Edison may expand Paiton I power plant: Report
Wednesday, July 16 2003 - 08:42 AM WIB
PT Perusahaan Listrik Negara, Indonesia?s state utility, has held initial talks with Edison about adding capacity at the East Java site, said Robert Driscoll, senior vice president of Edison Mission Energy Asia Pacific, in an interview.
Edison's Indonesian unit last year agreed to cut power charges to PLN by 41 percent, ending a four-year row that stalled development of the plant. Indonesia is counting on investment by international companies such as Edison to help spur an economic recovery.
?As part of the deal, we have agreed with our partners in Paiton to assess the building of new capacity," said Driscoll. ?There are a number of options. We're in the early planning stages of looking at this.? He said it was too early to say how much the company would spend on the expansion.
Paiton I has capacity to house two additional 400-megawatt coal-fired generators out of a total of eight planned by the plant's owners. The plant's other owners include GE Capital Corp. and Mitsui & Co.
The plant needs $1,000 for each additional kilowatt, PLN President Director Eddie Widiono said last year. Units 1, 2, 5, 6, 7, and 8 currently in operation.
?There's the footprint for units three and four -- a site left empty for future expansion, and PLN has asked us to see what sort of option there might be for those units,? Driscoll said.
The dispute between PLN and Paiton raised concern investors may stay away from Indonesia. Southeast Asia's biggest economy is counting on foreign investments to meet the 4 percent growth the government is projecting for 2003. Foreign investments dropped 35 percent in 2002 to a nine-year low.
?The investment climate is clearly improving,? Driscoll said. ?The country has performed very well on the macro economic indicators, debt is down and the economy is growing again.?
The Indonesian government approved $4.37 billion of foreign investment in the six months ended June 30, up from $3.04 billion during the same period last year. The nation's economy grew 3.56 percent in the second quarter from a year earlier.
Electricity demand in Indonesia is rising by as much as 9 percent a year, "which is very robust," Driscoll said.
"With the positive signs in the Indonesian economy right now, there's going to be a rapid rate of growth for power in the country," he said.
Shares of Edison International, based in Rosemead, California, dropped 22 cents to $16.28 in New York Stock Exchange composite trading yesterday. (*)