Indonesia Power Generation Market: Snapshot
The growing population and a subsequent increasing demand for energy are by far the leading factors propelling the Indonesia power generation market. The power generation in Indonesia stood at 236 TWh in 2015 and is poised to reach 442.5 TWh by 2022, rising at a CAGR of 9.1% from 2014 to 2022. Indonesia-based mining companies are playing an instrumental role in developing the coal-fired power generation sector in the country. Construction of mine-mouth power plants is one of the key strategies being adopted by mining companies in the country. These power plants are expected to provide a distinct competitive advantage to operators owing to the localized nature of fuel supply, thereby working in favor of the overall market. In addition, the rising mining activities coupled with the flourishing quarrying sector are anticipated to support the growth of the market.
Moreover, the government has been compelled to seek different ways to generate power due to depleting oil reserves and burgeoning demand for power generation. Apart from coal, the abundance of natural gas reserves is augmenting the market. However, post-1997 crisis, the cut-down in infrastructure spending has taken its toll on Indonesia’s infrastructure sector. This has led to a detrimental impact on the power plants present in the country, which in turn is limiting the chances of power generation capacity additions. However, increasing inflow of foreign direct investments (FDI) is likely to emerge highly beneficial for power generation sector in the country.
Abundant Availability of Raw Materials to Fuel Growth of Coal-fired and Geothermal Power Generation Technology
Coal-fired power generation will continue to be the dominant power generation technology until 2022, accounting for more than 50% of the overall market capacity. The ever-increasing demand for power along with the rising need to connect population to the electricity grid drives the demand for coal-fired power generation. Moreover, rapid industrialization and growing agriculture-based activities are working in favor of the segment. The advent of novel technologies such as carbon capture and storage (CCS), fuelled by government efforts and support mechanisms for cleaner power generation, is supporting the growth of the segment. Furthermore, the easy availability of raw material due to the presence of a large number of coal mines is driving the Indonesia coal-fired power generation market.
The shares of the oil-fired segment are expected to nosedive during the forecast period, owing to the gradual phasing out of oil-based power generation plants. Due to rising demand for power, depleting oil reserves, and failure to develop new and equivalent resources, Indonesia became dependent on refinery products and crude oil imports since 2004. Since then, the country is emphasizing on the expansion of power generation capacity utilizing other technologies, especially renewable power generation and coal-fired.
Geothermal is emerging as an attractive technology for power generation and its power generation capacity is projected to rise at a 13.7% CAGR from 2014 to 2022. Indonesia has abundant geothermal resources and is home to about 40% of the world’s proven geothermal resources, which is higher than any other country. The government is working towards adding 5.0 GW of new geothermal power generation capacity by 2025. In order to achieve this target, the government has enforced several laws and legislations for promoting the development of this sector.
Some of the prominent companies operating in the Indonesia power generation market are PT Indonesia Power, PT PLN Persero, PT Pertamina Geothermal Energy, PT Pembangkitan Jawa Bali, and PT Jawa Power. Other players profiled in this report include Alstom, PT Geo Dipa Energy, Mitsubishi Heavy Industries Ltd., Chevron Indonesia, Hyundai Engineering Co. Ltd., PT Arutmin Indonesia., PT Wartsila Indonesia, Siemens AG, Asia Resource Minerals plc., and United Coal Indonesia.
The power industry is one of the largest and essential industries globally. There is a direct correlation between the development of a nation and its power industry. No country can achieve economic and social prosperity without adequate investments in electrification across the nation. Several power projects are planned in developing economies in Asia Pacific as these economies continue to expand their power generation capacities to meet the rising electricity demand. In the last few years, several developed economies have permitted the entry of private companies in the power industry. This step has introduced competition in the power industry, especially in the generation and retail supply of electricity. This market liberalization has further improved production efficiency of the overall industry.
In Indonesia, the power generation market is still dominated by the government-owned PT PLN. Approximately 85% of power generation facilities and the entire transmission & distribution network is solely controlled by PT PLN. The coal mining industry is developed in Indonesia with several private players investing in this market. Coal still continues to account for a major share in the global power generation industry. Although the share of coal is anticipated to decline in the future years, it would continue to be the major fuel in the short-term outlook.
This research study is designed to analyze the power generation market in Indonesia. The market is calculated in terms of power generation capacity (GW), power generation (TWh), and revenue (USD Billion). The market for power generation has been segmented on the basis of six major power generation technologies in Indonesia. These include coal-fired, natural gas-fired, oil-fired, geothermal, hydro, and combined cycle (gas-steam). The report provides growth forecast for the period 2014–2022. Projections have been provided for power generation installed capacities, power generation, and revenue. The study on the power generation market also provides historical data, detailed analysis, and statistically refined forecast for key technology segments.
The size of the power generation market has been estimated based on indicators in technology segments. The report includes the key market dynamics affecting the demand for power generation technologies. As a part of our market dynamics analysis, we have analyzed market drivers, market restraints, and market opportunities in Indonesia. A comprehensive landscape, which includes company market share analysis and market attractiveness analysis, has also been provided in this report. Company market share analysis has been provided for major players involved in power generation in Indonesia. Market attractiveness analysis has been provided for six power generation technologies in Indonesia.
The report also provides a detailed industry analysis of the power generation market in Indonesia with the help of Porter’s Five Forces Model. The Porter’s Five Forces analysis aids in understanding the five major forces that affect the industry structure and profitability of the global power generation technology market. The forces analyzed are the bargaining power of buyers, bargaining power of suppliers, threat from new entrants, threat from substitutes, and degree of competition. The Porter’s Five Forces analysis has been provided across the geographies studied in the report.
The report features an in-depth analysis of trends observed in each of the power generation technology segments provided in the report. Various new technologies, which are influencing the market dynamics of each power generation technology, have been identified and highlighted. Emerging trends for each power generation technology have been addressed for Indonesia.
The study also includes the value chain of the power generation market in Indonesia, which provides a glimpse of fuel procurement, contract awarding, power generation, as well as the interaction of suppliers and buyers with the end-users of the product. The market attractiveness has been primarily done considering the market size and market growth. Besides market size and growth, government support, regulatory policies, environment benefits, and availability of resources have also been considered to rank/benchmark major technologies for each region.
Key participants in the power generation market in Indonesia include Alstom S.A., PT Arutmin Indonesia, Asia Resource Minerals plc, Chevron Indonesia, Hyundai Engineering Co. Ltd., Medco Power Indonesia, Mitsubishi Heavy Industries Ltd., PT Adaro Energy Tbk., PT Bumi Resources Tbk., PT Cirebon Electric Power, PT Geo Dipa Energi, PT Harum Energy Tbk., PT Indonesia Power, PT Jawa Power, PT Pertamina Geothermal Energy, PT PLN, PT Wartsila Indonesia, PT. Pembangkitan Jawa-Bali, Siemens AG, United Coal Indonesia. This report provides an overview of these companies, followed by their financial revenues, business strategies, technical performance analysis, operational standards, and awards and achievements.
Indonesia Power Generation Market: Technology Analysis
- Coal-fired Power Generation
- Natural Gas-fired Power Generation
- Oil-fired Power Generation
- Geothermal Power Generation
- Hydro Power Generation
- Combined Cycle Power Generation