December 23, 2020 Read More →

Pandemic, strained finances creates crisis for Indonesian power demand

The Jakarta Post ($):

The COVID-19 pandemic hit the global energy market, including Indonesia, this year, as industry players were pressured by low demand due to virus containment measures.

Domestic demand for fuel, gas and electricity began declining in late March, as Indonesia announced its first COVID-19 case earlier that month. President Joko “Jokowi” Widodo then instructed people to work and study from home after a rise in virus cases. 

However, it was in April that energy demand plummeted to historic lows as regional administrations, led by Jakarta, enacted large-scale social restrictions (PSBB) to contain the escalating pandemic. All but several strategic industries, such as food, finance and medicine, were forced to shut down. 

The Institute for Energy Economics and Financial Analysis (IEEFA) warned that the continued strain would hamper PLN’s ability to adopt renewable energy, electrify isolated regions and become independent of the state budget.

“PLN’s quiet crisis reflects dysfunctional planning and governance that have put the company into strategic paralysis, unable to change direction or adapt to new market realities,” said IEEFA analyst Elrika Hamdi.

[Norman Harsono]

More: Yearender 2020: Indonesian energy demand collapses to record lows

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