prospects. Several country risk factors offset some of the industry strength, and the country may struggle to keep Philippines and Thailand at bay over the longer term. BMI is now forecasting Indonesian real GDP growth averaging 5.83% per annum between 2007 and 2012, with a 2008 forecast of 6.10%. Population is expected to expand from 231.6mn to 245.3mn over the period, with GDP per capita and electricity consumption per capita both forecast to increase significantly.

The country’s power consumption is expected to increase from 173twh in 2007 to 282twh by the end of the forecast period, leaving a shortfall in generation rising from an estimated 26twh in 2007 to 87twh in 2012, assuming 7.1% annual growth in generating capacity. Between 2007 and 2018, we are forecasting an increase in Indonesian electricity generation of 90.7%, which is among the highest for the Asia Pacific region. This equates to 35.1% in the 2013-2018 period, up from 32.6% in 2007-12. PED growth is set to fall from 25.8% in 2007-12 to 24.0%, representing 63.8% for the entire forecast period. An increase of 168% in hydro-power use during 2007-18 is a key element of generation growth. Thermal power generation is forecast to rise by 88% between 2007 and 2018. More details of the long-term BMI power forecasts can be found in the appendix of this report.

Author:
Mike King