Electricity Business Under Restricted Monopoly: Opportunity or Challenge for Geothermal Development in Indonesia

Abstract

PLN as an electricity business authority holder (PKUK) turned into business permit holder (PIUPTL) that engage business in supplying electricity as public utility which includes generation, transmission, distribution, and retail of electricity. This electricity supply business has to be done in an integrated way by one business entities within one business area (Law 30/2009). PLN performs electricity supply business to the public at the price that is determined by the Government while on the upstream side, PLN has primary energy supply in accordance with the market price. There are possibilities that can be done beside scheme of independent power producer, namely: ownership of business area and power wheeling scheme. These schemes emphasize cooperation among PIUPTL as well as between industry and PIUPTL. In electricity supply industry, the investment decision made today will give impact to the economics of electricity systems for many years to come. This paper discusses how strategic management by PLN in order to improve its competitive advantage with long-term planning of the primary energy sources including geothermal energy as a clean, environmentally friendly, and sustainable energy.