Towards a Sustainable and Competitive Power Future: Implementing the Independent Single Buyer Model in Indonesia’s Java-Bali Electricity System.

This research looks at how an Independent Single Buyer (ISB) mechanism could be used in the Java-Bali electricity system to fix inefficiencies and make the power sector more competitive and sustainable. ISB is separate from PLN and is its own entity and is not interfered by PLN or the government in the process of regulating system operations, so that the market will be fairer. This study uses jROS software to simulate three different situations: the current centralised model where PLN makes all the decisions, the phase of moving towards an Independent System Operator (ISO), and the full implementation of the ISB model. The ISB model can lower operating costs by up to 25% compared to the current system. This is because it gets rid of constraints like Availability Factor (AFpm) and Capacity Factor (CF), which makes plant operations between PLN and Independent Power Producers (IPPs) more competitive and efficient. The research also identified key challenges, including the ageing of PLN's sub-critical plants, excess capacity due to efficient IPP projects, as well as the financial burden of Power Purchase Agreement (PPA) contracts that place the entire demand risk on PLN. To address these challenges, a phased implementation of ISB, restructuring of PPA contracts, strengthening of transmission and distribution infrastructure, establishment of ISO for transparent grid management, increased use of renewable energy, and regulatory reforms to promote competition and attract private investment are recommended. With these measures, Indonesia can transition to an electricity market. [ABSTRACT FROM AUTHOR]