Govt officially launches power wheeling scheme
Friday, March 6 2015 - 01:15 AM WIB
The Ministry of Energy and Mineral Resources (MEMR) has issued a regulation allowing the usage of available transmission networks by other parties.
The MEMR Regulation No. 1/2015 on Cooperation in the Provision of Electric Power and Joint Utilization of Electric Network allows the existing transmission lines, which are mostly owned by state owned electricity firm PT Perusahaan Listrik Negara (PLN), to be used by other parties.
The practice is known in the industry by the term ?power wheeling?. ?Wheeling? refers to the transfer of electrical power through transmission and distribution lines from one power service area to another's. Wheeling allows power service areas with too much supply to transmit excess power to other utilities with too much demand.
At present, all power companies must sell its power to PLN and have to sign a Power Purchasing Agreement (PPA) with the state firm for the purpose. Such firms are called Independent Power Producers (IPP). With the new regulation, the government wants to promote another type of power business that is Private Power Utility (PPU), which are granted the permit to build power plants in certain power service areas rather signing a PPA with PLN, according to the ministry in a statement.
?With power wheeling having been allowed, I hope industrial areas that need large electricity supply, and have the capability to build their own plants, can now realize their projects,? Director General of Oil and Gas Jarman explained during a coffee morning meeting on Thursday.
Jarman said several industrial areas in Java and Sumatera can build their power plants somewhere else and transmit the electricity using PLN?s grids that already exist.
?The PLN unit that manages the firm?s transmission networks, called P3B, will serve as the regulator body at the moment. I hope in the future the regulator will be an independent body,? Jarman said.
Along the MEMR Regulation No. 1/2015, the ministry also issued two other regulations, namely the MEMR Regulation No. 2/2015 on Rules for Sulawesi Electric System Network containing various rules for Sulawesi grid, and the MEMR No. 3/2015 which obliges PLN to standardize PPA for IPP and direct selection and direct appointment schemes.
Editing by Johannes Simbolon