The electrical power industry in Indonesia has experienced a high growth in demand, averaging 8% per annum in the last ten years. However, due to the lack of infrastructure in the power sector, during 2000-2005, Indonesia still faces a power crisis in various areas. The current installed generation capacity is 29,885 MW. The state-owned electricity company PT PLN generates 24,924 MW, independent power producers 4,045 MW and captive power 916 MW. The GOI plans to assure electrification will reach 66.3% of households in 2009, installed generation capacity will reach 33,352 MW, electricity production will hit 156,957 GWh and investment in the sector will reach $7.5 billion. In 2008, $4.7 billion was invested in the sector.
It is estimated that the value of imported products from the U.S. will increase by another 10% in 2009. Indonesia imported $820 million of electrical power equipment in 2007. The market share of U.S. products was 15 percent of imported products (or $125.8 million in 2007). In 2008, imported value of U.S. products increased to $140 million.. U.S. products will likely account for more than $180 million in 2009. The other major suppliers in Indonesia are from Singapore, Japan, China, France and Germany. Indonesian companies usually imported U.S. products directly or through an agent/distributor in Singapore.
U.S. companies are strong competitors in boilers, parts for boilers, parts for turbines, electrical generating equipment, transformers, lightning arresters, junction boxes, panel boards, and electrical conduit.
The GOI launched the first crash program in 2007 to provide an additional supply of 10,000 MW most of which are coal fired power plants. For Java-Bali systems, there are nine power plant projects in the development stage, of which three will be in operation in 2009 (PLTU Labuhan, PLTU Indramayu and PLTU Rembang) with total capacity of 2,310 MW. Outside Java-Bali area systems, 22 power plant projects are in the EPC stage and two will be in operation in 2009 (PLTU NTB and PLTU Sulut) with total capacity of 110 MW.
Recently, the GOI launched the second crash program for new production of 10,000 MW by 2014. The program will focus on developing power plants using renewable energy sources such as geothermal (42%), hydro (18%) and gas (14%). PT PLN plans to build 3,600 MW and the total investment of $3.8 billion and looks to private companies and partnerships to build 6,400 MW with an estimated investment of $13.5 billion. The GOI plans to start the tender for this program in April 2009.
Construction of power plants, transmission and distribution lines in Indonesia should bring significant commercial opportunities for U.S. companies that supply engineering services and equipment such as turbines, substations, transmission, and distribution equipment.