INDONESIA & ASEAN

POWER GRID
Indonesia Roles in ASEAN Power Grid

Memorandum of Understanding on ASEAN Power Grid being established

to strengthen and widen the mutual cooperation on electricity
interconnection and trading between ASEAN countries with the purpose of
region energy sector security and sustainability.

Ir. Noezran Azwar, MT

1 April 2008
 1 April 2008

INDONESIA & ASEAN POWER GRID

Indonesia Roles in ASEAN Power Grid

E
nergy sector including electricity, in recent With this background, the power utilities and
years becomes a factor of economic growth in all authorities of ASEAN countries established a joint
countries, which also in ASEAN countries. forum Heads of ASEAN Power Utilities/Authorities
Electricity is being massively produced from available (HAPUA) in 1981. One of this forum tasks is to
energy resources to meet the demand. Nevertheless, establish and develop electricity interconnection
the development of new transmission and distribution network between ASEAN countries. In 2003 HAPUA
of the electric power is also being accelerated. conducted a study “ASEAN Interconnection Master
plan Study” (AIMS). The main goal is to found better
But, unfortunately not all countries have the luxury to ASEAN electricity power interconnection master plan
produce and distribute electricity easily, especially the that suits the need for supply, distribution and
countries that geographically have large areas and transmission, security, and opportunities for electricity
separated into islands and the countries which trading between ASEAN countries. The study result is
demographically not distributed very well. These a proposal for electric power interconnections that
countries are experiencing high cost investment to should be established between years 2007 – 2020;
provide electricity to their people. In some cases, the
closest energy or electricity resources being located in Table 1 AIMS Proposal for ASEAN Interconnection
neighbor countries that open the possibilities for having
No Grid Interconnections Year of
electricity trading between countries. Implementation
1 Sarawak - P. Malaysia 2015
2 P.Malaysia - Sumatra 2012
3 Batam - Singapore 2015
4 Sarawak - West Kalimantan 2012
5 Philippines - Sabah 2015
6 Sarawak - Sabah - Brunei 2015
7 Thailand – Lao PDR
a) Roi Et - Nam Theun 2 2009
b) Udon - Nabong 2010
c) Mae Moh - Hong Sa 2013
8 Lao PDR - Vietnam 2010
9 Thailand-Myanmar 2014
10 Vietnam - Cambodia 2008
11 Lao PDR-Cambodia 2010
12 Thailand-Cambodia 2007

To follow-up AIMS, in 23 August 2007 in Singapore,

Picture 1 ASEAN Countries
In South East Asia region, the electricity trading
occurred in 1966 between Lao PDR with Thailand. This
same cooperation also conducted in 1978 between
Thailand, Malaysia, and Singapore.
Memorandum of Understanding on The ASEAN Power
Grid (MOU on APG) signed by the ASEAN ministers.
MOU on APG is agreement between ASEAN countries
through ASEAN policies for strengthening and
widening mutual cooperation on interconnection and
electricity trading.

1

GENERAL SITUATION AND
CONDITION ON INDONESIA
ELECTRICITY SECTOR
Indonesia energy elasticity to economic growth is still
more than 1. It is showing that, Indonesia still has high
dependency to energy consumption for growing the
economy. In parallel with energy and electricity
efficiency effort for reducing energy dependency, to
have more sustained economic development, Indonesia
still has to do extra effort on providing energy and
electricity.
Indonesia is one of energy resources rich countries,
from the fossil fuel (oil, gas, and coal) to renewable
energy (hydro, wind, solar, biomass, and nuclear
power). But with Indonesia geographic condition as an
archipelago country, and demographically not
distributed very well, the efforts to provide energy and
electricity by utilizing those energy resources or
distributing the electricity, in some cases, are facing a
lot of obstacles. This condition is driving high cost
investment on electricity production and distribution
and becomes the reason why Indonesia still has low
electrification ratio, which less than 60%.
In the effort to raise electrification ratio and to
accelerate electricity capacity development,
Government of Indonesia (GOI) provide discretion for
development electric power supply sector through
policies and regulation. For example, through Law no.
15 Year 1985 About Electricity and Law no. 30 Year
2007 About Energy, Presidential Decree no. 5 Year
2006 About National Policy on Energy, Ministerial
Decree no. 1 Year 2006 About Procedures on Electric
Power Purchasing and/or Grid Leasing in the Effort of
Electricity Provision for Public, GOI gives discretion to
private sector to have electric power plant
(Independent Power Producers – IPP) which sell the
electricity produced to National Electric Power
Company (PLN) whom will distribute it to the people.
Through those policies and regulation, and through
Ministerial Decree no.2 Year 2006 About the
Development on Medium Scale Renewable Energy
Power Plant, GOI also give the discretion and
opportunities for renewable energy power plant
development.
1 April 2008
ELECTRIC POWER
INTERCONNECTION BETWEEN
ASEAN COUNTRIES
The discretion and opportunities given by GOI have not
yet being used optimally by the private sector whether
for technical reason or financing problem. This kind
situation occurred in some areas in Indonesia.
Like in Kalimantan Barat province, electric power
supply still depends on old diesel generators (PLTD),
which the operation cost is getting higher since the
inclining of world’s oil crude prices. The electrification
ratio in year 2007 is only 53.7%.
Kalimantan Barat electricity peak load in 2007 is 235
MW with production capacity of 1.197,5 GWh. Sixty
percent of the load is mainly supplied by electric power
generators from Kapuas Connection System through
150 kV transmission line and the balance from other
off-grid generators. Electricity selling in 2007 is 1,038.7
GWh with composition of; household 632.2 GWh,
commercial buildings 207.6 GWh, industries 94.5 GWh,
and other public services 104.4 GWh.
Electricity demand factors in Kalimantan Barat are
population growth and economic growth. Population
growth projection until 2025 is 0.89 per year with the
economic growth projection is 7.4%. With these
numbers, the electrification ratio in 2025 is projected
up to 99%. Electricity demand growth until 2025 is
projected to be 4.3% per year with the peak load to be
402 MW. Backup system is assumed 40% – 45%. The
electric powers plants have already integrated to the
system are off-grid diesel generators (in total of 12 MW)
and mini hydro generator (PLTM Merasap 1.5 MW).
There is plan to build 335 MW electric power plants to
meet year 2025 electricity demand of 402 MW which is
consist of coal generators (PLTU, 235 MW), diesel
generators (PLTD, 45 MW) and gas generators (PLTG,
55 MW). The ongoing power plant projects are coal
generators; PLTU Kura-Kura (2 x 25 MW) and PLTU
Parit Baru 2 (2 x 50 MW) which will be on operation in
2009.
In our neighbor ground, Sarawak Malaysia, there is
large hydro power plant which has already on
operation, Bakun hydro power plant 2400 MW.
Technically, this power plant is over production (since
the resource is over supply) and the electricity can be
2

utilized to meet Kalimantan Barat electricity demand.
If ASEAN Power Grid could be implemented as AIMS
2003 results, then grid interconnection between
Kalimantan and Sarawak will be engaged in 2012.
Picture 2 Kalimantan Barat Transmission and Distribution
Master Plan
If ASEAN electricity interconnection cooperation
format to be business to business scheme, then the
tariff on Malaysia – Kalimantan Barat to be set on each
business interest between PLN (the buyer) and Bakun
Hydro Power (the seller). If the tariff is referring to
Malaysia basic price which is 0.085 $/kwh and in the
other side PLN’s cost of generating electricity in
Kalimantan Barat is 0.26 $/kwh1, and with a simple
calculation the PLN’s cost efficiency would be 0.175
$/kwh. Therefore with this interconnection, there is
benefit for PLN in the form of investment/ operating
cost reduction.
Beside above interconnection plan, there are other
interconnections based on AIMS which are: Malaysia –
Sumatera (2012) and Batam – Singapore (2015).
In Malaysia – Sumatera interconnection plan there will
be electricity exchange in each country peak load time.
Indonesia will sell the electric power excess to Malaysia
in Malaysia peak load time (10.00 – 14.00) and will buy
electric power from Malaysia in Indonesia peak load
time (17.00 – 22.00).
In Batam – Singapore interconnection plan Indonesia
would be the electric power producer and will sell the
electric power produced to Singapore.
1 Quote from Pontianak Post in www.plnkalbar.co.id
1 April 2008
All the interconnection plans have to be based and refer
to Law no.30 Year 2007 About Energy, which give GOI
discretions to establish international cooperation on
energy provision. That cooperation shall be based on
nation goals of:
a. Strong nation energy security;
b. Security of domestic energy supply
c. Increase the nation economic growth.
On above basis, the signature of MOU on APG has tobe
comply with above Law no.30 Year 2007.
THE ENFORCEMENT OF MOU ON
ASEAN POWER GRID
Inside the MOU on APG there is agreement between
countries to do studies in solving of cross border issues
which are:
1. Technical;
The studies shall subject to the harmonization
of technical specifications for the ASEAN Power
Grid
2. Financing;
The studies shall subject to available modes or
arrangements for the financing of the
construction, operation and maintenance of the
ASEAN Power Grid.
3. Taxation and tariff
The studies shall subject to arrangements for
the mutually agreed imposition of, or exemption
from, import, export or transit fee, duty, tax or
other government imposed fees and charges on
the construction, operation, and maintenance of
the ASEAN Power Grid.
4. Regulatory and Legal Frameworks
The studies shall subject to harmonization of
regulatory and legal frameworks within ASEAN
to hasten the implementation of bilateral or
cross border power interconnection and trade.
5. Electric Power Trade
The studies shall subject to Institutional and
contractual arrangements for power trade.
6. Third Party Access
The studies shall subject to arrangement for
third party access for power interconnection and
trade in accordance with such internationally
accepted standards in the electricity supply
industry and formulation of a transmission
pricing framework within ASEAN.
3

MOU on APG delegates the responsibilities to Heads of
ASEAN Power Utilities/Authorities (HAPUA) to
establish SEAN Power Grid Consultative Committee
(APGCC).
To engage the enforcement of MOU on APG, there has
to be a ratification of MOU on APG by each country2.
Ratification instrument of MOU on APG in Indonesia
shall be based on law and other regulation. The
references for establishing the ratification instrument
are:
1. The Constitution 1945
2. Law no. 30 Year 2007 About Energy
3. Law no. 15 Year 1985 About Electricity
4. Law no. 24 Year 2000 About International
Treaty
5. Law no. 10 Year 2004 About Establishment of
Laws
Based on above Laws, ratification instrument format
definition shall be observed and determined by the
natures of the international cooperation will be
conducted. The ratification instrument shall be agreed
and legitimated by the Parliament if there are:
a) Impact on the nation
b) Impact on national budget
c) Impact on conjunct laws and regulations;3
Ratification instrument on international treaty shall be
legalized in the format of Law if related to:
a) Politics, peace, defense and security of the nation.
b) National border;
c) Nation sovereignty;
d) Human rights and environment;
e) Establishment of new Laws;
f) International grant and loan4
The natures of ASEAN electric power grid
interconnection through MOU on APG for Indonesia
are:
1. International electricity trading.
2. Securing energy and electricity supply.
Malaysia – Sumatera interconnection plan
2 Article X of Memorandum of Understanding on
ASEAN Power Grid
3 Article 11 UUD 1945
4 Article 10 UU No. 24 Tahun 2000 Tentang Perjanjian
Internasional
1 April 2008
would reduce deficit of electricity supply in
peak load time.
3. Increasing of national income. The electricity
trading between Indonesia – Singapore will
give economic benefit.
4. Affect the energy security, since there will be
dependency of electric supply to Malaysia in
certain amount and time.
On those natures, therefore, the suitable ratification
instrument format definition is by Law through
legitimating by the Parliament.
On the other side, MOU on APG still does not have the
mother law or treaty on the ASEAN level, yet. MOU on
APG is not a technical implementation of any ASEAN
mother laws. Therefore there shall be establishment of
the mother law first in order to enforce MOU on APG.
CONCLUSION
The signing of MOU on APG is a right step in the effort
of providing electricity for people also in increasing
national income. The APG should be treated as mutual
cooperation between ASEAN countries. To enforce
MOU on APG in order to implement the APG in time,
there is ratification instrument shall be established
soon.
References
1. ASEAN, Memorandum of Understanding
on ASEAN Power Grid, 2007
2. Republik Indonesia, UUD 1945
3. Republik Indonesia, UU No. 30 Tahun 2007
Tentang Energi
4. Republik Indonesia, UU No. 15 Tahun 1985
Tentang Kelistrikan
5. Republik Indonesia, UU No. 24 Tahun 2000
Tentang Perjanjian Internasional
6. Republik Indonesia, UU No. 10 Tahun 2004
Tentang Pembentukan Perudang-
undangan
7. Republik Indonesia, Peraturan Presiden
No.5 Tahun 2006 Tentang Kebijakan
Energi Nasional
8. Republik Indonesia, Peraturan Menteri
Energi dan Sumber Daya Mineral No. 1
Tahun 2006 Tentang Prosedur Pembelian
4
 1 April 2008
Tenaga Listrik dan/ atau Sewa Menyewa
Jaringan Dalam Usaha Penyediaan
Listrik Untuk Kepentingan Umum
9. Republik Indonesia Departemen Luar Negeri,
Petunjuk Pelaksana Pembuatan
Perjanjian Internasional , 2000
10. PT. Energy Management Indonesia, Laporan
Akhir Penyiapan Kerjasama Antar Negara
ASEAN dalam Interkoneksi Sistem Tenaga
Listrik, 2007
11. REPSF, Preparing for Electricity Trading
in ASEAN, 2005
12. PLN, Perubahan Rencana Usaha
Penyediaan Tenaga Listrik 2006 – 2015,
2006
13. PLN, Rencana Usaha Penyediaan Tenaga
Listrik 2006 – 2015, 2005
14. Pontianak Post, Mesin PLTD Terbakar, 14
Juni 2006