PLN considering new power plant projects

JAKARTA. State-owned electricity firm PT PLN is considering new mega power plant projects to safeguard electricity supply following delays in the proposed power plant project in Batang, Central Java, expected to be Southeast Asia’s biggest power plant.

PLN president director Nur Pamudji said the company was working on a plan to build power plants with a combined capacity of 2,000 megawatts (MW). “The plants will be in operation by 2018. The plan is being worked on and will be announced when it’s complete,” Pamudji added. He declined to reveal the location of the plants.

According to Pamudji, the plants will be an alternative to the US$4 billion coal-fired power plant project in the Batang regency, work on which was recently suspended.

Prolonged and unresolved land-acquisition problems have led the consortium in charge for the development of the Batang power plant to declare force majeure.

The Batang power plant, which would have a capacity of 2,000 MW and was initially targeted to be completed by 2016, is deemed important particularly for the islands of Java and Bali, which have seen surging electricity demand.

Electricity consumption in Indonesia is estimated to more than double in 10 years to 386 terrawatt hours (TWh) in 2022, compared to 189 TWh in 2013. The average growth between 2013 and 2022 is forecast to be 8.4 percent per year.

Of the total figure, electricity demand in the Java-Bali area is expected to require 275 TWh of power by 2022 from 144 TWh in 2013, with an annual average growth of around 7.6 percent.

The country’s total electricity generation capacity touched 47,128 MW as of the end of last year.

PLN will generate 31.5 gigawatts (GW) of additional capacity for Java-Bali during the 2013-2022 period, or about 3.2 GW per year, according to the company’s electricity procurement plan for the period.

At the national level, an additional power plant capacity of 59.5 GW during 2013 to 2022 is needed across Indonesia to avoid any power crisis. Given the amount, the country should see additional capacity of around six GW per year nationwide.

PLN said earlier that it would need $125 billion in the next 10 years to meet electricity demand across Indonesia, or $12.5 billion per year.

The company, however, is unable to bear the financial burden by itself because it only has a capacity to spend $5 billion per year, according to PLN director for planning Murtaqi Syamsuddin.

PLN has been using external financing to plug the deficit and finance the development projects, including bank loans and bond issues.

However, this has led to concerns about PLN’s financial health due to the rising debt.

The company reported net losses of Rp 29.56 trillion ($2.5 billion) last year due to rising fuel costs and the declining rupiah exchange rate against the US dollar.

Its liabilities amounted to Rp 462 trillion at the end of last year with equity of Rp 133 trillion. (Raras Cahyafitri)