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Analysis Of Factors Affecting the Electricity Supply in Indonesia

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  • Nababan, Tongam Sihol

Abstract

In Indonesia, the activities of supplying of electricity energy or generating of electricity power is still dominated by PT PLN (Persero). The supply of electricity has not been able to meet the demand of electricity by PT PLN. The electricity supply can be affected by amount of generation units, installed capacity, power capacity, investment, energy produced, fuel consumption, unit price of fuel, energy losses, the length of transmission and distribution network, interruption of distribution network, and captive power. The aim of this study is to analyze the factors affecting on the supply of electricity in Indonesia. Based on the characteristics of the data available on each units of PT PLN or provinces, the data used in this study is panel data in period of year 2009 - 2014. Based on the results of Chow Test and Hausman Test, to analyze the pooled data it is better by using Fixed Effect Model. The result of estimation shows that the factors affecting the supply of electricity in Indonesia are the price (tariff) of electricity, the price of fuel, the length of transmission lines, the energy losses. The the price (tariff) of electricity affects positively and significantly (α = 0.01) and elastic on the supply of electriciy. The price of fuel, the length of transmission lines and the energy losses affect negatively and significantly (α = 0.01) and inelastic on the supply of electriciy. While the number of distribution interruption has no significant effect on the supply of electriciy. Statistically, all dummy variables of individuals (PLN operational unit/province) and time (year 2009 – 2014) affect significantly (α = 0.01) on the supply of electriciy. It means that the patterns of electricity supply of PLN operational units and time patterns of electricity supply are different from the benchmarks. It is hoped that PT PLN focusing attention on tariff policy, to diversify the input of power generating units, to optimize the length of transmission lines, and also to minimize the electricity energy losses.

Suggested Citation

  • Nababan, Tongam Sihol, 2016. "Analysis Of Factors Affecting the Electricity Supply in Indonesia," MPRA Paper 76910, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76910
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    File URL: https://mpra.ub.uni-muenchen.de/76910/1/MPRA_paper_76910.pdf
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    References listed on IDEAS

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    1. Peter Samuel Ubi & Lionel Effiom & Emmanuel O. Okon & Anagha Emiemu Oduneka, 2012. "An Econometric Analysis of the Determinants of Electricity Supply in Nigeria," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 3(4), pages 72-82, July.
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    Cited by:

    1. Baah Appiah-Kubi & Mark Amo-Boateng & Bismark Boamah & E. Owusu Ansah, 2022. "Power Theft Practices in Ghana: Key Perspective Indicators Undermining the Revenue Mobilization Among Some Selected Regions within NEDCo Operational Areas in Ghana," International Journal of Science and Business, IJSAB International, vol. 16(1), pages 121-132.
    2. Remy Tehero & Emmanuel Brou Aka & Murat Cokgezen, 2020. "Drivers of the Quality of Electricity Supply," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 183-195.
    3. Adom, Philip Kofi & Agradi, Mawunyo Prosper & Bekoe, William, 2019. "Electricity supply in Ghana: The implications of climate-induced distortions in the water-energy equilibrium and system losses," Renewable Energy, Elsevier, vol. 134(C), pages 1114-1128.
    4. Adom, Philip Kofi, 2016. "Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over?," MPRA Paper 74559, University Library of Munich, Germany, revised 11 Nov 2016.

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    More about this item

    Keywords

    electricity; energy losses; pooled data; price (tariff); transmission and distribution;
    All these keywords.

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D2 - Microeconomics - - Production and Organizations

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