Electricity: Indonesia vs ROK20 Jun 2010
A writing from Dahlan Iskan (CEO of PLN, Indonesia’s State Electricity Company) about comparison of electricity in Indonesia and in Republic of Korea. It’s a good article
showing an Indonesian perspective of Korean electricity. So, here’s the translation..
Dahlan Iskan: It’s just important when it’s dead!
Last week I accepted guests from Kepco, leading power company in South Korea. Many things were discussed. Starting from nuclear energy to the electricity tariff there. In Korea, apparently Kepco was also asked by the goverment to service electricity to certain category with a very low tariff.
The difference, evidently the lowest electricity tariffs in ROK were not for low class household. The lowest was given to agricultural sector. The policy had two intentions: to help the farmer and also to encourage the agriculture production.
In Indonesia, the lowest electricity tariff was given to the low class household.
That was the household only subscribing for 450 kva. This group paid about Rp 35.000 to Rp 60.000(about 4000-7000 Won or 3.5 to 6 USD)per month. These subscribers were 19 million houses. Many of them had more monthly spending on the cellphone bill.
In ROK, electricity for household is considered consumptive, not productive. Therefore, in Korea the electricity rate for household was set to the highest. This was meant to break, to force people saving their electricity usage. In household, people were tend to use lamp without any mean. Even, in the unused bathroom people often left the lamp on. No wonder, it’s cheap!
In Korea, even the farmer, got the highest rate in their house. But, their field/arable /pasture got the lowest. The gap between the highest and the lowest in Korea to Indonesia was almost the same. The highest is Rp 1.200 (1,5 Won)/kva. The lowest is Rp 450(0.4 Won)/kva. Hence in Korea, tariff for agriculture is Rp 450/kva, while for household is up to Rp 1.200/kva, including the farmer’s house.
I didn’t know how the chronological so the electricity tariff in Indonesia could oppose the effort of creating high productivity nation. What I knew, Indonesian business chamber had wanted the change in the tariff system that could stimulate the national economy, like that of in South Korea.
Could someday Indonesia tend to more focus in productivity and limit the consumptive electric usage? Until now, electricity tariff system, including the rate, is fully decided by the government (executive) and DPR (legislative). PLN just accepted what has been decided by those two high bodies.
And so were in ROK. The “PLN” in ROK didn’t have authorities to decide the tariff. Then, as well as in Indonesia,every yearthe power company also suggested the government to increase the lowest tariff. Only in Indonesia, the matter of that suggestion granted or rejected was completely in the hand of government. The difference is,that the power company in ROK didn’t need subsidy (from the government) . Because the lowest category (agriculture) is only contributing 10 percent to the whole electricity consumption. The household which is the highest rate had a bigger portion to the consumption. The tariff for industry was not the highest, but also did not need to get the subsidy.
In Indonesia, the lowest class household subscribers are the most in number. It accounts to 19 million houses. Therefore, business and industry bear the electricity cost from those household. That’s why the government had to aid the household until Rp 60 trillion (75000 ?? or 6 billion USD) per year, including to pay the unused lamp in the bathroom.
South Korea was really determined thinking about their electricity. But that didn’t mean that there were no problem or challenge. Rallies and demonstration also happened. Even so, for the electricity matter that is so important, the policy could not lose to the protests. Including in nuclear energy. Yet having a small land, not as big as Java island, Korea had 18 nuclear power plants. Soon, there would be 20. South Korea’s land area is only 100.000 km2 (meanwhile Java is 130.000 km2).
The east coast of ROK (facing to Japan) is now full with a line of nuclear power plants. Also, in its south coast. For the new plant, there was no other place than to make it in west coast (facing to China). At this time, South Korea produced 30.000 MW of electricity by nuclear. That number was the same as the total electricity in Indonesia.
Regarding the last year ROK’s electricity production that reach 70.000 MW (twice as Indonesia), that means 50 percent of electricity in ROK coming from nuclear energy.Moving forward, Korea will increase it to 80 percent of national need. That PLN of ROK was really able to make big invesment. Since, even owned by the goverment, the status had became a public company that listed in Seoul and New York stock exchange.
The number of nuclear power plant in ROK, made Koreannowadaysable to build their own plant Half of 18 plants operated in South Korea were their own made. Furthermore nowadays, Korean won a nuclear power plant bidding in Dubai for 4 units, each had 1.400 MW production capacity, had to be finished in the near 2015.
Wasn’t there any problem with the public? Wasn’t Korea land very small? Protest often happened. But, electricity had been considered as a key of whole national productivitiy. Therefore the electricity development could not be interfered. Whereas most of those plants were located in the suburbs area. The distance between the town and the plants was only 8 km. To “pacify” with the town population, goverment gave a special facility to the satellite city. Like, roads development, schools, and healthcare facilities were improved exclusively.
Yet, electricity was not considered important in Indonesia. The people spending on phone was bigger than to pay electricity. Electricity’s just important when it’s dead! (*)