Rural Electrification in Indonesia
The Indonesian archipelago consists of 17,000 islands and a population of 240 million, 170 million of which live on Java. The low population density outside of Java and Bali, has made expanding the national grid increasingly difficult for the state owned electricity company, PLN. As of 2011, only 72.5% of the country’s regions have access to electricity and of the nation’s total 28GW productive capacity, over 21GW are reserved for Java and Bali .
Though 91% of Indonesia’s 70,000 villages have access to electricity - either through grid connection or decentralized sources - only 64% of households are currently electrified . This problem is exacerbated by the dispersed nature of rural communities and the high cost of grid connection to the individual consumers.
The Government of Indonesia (GOI) has prioritised the use of local resources for electrification and the country aims to electrify 95% of all households by 2025. Renewable energy is to provide 17% of the installed capacity, up from 5% today. The question remains how this can be done in a way that is socially equitable and local resources are not divorced from the economic wellbeing of local communities.
Increasingly, the GOI is incentivising and mandating private companies to take on rural development roles either through CSR projects or by requiring them to provide their own electricity for industrial purposes. As such it is often project developers from Jakarta which are able to exploit the available feed-in tariffs but many local communities remain unable to overcome the cost of grid connection.
NGOs such as IBEKA, the People Centered Business and Economic Institute are trying to reverse this, showing that engaging rural communities in 50:50 public-private owned hydropower projects can reduce both the capital expenditure and running costs of rural electrification projects.
This talk will canvas the current situation for Indonesia’s rural electrification and expand upon IBEKA’s methodology for generating community revenues from hydropower, as well as how this can be replicated and scaled with other renewable energy technologies as new feed-in tariffs come to light.