182 Index. D DAK (Dana Alokasi Khusus) [Special Allocation Fund], 163 in electricity sector, 164 decentralized power system, 40 41

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index A accumulation fund on rural electrification programme, 166 ADB. See Asian Development Bank (ADB) Advisory Group on Energy and Climate Change (AGECC), 142 affordable energy services, 137 AFNEI. See Allied Forces Netherlands East Indies (AFNEI) AGECC. See Advisory Group on Energy and Climate Change (AGECC) Allied Forces Netherlands East Indies (AFNEI), 14 ANIEM (Algemeene Nederlandsch Indische Electriciteit Maatschappij) [Netherlands Indies General Electricity Company], 10, 16, 42n2 as case study, 29 Armed Forces Rural Operation, 157 Asahan Unit III, 128–29 Asian Development Bank (ADB), 78 Asian financial crisis (1997/98), 49, 53 Asia Sustainable and Alternative Energy Program (ASTAE), 140, 171n3

ASTAE. See Asia Sustainable and Alternative Energy Program (ASTAE) ATA mechanism. See automatic tariff adjustment (ATA) mechanism AusAID (Australian government overseas aid program), 140 automatic tariff adjustment (ATA) mechanism, 85 autonomous PV, 167, 168 B Badan Pusat Statistik (BPS), 159, 172n12, 172n13 Bali Action Plan, 117, 118 BANAS. See Board for Nationalization of Dutch Enterprises (Badan Nasionalisasi Perusahaan Belanda, BANAS) baseline emissions factor, 118 Batavia Netherlands Indies Electricity Company in, 8 power distribution system in, 10 “big bang” approach, Dutch companies, 30 “Big Five”, 19, 42n8 bilateral sources, 76 biodiesel, 131, 132

181

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182 Index biogas projects, 122 bivariate framework, 96 bivariate models, 103–5 Board for Nationalization of Dutch Enterprises (Badan Nasionalisasi Perusahaan Belanda, BANAS), 18 bonds, PLN issues, 78, 79, 87 BPPTL (Badan Pengawas Pasar Tenaga Listrik) [Monitoring Agency for the Electricity Market], 36 BPS. See Badan Pusat Statistik (BPS) BPU-PLN (Badan Pimpinan Umum Perusahaan Listrik Negara) [State Electricity Company Management Agency], 30 bodies of, 22 electricity sector, 21–24 BRIC countries (Brazil, Russia, India and China), 108 business plan, PLN, 41, 126 C captive power, 69n1 generation, lack of reliable data for, 53 in Indonesia, 54–56 sources, 49 carbon dioxide emissions, 112, 113, 122 from electricity sector, 115, 122–30 from energy sector, 114 “carbon-locked” situation, 116 CDM. See clean development mechanism (CDM) “cheap electricity and power saving” programme, 164 China coal consumption for coal-fired power plants, 123

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coal-fired power plants in, 124 thermal efficiency of coal-fired power plants in, 124 chronic power shortage problem in Indonesia, 95 clean development mechanism (CDM), 118, 119 projects, 120, 121 coal, 122 consumption for coal-fired power plants, 123 electricity production from, 116 coal-based electricity production, proportion of, 116 coal-based power plants, 3 technology choices for, 122–25 coal-fired power plants in China, 124 coal consumption for, 123 Commission on Sustainable Development (CSD), 137 communal PV, 167, 168, 172n17 conservative hypothesis, 106, 107 contextual performance, 3 convergence analysis electricity, 66–69 in electrification ratio, 67 in rated capacity, 67, 68 “cooperative sectoral approach”, 118 Corruption Eradication Commission (KPK), 177 CSD. See Commission on Sustainable Development (CSD) D DAK (Dana Alokasi Khusus) [Special Allocation Fund], 163 in electricity sector, 164 decentralized power system, 40–41

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Index demand side management (DSM), 95 policy, 120, 125–26 Department of Mining and Energy (DME), 34 programme, 162 Dickey-Fuller test, 103 diesel power plants growth rates of, 58–59 power generation costs from, 58 Djawa Denki Djigyo Kosha (Java Electricity Company), 12 DME. See Department of Mining and Energy (DME) domestic economy, 73 domestic financing, 77, 78 Dutch companies approaches to nationalize, 30 electricity management, 16 Dutch East Indies government, hydropower plants development, 9 Dutch employees, work permit quota for, 19 Dutch government dispute for ownership, 14–15 Staatsblad (Statesheet) 1927 No. 419, 10 Dutch Military Aggression I, 15 Dutch Military Aggression II, 15 Dutch private sector companies, 8–9 dynamic baseline method, 118 E ECM. See error correction models (ECM) econometric model, 107 economic crisis, 101–2 and impact on power sector, 72–91 PLN. See PLN

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183 economic policy, 19 ECT. See error correction term (ECT) electricity availability of, 178 convergence analysis, 66–69 demand of, 1, 62–66 efficiency in, 125–26 management of, 16 performance of, 25–28 production by area, 27 production of, 46, 47, 50, 52, 178 for public utility, regulation on, 33 sales in public sector, 28 sales of, 46, 47, 50 sold, share of, 65–66 trading of, 176 transmission and distribution losses, 60–61 unequal, 140 electricity access, 2 current condition of, 137–40 households without, 152 inequality in electricity infrastructure, 144 lack of, 145, 154 electricity and economic growth in Indonesia, 94–95 analysis and implications of, 105–10 bivariate and trivariate models, 103–5 consumption revisited, 99–103 literature review, 95–97 methodology, 98–99 electricity business, ways for private involvement in, 50–51 electricity conservation, 107, 178 electricity conservation policy, 109, 125

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184 Index electricity consumption, 46, 142 conservation, 94 growth rates in, 47 rate of, 11 electricity consumption per capita, 99, 100, 106–7, 138 data for, 98 household and, 143 relationship between GDP per capita growth and, 99, 103, 104 electricity infrastructure, inequality in, 144 electricity intensity, 108 electricity law, 103 Electricity Law No. 15/1985, 33–34 Electricity Law No. 20/2002, 35, 36, 44n17 Electricity Law No. 30/2009, 37–39, 41, 129 electricity-poor families in Indonesia, 151 electricity price, 146, 149 electricity production from coal, 116 from renewable energy sources, 126 electricity purchases elements of, 90–91 PLN, 49, 50 electricity sector, 7–8, 72 after nationalization, 21–24 from BPU-PLN to PT PLN (Persero), 21–24 carbon dioxide emissions from, 115, 122–30 centralization, decentralization, and competition, 39–42 economic dimension in independence and late Sukarno era, 18–21

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electricity performance, 25–28 financial health of, 78 Independence period, 13–18 in Indonesia, history of, 30–31 institutions and organizations dynamics, 31–39 new order regime, 25–31 performance of, 177 post-old order regime, 31–39 pre-Independence period, 8–13 renewable energy and, 127 electricity subsidies, 74, 75, 156, 165, 166 based on type of customer, 148 benefits of, 149 distribution of, 146, 147 electricity subsidy, 178 electricity supply costs in Indonesia, 146 electric power development, financial realization of, 77 electric power losses non-technical losses, 60–61 technical losses, 60 electrification rate, urban, 138 electrification ratio, 62, 167 and accumulation fund on rural electrification programme, correlation between, 166 and budget on rural electrification programme, correlation between, 165 of DKI Jakarta, 141 at provincial level, 142 emissions reduction purchase agreements (ERPA), 120 Energy and Mineral Resources (Energi dan Sumber daya Mi, ESDM), 170 energy conservation policies, 108, 109 potential rewards of, 107

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Index energy education, 109 energy efficiency policies, 125 energy performance, 3 energy price variable, 96, 105 energy-related carbon dioxide emissions, 112 energy sector, 47, 113 carbon dioxide emissions from, 114 energy security framework analysis, 176 Energy Self-Sufficient Village programme, 162 energy services affordable, 137 incremental levels of access to, 143 scope of, 163 energy supply sources, 103 Energy Sustainability Index, 3, 4 ERPA. See emissions reduction purchase agreements (ERPA) error correction models (ECM), 98 error correction term (ECT), 98 ESMAP (Energy Sector Management Assistance Program), 140 European plantations, small-scale permits, 10 Export-Import Bank of Korea (K-EXIM), 91n3 F fast track programme, 95, 114, 115 feed-in tariff (FIT), 129 incentives on, 131 finance lease, electricity purchases, 90–91 Finec (Financieel-Economische Overeenkomst) [Financial Economic Agreement], 15–16

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185 fiscal incentives, 109 FIT. See feed-in tariff (FIT) “five veto power”, 37–38 foreign aid, 76–77 foreign commercial banks, 92n17 foreign-owned power plants, 82 fuel, 87–89 cost of, 89, 146 funds investment, 78–79 on power sector, 79 Rupiah counter fund, 78 on rural electrification programme, accumulation, 166 G geothermal energy, 49, 129, 132 sources, 123 geothermal law, 129 geothermal power plants, 58, 89, 90, 127, 129 power supply from, 126 geothermal projects, 122, 129 Patuha geothermal project, 83 global energy system, strategic challenges in, 137 GOLKAR party, 156 governance, development of, 177 Government Regulation No. 3/2005, 36, 37 Government Regulation No. 18/1972, 32 Government Regulation No. 23/2014, 133 Government Regulation No. 31/2007, 130 Government Regulation No. 36/1979, 33 Government Regulation No. 52/2011, 130

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186 Index Government Regulation No. 94/2010, 130 Government Regulation No. 43/2014 on the Implementation of Village Fund, 179 gradual approach, Dutch companies, 30 Granger causality test, 97, 98, 104 greenhouse gas emissions “no-lose” greenhouse gas emissions, 118 reductions, NAP for, 120 green path power system, 130–33 green power system, 116 gross domestic product (GDP) per capita growth data for, 98 and electricity consumption per capita, relationship between, 99, 103, 104 positive causality from, 105 growth hypothesis, 106, 107 H Harvard Project on International Climate Agreements, 117, 133n3 High Performing Asian Economies (HPAEs), 64 high speed diesel (HSD), 131–32 consumption of, 55 household appliance, efficiency enhancement of, 122 household customers percentage of, 152 price of electricity for, 149, 150 in rural areas, share of, 160 household energy consumption, 106 HPAEs. See High Performing Asian Economies (HPAEs) HSD. See high speed diesel (HSD)

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hydroelectric plants, growth rates of, 58–59 hydropower, 8, 26, 29 growth in, 11 Hydropower Asahan Unit III, 128 hydropower plants, 26, 126, 127 development of, 9 Mendalan hydropower plant, 10 small-scale permits, 10 in West Java, 10 hypothesis test, between electricity consumption and economic growth, 95, 96 I IBRD. See International Bank for Reconstruction and Development (IBRD) ICP. See Indonesia Crude Oil Price (ICP) IMF. See International Monetary Fund (IMF) Independence period, electricity sector in, 13–18, 29 independent power producers (IPP), 126 model, 51 procurement processes, 83, 84, 90, 177 indigenous sector, small-scale permits, 10 Indische Bedrijven Wet [Indies Enterprises Law], 17 Indonesia challenges of, 1 government, dispute for ownership, 14–15 Indonesia Crude Oil Price (ICP), 57–58 Indonesia Electricity Standards (Standar Listrik Indonesia, SLI), 33

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187

Index Indonesia Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan, PSAK), 90 Indonesia Geothermal Association, 129 Indonesia Nationalist Party (Partai Nasional Indonesia, PNI), 17 Indonesian Government Regulation No. 70, 107 industrial sector, 73 decline in, 63, 64 growth and transformation of, 63–64 inflation effect of, 20–21 growth in, 20 input-output ratio, 73, 74 International Bank for Reconstruction and Development (IBRD), 78 International Energy Agency (IEA), 133n6 International Monetary Fund (IMF), 34 International Year of Sustainable Energy for All (SE4A), 137 Interpretation of Financial Accounting Standards (Interpretasi Standar Akuntansi Keuangan, ISAK), 90 Investment Fund Account, 157, 172n10 investment funds, PLN, 78–79 investments in electricity sector, 102 in power supply, 145 IPP. See independent power producers (IPP) ISAK. See Interpretation of Financial Accounting Standards (Interpretasi Standar Akuntansi Keuangan, ISAK)

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IUKU (Izin Usaha Kelistrikan Untuk Kepentingan Umum) [Public Utilities Licence for Electricity] models for, 50 J Jamkesda (regional health insurance), 153 Jamkesmas (community health protection scheme), 153 Jampersal (maternity insurance), 153 Java electricity production in, 27 power system management in, 10, 12 Johansen cointegration test, 104 joint Jarque-Bera statistics, 104 K Kalimantan, nuclear power plants, 40 Kalla, Jusuf, 40 K-EXIM. See Export-Import Bank of Korea (K-EXIM) KORBI (Kantor Urusan barang-barang Republik Indonesia) [Office to Manage the Properties of the Republic of Indonesia], 14 KUD (Koperasi Unit Desa) [Village Cooperative Unit] cooperation between PLN and, 156, 158 in electric power business, 156 role of, 157 Kyoto Protocol, 118 L labour input variable, 96 labour union movements, 13–14 land acquisition, 125, 128 problems, 129

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188 Index land ownership, overlapping of, 127, 129 Law No. 19 of 1965 on Desa Praja, 161 Law No. 22 of 1999 on Local Government, 161 Law No. 32 of 2004 on Local Government, 161 Law No. 6 of 2014 on Rural, 161 Law No. 5 of 1979 on Rural Government, 161 Law No. 17/2006 on Custom, 130 Linggarjati Agreement, 15 Listrik Masuk Desa (rural electrification programme), 156 listrik murah dan hemat programme (“cheap electricity and power saving” programme), 164, 165 LM test (test for residual autocorrelation), 104 loans, soft, 76–79 Local Regulation No. 4/2007, 173n21 long-term financing options, 79 long-term power expansion model, 130 long-term rural electrification programme, 160 low electrification ratio, 141 provinces with, 166 lubricants, 87–89 M Management Service Arrangement (MSA), 157 manufacturing sector, post-economic crisis growth rates for, 64–65 MDGs. See Millennium Development Goals (MDGs) MEMR. See Ministry of Energy and Mineral Resources (MEMR)

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Mendalan hydropower plant, 10 micro-finance programme, 153 microhydro projects, 163, 169 micro/mini-grid, 162 Millennium Development Goals (MDGs), 137 Ministry of Energy and Mineral Resources (MEMR), 162, 164, 169 Regulation No. 2/2011, 131 Regulation No. 3/2013, 162, 163 Regulation No. 3/2015, 83 Regulation No. 17/2014, 131 Ministry of Finance, 78, 80 mobile phone penetration in non-electrified households, 153–54 monetary incentives for renewable energy, 131 multilateral sources, 76 N National Action Plan (NAP), 117 for greenhouse gas emissions reductions, 120 nationalization, electricity sector after, 21–24 National Program on Community Empowerment of Rural Independency (Program Nasional Pemberdayaan Masyarakat-Mandiri Perdesaan, PNMP-MP), 170 national rural electrification policy, 155 National Socioeconomic Survey (Survey Sosial Ekonomi Nasional, SUSENAS), 151–52 Nederlandsch Indische Gas Electriciteits Maatschappij (Netherlands Indies Gas Company, NIGM), 10–11

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Index Netherland Indies Civil Administration (NICA), 14 Netherlands Indies Electricity Company (Netherlandsch-Indisch Electriciteit Maatschappij, NIEM), 8 neutral hypothesis, 106 New Order period, 177 NGO Working Group on Power Sector Restructuring, 43n16 NICA. See Netherland Indies Civil Administration (NICA) NIGM. See Nederlandsch Indische Gas Electriciteits Maatschappij (Netherlands Indies Gas Company, NIGM) “no-lose” greenhouse gas emissions, 118 non-electrified households, mobile phone penetration in, 153–54 non-fiscal incentives, 109 non-metering power supply, customers with, 151 non-technical losses, electric power, 60–61 normal purchase transactions, electricity purchases, 90–91 North Sumatra, private electricity companies in, 10–11 NTT province, 142 SEHEN programme in, 167–71 nuclear power plants, preference for, 40 O OECD. See Overseas Economic Cooperation and Development (OECD) off-grid connection programme, 167 Office of Electricity and Gas, 13, 14 shifting of, 15

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189 OGEM (Overzeese Gas-en ElectriciteitsMaatschappij) [Overseas Gas and Electricity Company], 16 oil boom, 78, 100–2 oil consumption, 131 on-grid connection programme, 167 OP. See Operating Permit (OP) operating electricity utilities, 34 operating leases, electricity purchases, 91 operating permission, 35 Operating Permit (OP), 51 OPIC. See Overseas Private Investment Corporation (OPIC) Overseas Economic Cooperation and Development (OECD), 77 Overseas Private Investment Corporation (OPIC), 80 P Paiton I project, 80, 92n8, 92n17 Patuha geothermal project, 83 Pembangkit Listrik Tenaga Air (PLTA), 10 Perum Listrik Negara (State Electricity Corporation), 32 Phillips-Peron test, 103 photovoltaics (PV), types of, 167 pioneer industries, 130 PISA. See Purchase and Installment Sales Agreement (PISA) PKI (Partai Komunis Indonesia) [Communist Party of Indonesia], 24 Planned Overall National Development (Pembangunan Nasional Semesta Berencana, PNSB) 155

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190 Index P3LG (Pusat or Penguasa Perusahaan Listrik dan Gas Pusat) [Central Administering Board for Electricity and Gas Enterprises], 17–18 PLN (PT Perusahaan Listrik Negara (Pesero)) [The National Power Company], 24, 106, 129, 169, 171n5 additional capacity by, 109–10 business plan, 41, 126 electricity purchases, 49, 50 financial problem of, 75–76 funds on power sector, 79 high speed diesel consumption, 55 installed capacity of, 52, 53 internal dispute in, 31 investment funds, 78–79 and KUD, cooperation between, 156, 158 loan, 76–79 mistrust on, 30 monopoly power, 39 objectives of, 33 power purchase agreement, 79–85 private sector financing, 41 rural electrification programme, 157, 160, 162–63 tendering process, 89 PLN Board of Director (DDPLN), 18 divisions of, 42n7 PLN-Gatrik complex, 31–32 PLTA. See Pembangkit Listrik Tenaga Air (PLTA) PNSB (Pembangunan Nasional Semesta Berencana) [Planned Overall National Development], 155 post-economic crisis growth rates, for manufacturing sector, 64–65

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post-oil boom period in Indonesia, 102 post-old order regime, electricity sector, 31–39 potential rewards of energy conservation, 107 power crisis, 39 power development, 9 power distribution system, in Batavia, 10 power facilities, 76 power generation, 51, 52 costs from diesel power plants, 58 development of, 8, 52 power plant expansion policies on, 124 process, 123 power plants decline in capacity, 57 steam coal, 58, 123, 149 type of, 47, 48 power production, 73 power purchase agreement (PPA), 79–85, 90–91 power sector centralized structure of, 39 challenges of, 3 development of, 10, 30, 34, 47, 177 economic crisis and impact on, 72–91 PLN funds on, 79 during pre-Second World War expansion, 11 rapid development of, 72 trapped carbon in, 112–17 power supply availability of, 178 investments in, 145 lack of, 40 small scale, 155

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Index power system, 3 in Java, 10 planning, 3, 139 PPA. See power purchase agreement (PPA) PPP. See public private partnership (PPP) PPU. See private power utility (PPU) pre-Independence period, electricity sector in, 8–13 Presidential Decree No. 9/197, 32 Presidential Decree No. 10 on Energy Saving, 108 Presidential Regulation No. 61, 117 private power utility (PPU), 51 private sector electricity production, 49–50 financing, 41 growth rate of, 57 IUKU, scope of projects for, 50 project aid, 76 protected water spring source, 171n7 PSAK. See Indonesia Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan, PSAK) PT Perusahaan Listrik Negara (PT PLN), 33–34, 120, 123, 131 from BPU-PLN to, 21–24 PT PLN Business Plan for Electricity Utility, 40–41 public electricity industry, capacity in, 25 public enterprises, 34–35 public private partnership (PPP), 51, 124 Purchase and Installment Sales Agreement (PISA), 77

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191 R renewable energy, 29, 116, 122, 130, 162 carbon dioxide emission management, 126–30 and electricity sector, 127 monetary incentives for, 131 proportion of, 126 reserve, capacity and rate of utilization of, 128 small scale sources, 160 sources, 122 types of, 163 rented power generation objectives of, 52 proportion of, 52 Renville Agreement, 15 residual autocorrelation, tests for, 104 Round Table Conference (RTC), 15 Royal Netherlands Indies Army (Koningklijke Netherlands Indische Leger, KNIL), 14 RTC. See Round Table Conference (RTC) Rupiah depreciation of, 75, 80, 101 exchange rate, 80 Rupiah counter fund, 78 Rupiah from Foreign Loan (Rupiah Pinjaman Luar Negeri, RPLN) strategy, 78 Rural Areas Electric Power Section, 155 Rural Electricity Cooperatives, 157, 162 rural electricity programme, 136–37 current development of, 162–67 electricity access, current condition of, 137–40 electricity-poor people, 151–54

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192 Index managing, 154–62 SEHEN programme in NTT province, 167–71 Rural Electrification Credit, 172n16 scheme, 157 rural electrification programme, 157, 160, 162–63, 179 accumulation fund on, 166 sustainability of, 179 rural electrification rate, 138, 172n11 rural electrification ratio, 151, 162, 163 rural electrification scheme, 156 S sectoral approach, understanding of, 117–22 sectoral crediting baseline approach, 118 sector-based programmes, 120 SEHEN programme, 169 in NTT province, 167–71 SHS. See solar home system (SHS) single-equation Jarque-Bera statistics, 104 SLI. See Indonesia Electricity Standards (Standar Listrik Indonesia, SLI) small-scale permits, hydropower plants, 10 small scale power supply, 155 small scale renewable energy sources, 160 Soeharto era, 100 Soekarnoputri, Megawati, 35 soft loans, 76–79 solar home system (SHS), 169 programmes, 170 solar panel module, 132 SSS. See Sumatera Staats Spoorwegen (SSS) [Sumatra Train Company]

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State Water Power Enterprise (Lands Waterkracht Bedrijven, LWB), 10 steam coal power plants, 58, 123, 149 electricity production, 89–90 mechanism, 114 technology on, 120 steam power plants advanced technologies for, 122 proportion of, 115 Sukarno, 155 economic dimension in independence and, 18–21 Manipol USDEK, 22 Sumatera Staats Spoorwegen (SSS) [Sumatra Train Company], 11 Supervisory Commissions on Business Competition (KPPU), 177 SUSENAS. See National Socioeconomic Survey (Survey Sosial Ekonomi Nasional, SUSENAS) sustainable energy, 116 “Sustainable Energy for All” initiative, 137 T technical losses, electric power, 60 Technology Finance and Assistance Package, 119 tendering process, PLN, 89 Thai baht depreciation, 101 thermal efficiency of coal-fired power plants in China, 124 time series analysis approach, 94 total electricity consumption per capita, households and, 143 TPPI. See Trans Pacific Petrochemical Indotama (TPPI) transmission lines, length of, 144

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Index Trans Pacific Petrochemical Indotama (TPPI), 87, 89 trivariate analysis, 96 trivariate models, 103–5 two-year stabilization plan, 100 U ultra-Marxist group, 16–17 ultra-supercritical technology, 124 “UN Decade of Sustainable Energy for All”, 138 UNDP. See United Nations Development Programme (UNDP) unequal electricity access, 140 United Nations Development Programme (UNDP), 137 United Nations Framework Convention on Climate Change, 117 unprotected water spring source, 171n7 UN Resolution No. 65/151, 137 UN Resolution No. 66/288, 137 UN Resolution No. 67/215, 138 urban electrification rate, 138

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193 V VAR. See vector autoregressive model (VAR) VCM. See voluntary carbon mechanism (VCM) vector autoregressive model (VAR), 99, 104 bivariate model estimation results, 104 trivariate model estimation results, 105 village unit cooperatives, 156 voluntary carbon mechanism (VCM), 120 W WEC. See World Energy Council (WEC) West Java, hydropower plants in, 10 work permit quota, for Dutch employees, 19 World Bank, 100 Policy Brief, 140 World Energy Council (WEC), 3 World Summit on Sustainable Development, 137

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