JAKARTA (Reuters) – Indonesia’s President Prabowo Subianto has decided not to change the state power utility’s monopoly on the electricity market despite calls for liberalisation to encourage renewable energy investment, a close adviser said on Wednesday.
Hashim Djojohadikusumo, the president’s brother and adviser, said Prabowo has decided not to change PLN’s monopoly despite requests from some conglomerates.
“The government continues to believe that the state must be in control, so the role of PLN must remain … As long as he (Prabowo) is president, the state remains the controller,” Hashim told an economic forum.
A proposal to break up the monopoly of state-run Perusahaan Listrik Negara (PLN) was considered during last year’s election campaign, to accelerate the adoption of renewables.
Some lawmakers also included a proposal for “power wheeling” – allowing renewable producers to wheel electricity onto PLN’s grid and to sell directly to customers – in a draft bill on renewable energy that parliament had yet to discuss in depth.
PLN is currently the sole seller to most customers, managing power plants and also buying from independent producers.
“If we open up the market, not that we’re anti foreigners, we welcome foreigners, but power wheeling … could turn this into the Wild West and our electricity sector will be dominated by non-Indonesians,” Hashim said.
The decision should not deter foreign investment, Hashim added, citing interest from renewable companies from Qatar and Abu Dhabi.
Some companies see renewables investment in Indonesia as unattractive due to competition with cheaper coal power and they have to wait for purchase from PLN as the only buyer, analysts have said. They argued allowing direct sales from independent producers to customers willing to pay more could spur investment.
Indonesia has pledged to phase out coal-fired power plants. It wants to increase the share of renewable energy over the next 10 years by adding more solar, hydro and geothermal capacity, according to PLN’s power supply plan which is still being finalized.
(Reporting by Stefanno Sulaiman; Writing by Gayatri Suroyo; Editing by Kim Coghill)
