Government asks PLN to revise power purchase agreements
Thursday, November 16 2017 - 01:37 AM WIB
Petromindo|Khalsa
The Ministry of Energy and Mineral Resources through the Directorate General of Electricity had on November 3 sent a letter to state-owned electricity firm PT PLN asking the utility company to revise power purchase agreements (PPAs) signed with independent power producers (IPPs) on large scale coal-fired power plant (PLTU) projects particularly in Java in a bid to lower the tariff of electricity from the projects, Bisnis Indonesia reported on Wednesday.
The paper said that the ministry wants the tariff to be limited at 85 percent of the regional electricity supply cost (BPP) of PLN where the project is located.
It added that projects to be affected are those which have yet to start construction or have yet to obtain the so-called business feasibility guarantee letter (or SKJU) from the Ministry of Finance.
The paper quoted Director General of Electricity Andy Noorsaman Sommeng as saying that two PLTU projects, namely 2x660 MW PLTU Jawa 3 and 1x1,000 MW PLTU Cirebon expansion, have agreed to revise the PPAs. ?It?s been a deal, the tariff declines,? he said, adding that the IPPs are set to soon sign the revised PPAs.
Meanwhile, Arthur Simatupang, Executive Chairman of the Indonesia Private Power Producers Association (APLSI), said that asking PLN to revise signed PPAs will create new concerns among IPPs. He said that the government must honor power contracts which have been signed. (*)