Development of a Competitive Electricity Market in Indonesia

As a consequence of the Asian financial crisis of 1997, the Government of Indonesia decided to make greater use of market mechanisms in the power sector and embarked upon a sector reform program. The ultimate goal is the establishment of a fully competitive power market. It is, though, recognized that introduction of market mechanisms will have to be confined to the power system of Java and Bali, and that a gradual transition will be required. The reform process has already made substantial progress to date, but much needs to be done before the final stage of a fully competitive market system can be accomplished.