CEP to build 1,000 MW coal-fired plant next year

Cirebon Electric Power (CEP) partly owned by Japanese and South Korean conglomerates, plans to start the construction of its second power plant, which will provide an additional power supply of 1,000 megawatts (MW) from its power plant complex in Cirebon, West Java, next year, The Jakarta Post reported Wednesday

CEP director Heru Dewanto said in Jakarta on Tuesday that the new coal-fired power plant would he an expansion of the company?s first power plant, which has already provided electricity supply of up to 660 MW since mid 2013 to the Bali and Java power grid.

Heru told reporters on Tuesday that the new power plant was expected to start supplying electricity by 2018, with construction estimated to take four years. Therefore, we plan to start construction next year," he said.

CEP signed a 30-year power purchase agreement (PPA) with state-owned electricity company Perusahaan Listrik Negara (PLN), in August 2007.

CEP spent US$850 million to finance the construction of the existing 660-MW coal-fired power plant, which began in 2008. The plant was initially expected to start commercial operations in October last year. However, due to some technical problems, including protests from the community in relation to its land acquisition permit, the plant only started operating in July this year.

The 1,000-MW power plant, on the other hand, will cost US$2 billion.

Earlier this year, PLN announced that the electricity supply for Java and Bali was 22,900 MW while demand in the region was 35,000 MW or 35 percent more than its capacity.

PLN will buy the electricity from the power plant for 4.43 US cents per kilowatt-hour, under an independent power producer mechanism.

However, Heru said that the price for the new power plant had yet to be defined, adding that CEP has not started discussions with PLN on the matter.

CEP, which is one of the independent power producers (IPPs) in Indonesia, is a joint venture between four companies, with Japan-based Marubeni Corporation owning the biggest stake of 32.5 percent, followed by Korea Midland Power Co., which owns a 27.5 percent stake in the firm.

The other shareholders include South Korean company Samtan Co. Ltd. and Indonesia?s publicly listed PT Indika Energy, both own 20 percent.(*)