Thursday, 18 Safar 1441 / 17 October 2019

Thursday, 18 Safar 1441 / 17 October 2019

Non-subsidized electricity tariff can be raised: Minister

Senin 29 Jan 2018 19:02 WIB

Red: Reiny Dwinanda

ESDM Ministry says non-subsidised electricity tariff can be raised. (Illustration)

ESDM Ministry says non-subsidised electricity tariff can be raised. (Illustration)

Foto: Republika/Agung Supriyanto
Govt to formulate new tariff if there're factors that affect electricity sale prices.

REPUBLIKA.CO.ID, JAKARTA -- The non-subsidized power rate can be raised based on the adjusted formulation to be issued, according to the Energy and Mineral Resources (ESDM) Ministry. Electricity Director General of ESDM Andy Noorsaman Someng noted in Jakarta on Monday that the government will formulate a new price if there are factors that affect the electricity sale prices.

ESDM Minister Ignasius Jonan had earlier considered a new scheme for entering the price of coal as a reference for setting the electricity tariffs. This consideration is based on the extent of coal usage for generating power, which is still the key focus until 2026.

"We will try again to recalculate the electricity tariff formula, especially if the coal price is included, as 60 percent of our power plants primarily use coal energy. Hence, until 2026, coal will still be dominant, as the price is expected to remain more competitive, but power plants will also have to use technology that is more environmentally friendly," Jonan explained.

Indonesia's oil price is still the main factor in decision making for setting the electric power tariff. Currently, the number of diesel fuel-powered plants is getting smaller.

"Now, it is four percent at the most. Our target is that by 2026, it will be reduced to 0.05 percent. There is no way to use the Indonesian crude oil (ICP). If one wants it, he or she can use HBA (Coal Price References)," Jonan stated.

Based on data from the Directorate General of Electricity, the installed capacity of the nation's coal-fired power plants in 2016 was 29,880.23 megawatts (MW) from a total of 59,656.30 MW. Meanwhile, the nation's diesel power generation was only 6,274.79 MW.

With regard to the certainty of the new scheme, Jonan has yet to reach a decision and is still attempting to maintain a realistic outlook in line with the development of power plants. "Not yet, this is going to be discussed. We are trying to be realistic," Jonan stated.

The electricity power tariff is still calculated based on the three components: ICP, rupiah exchange rate against the US dollar, and inflation rate.

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