President: Indonesia to tackle power crisis

JAKARTA — Indonesia's president vowed Friday to begin tackling a national power supply crisis next year through projects to develop alternative energy and expand electricity capacity by more than 30 percent.

Power suppliers are unable to meet higher demand for electricity, driven by population and economic growth, and outages have hit large parts of the country in recent years. Adding to the problem, much of domestic coal is being exported to India and China for greater profit, causing shortages at home.

"God willing, starting by the middle of 2009, the power crisis on Java and Bali will begin to be overcome," said President Susilo Bambang Yudhoyono in his annual State of the Union address to Parliament Friday.

Yodhoyono outlined plans to boost power capacity by a quarter — or 10,000 megawatts — to the national power grid by 2011. That will be produced with new and renewable energy such as micro-hydro power, biofuel and geothermal, he said without giving details.

The country's 29,700 megawatts of electricity are largely dependent on oil and coal, making it highly vulnerable to soaring oil prices, which Yudhoyono said was expected to triple the cost of government fuel subsidies in 2008.

Indonesia has huge untapped energy resources, yet much of its population is impoverished and large areas regularly experience power outages.

Straddling a series of volcanic fault lines, Indonesia is believed to have the world's largest geothermal resource base, with the potential to provide 21,000 megawatts — more than half its energy needs.

More than half of Indonesia's 235 million people live on the island of Java, which — along with the island resort of Bali — uses the most power.

Yudhoyono, citing a World Bank report, said rising food and fuel prices could lead to social unrest in 33 countries and drive 100 million into poverty worldwide.

In May, the country raised fuel prices by an average 30 percent, sparking public protests.

Calling on Indonesians to save energy, he said the country will become self-sufficient in rice production in 2008 for the first time since the late 1980s, allowing it to consider becoming an exporter.

Construction of the new power plants will be opened to public tender to create "the widest possible opportunity to private companies to participate in the construction and operation," he said.

Indonesia's production of roughly a million barrels a day is at its lowest level in 30 years and Indonesia has said it will quit the Organization of Petroleum Exporting Countries because of declining oil reserves and investments.

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