Factors Decomposition of Indonesia’s Household Electricity Consumption

Household sector has been ranked the largest electricity share over decades in
Indonesia. As response to the ever growing power demand in this sector, corresponding
energy policies should be appropriately formulated based on the understanding of the past
electricity consumption in household sector. This paper presents a study of factors
decomposition of Indonesia’s household annual electricity consumption for the period
2000 – 2010 using Additive-Logarithmic Mean Divisia Index (Additive – LMDI) method
considering current and constant pricing reference. Given a total of 29,285.2 GWh
electricity consumption, production effect contributed for 75.2%, under the constant price
or far less compared with that obtained under current price, or with 224.3%.
Contributions of the electrified household to the total output of national economy were
19.5% and 13.7%, using constant price and current price, respectively. Meanwhile, the
efficiency effect was also contributed for a total positive electricity consumption growth
with 5.3% under the constant price. In contrast, the same effect was contributed an
opposite direction with a decrease of 138% under the current price. Nevertheless, the
intensity effect was still contributed toward a positive household’s electricity growth, given
the efficiency improvement was failed to decrease the total change during the study period