generating electricity for the country. In addition, various IPPs and leased power producers also participate in the power system. Indonesia’s electricity system is a highly regulated market, where PLN determines the price and retails the electricity to the consumers in industry, residential, commercial and other sectors.

In terms of international interconnectors, a 600 MW HVDC transmission line connecting Sumatra and Peninsular Malaysia was to be commissioned by 2015. However, Indonesia has postponed the project in order to focus on domestic priorities.

Planned development, including cross-border integration

Indonesia’s PDP – the Electricity Supply Business Plan, with the Indonesian abbreviated RUPTL

– is updated on an annual basis. Under the most recent RUPTL (2018-27), more than a third of new capacity will be coal generation (26.8 GW), while a quarter of total installed capacity will come from natural gasand oil-fired generation. In addition, Indonesia plans to develop renewable energy sources, in particular hydro (15%) and geothermal (8%). Only a small fraction of new capacity will come in the form of wind and solar PV (PT PLN, 2017).

Figure 21. Capacity additions in Indonesia, 2018-27, based on RUPTL

Source: ASEAN Centre for Energy.

Most of the capacity addition will come from fossil fuels, though Indonesia also has plans to build hydro capacity.

Interconnection targets are explicitly included in the RUPTL, including, for example, a 500 kV, 600 MW HVDC submarine interconnection connecting Sumatra to Peninsular Malaysia. This interconnection, if developed, would take advantage of the two regions’ different demand patterns, with Indonesia expected to be a net exporter. However, at present Indonesia is focusing on developing domestic generation (in particular, its 35 GW target) and interconnector development is not a priority.

Malaysia (Peninsular)

Peninsular Malaysia is the centre of the country’s economy, making up about 80% of Malaysia’s total power demand. Demand is also growing rapidly, having increased 20 TWh in only six years, to 116.5 TWh in 2016. This demand is met by 25.4 GW of generating capacity, primarily based on natural gas.

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Figure 22. Power mix total generation and demand in Peninsular Malaysia, 2011-16

Source: ASEAN Centre for Energy.

Fossil fuels make up the majority of Peninsular Malaysia’s power generation, which serves a rapidly growing power demand.

Coal is the second-largest source of generation. In addition, a feed-in tariff for solar PV has encouraged investment in a growing portion of renewables, in particular solar PV, which reached around 264 MW (Figure 22).

The electricity supply industry in Peninsular Malaysia is served by a single vertically integrated utility, Tenaga Nasional Berhad (TNB), which is regulated by Suruhanjaya Tenaga (ST) or Energy Commission (EC). IPPs also take part in Malaysia’s electricity market structure, and their quantity is roughly 50% of electricity generation. TNB is also the main distributor for Peninsular Malaysia, but the government also issues licences to local distributors in certain designated areas (i.e. hill resorts, shopping complexes, industrial parks).

There are existing interconnections between Peninsular Malaysia and its neighbours, Thailand (the 300 MW Khlong Ngae–Gurun interconnection, commissioned in 2002) and Singapore (a 250 megavolt ampere [MVA], 230 kV high-voltage alternating current [HVAC] line commissioned in 1985). These are primarily used for imports. On 24 January 2018, Malaysia imported power for the first time from Lao PDR, via Thailand.

Planned development, including cross-border integration

Power development plans are mandated under the 11th Malaysia Plan. The most recent plan was developed by the EC for a 2026 planning horizon, and approved by the Committee on Planning and Implementation of Electricity Supply and Tariff (JPPPET). The proposed generation mix is detailed in Figure 23.

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