Indonesia’s technical hydropower potential is estimated at around 75,000 MW, with untapped resources concentrated on the islands of Sumatra, Java and Sulawesi. It is estimated that there is currently about 8 GW of economically viable undeveloped hydropower potential, which would provide almost 33 TWh of electricity per year.
Nonetheless, the development of renewable technologies, including hydropower, remains stalled in the country. The Indonesian government’s current strategy is to emphasise coal and gas in the energy supply mix to focus on reducing both the cost of electricity production and the country’s current reliance on subsidised oil.
The electricity sector in Indonesia is dominated by the state-owned utility, PT Perusahaan Listrik Negara (PLN), which controls 74 per cent of the country’s 46 GW of installed electricity capacity, as well as the transmission and distribution infrastructure.
The involvement of independent power producers is regulated in accordance with the 2009 Electricity Law, which maintains PLN’s exclusive rights over the transmission, distribution and selling of electricity.
Total energy demand in Indonesia is expected to increase by 8.7 per cent each year up to 2024. According to PLN’s strategic plan (RUPTL), new capacity in the country will be delivered largely through new coal-fired stations (7.23 GW), gas installations (4 GW) and combined-cycle plant (6.3 GW). The plan also includes a proposed 1 GW of new hydropower capacity.
Hydropower development will be driven in part by the government’s target to increase the share of renewables in the country’s total energy use to 23 per cent by 2025; the figure is around 5.87 per cent for 2015. Nonetheless, investment in renewable technologies has been deterred by both subsidised fuel prices and a complex, rapidly changing legal and regulatory environment.
Despite these challenges, seven hydropower stations totalling 1,559 MW are currently under construction in the country. A further ten projects totalling 1,819 MW are subject to power purchase agreement (PPA) negotiations, while 19 projects totalling 2,131 MW are in the study or design phase.
The largest project currently under construction is the 1,040 MW Upper Cisokan plant, a pumped storage project located in western Java. The project is being built by South Korea’s Daelim and Italy’s Astaldi Group, in a joint venture with an Indonesian firm, Wika. The total project cost is estimated at USD 800 million, and will be supported by a USD 640 million specific investment loan from the World Bank.
According to the World Bank, the goal of this project is to increase the peaking capacity of the Java-Bali grid in an environmentally and socially sustainable way, while strengthening PLN’s institutional capacity to oversee hydropower planning, development and operations.
Indonesia is also now importing hydropower to the West Kalimantan province in Borneo, from the neighbouring state of Sarawak in Malaysia. A 275 kV transmission connection linking the two countries’ grids in Borneo was completed in January 2016, and imports from Malaysia are expected to reach 50 MW by the end of March 2016. 2015 saw Sarawak Energy Berhad commission the final three turbines at the 944 MW Murum dam.
This country profile is featured in the 2016 Hydropower Status Report. You can download the full report here.
This profile was last updated in May 2016.