Indonesia’s budget has for years been burdened by large subsidies for electricity consumption. A series of historic reforms has delivered a substantial reduction in these subsidies.
In this seminar, the speaker will share findings on the demand-side effects of these reforms on electricity use. The research uses an annual panel covering six consumer groups, 16 regions, and 1992–2015, while controlling for multiple dimensions of fixed effects.
Estimates suggest that subsidy reductions since 2013 have induced quite sizeable electricity savings, especially from industry. Phasing out remaining subsidies has the potential to generate further improvements in the efficiency of electricity use, while freeing up resources for other priorities.