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JAKARTA. The government finally revised down the target of electricity projects from 35,000 megawatts (MW) to only 19,763MW, as the economy grows by less than 7%-8%.
The decision was made at the meeting of National Energy Council (DEN) on Monday, 14 November that attendee by Head of DEN Ignasius Jonan, who is also the Minister of Energy and Mineral Resources and the Director General of Electricity.
Member of DEN Renald Dalimi said that the revision was made, as there will be only 19,763MW of the target reach the financial close by the end of December 2016. Whereas, it takes 36 months or three years to complete the projects.
He added that the revision is in line with the assumption of the domestic economic growth, which is only 6%. "99.9% confirmed that the 35,000MW projects will not complete by 2019. There will be 30 incomplete projects," Renaldi added. Out of the 19,763MW, privates will work on the projects of 11,413MW, while the State Electricity Company (PLN) will handle the the rest 8,350 MW.
The Spokesperson of Ministry of Energy and Mineral Resources Sujatmiko said that the needs for the power plants should adapt with the changes in economic assumption. "19.763 MW is the minimum additional power, which is encouraged to operate by 2019," Sujatmiko told KONTAN on Monday (14/11).
Theoretically, the electricity supply should grow at 1.3 times to the economic growth. For an example, the power plants' capacities should increase by 6.5% of the 57,000MW existing capacities to be parallel with a 5% of economic growth.
Presidential Spokesperson Johan Budi SP said that President Joko Widodo has heard about the revision. Johan said that during a limited meeting at the beginning of November the President had instructed Minister of Energy and Mineral Resources to revise down the target of 35,000MW electricity projects.
Johan claimed the the President has heard about the figure of 19,763. "It's realistic", said Johan on Monday (14/11).
However, Chairman of the Association of Private Electricity Companies (APLSI) Arthur Simatupang said that the projects failed to meet the target due to the lack of breakthroughs of PLN. "The licensing was slow, financial close was obstructed, and land acquisitions were also complicated," Arthur said.
Electricity observer Fabby Tumiwa worries that the revision may create a gap of power supplies in 2018-2019, mainly in Kalimantan, Sumatra, and Sulawesi. Fabby said that if the economy grows by 5.5%, the demands for electricity may grow by 7.5%. Therefore, it requires the additional power plants, which have a 4,500MW of power capacity.
The Director of Procurement at PLN Supangkat Iwan Santoso said that the projects of 35,000MW are running, but may incomplete by 2019.
(Muhammad Farid/ Translator)
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