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Indonesian automation market soars with power sector growth

Posted: 04 Mar 2015 ?? ?Print Version ?Bookmark and Share

Keywords:renewable energy? automation and control market? oil imports? smart cities?

Indonesia's growing economy has led to a growth in demand for products and services of key industries such as power and infrastructure sectors. This rise in demand has then resulted in the need for automation and control systems to maximise capacity utilisation, thus eliminating or reducing wastage.

A new Frost & Sullivan study, The Indonesian Automation and Control Market, shows that the market earned revenues of $175.6 million in 2014 and estimates this to reach $239.1 million in 2018. The research covers the programmable logic controllers (PLC), supervisory control and data acquisition (SCADA), distributed control systems (DCS), human machine interface (HMI), and safety systems product segments for various end-user industries such as oil and gas, power, water and wastewater, chemicals and petrochemicals, food and beverage, and mining and metals.

The renewable energy sector, which is forecast to meet over 30 per cent of Indonesia's energy needs in 2050, is a lucrative space for automation vendors. In order to reduce costs due to oil imports, the government has started to raise fuel and power prices and institute financial incentives to promote the development of alternative sources of energy, indicating the vast potential this sector has to offer for automation vendors in the country.

"Strong opportunities will emerge for automation vendors, with robust regulatory practices and a focus on smart cities set to make geothermal energy the largest renewable energy source," said Frost & Sullivan Industrial Automation & Process Control Research Analyst Krishnan Ramanathan. "As geothermal energy grows in popularity, automation and control systems will be required for effective asset management and the protection of green energy investment."

The power industry will also significantly impact the development of the automation industry in Indonesia, with the government's plans to boost the installed capacity from 1,340MW in early 2014 to 6,500MW by 2025. As renewable energy can bring off-grid power to households that have no access to electricity or rely on costlier options, it will play an important role in meeting the country's power requirements and drive the need for automation and control systems.

"Additionally, the Indonesian government expects the infrastructure, manufacturing and mining sectors to continue to attract investments and fuel the demand for automation and control systems," noted Ramanathan. "While there is uncertainty surrounding several regulations and a lack of coordination between the central, provincial and regional governments to improve the investment climate in the mining industry, companies are unlikely to be discouraged by this and will adopt automation and control systems."

The Indonesian Automation and Control Market is part of the Industrial Automation & Process Control Growth Partnership Service programme. Frost & Sullivan's related studies include Automation and Control Market in Malaysia, Automation & Control Market in Thailand, Automation & Control Market in the Philippines, and Automation & Control Market in Laos, Cambodia, and Myanmar.

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