Hydro power plant projects suspended due to unfavorable tariff ruling

Private power company PT Klaai Dendan Lestari has decided to put on hold its planned two micro hydro power plant projects in Bengkulu Province with combined capacity of 6 MW following the recent introduction of what it described as unfavorable power tariff ruling, Kontan reported on Saturday.

The paper quoted Yogi Adhi Satria, a Director at the company, as saying that Minister of Energy and Mineral Resources Ignasius Jonan must reevaluate the recently-introduced Ministerial Regulation No 12/2017, which sets tariff of electricity from renewable-based power plant projects to be sold to state-owned electricity firm PT PLN at maximum 85 percent of the regional electricity supply cost (or BPP) of PLN where the project is located.

Yogi said that the new tariff ruling will make the two mini hydro power plant projects of the company to be no longer economically feasible. He pointed out that the new tariff ruling will lower the tariff of electricity from the projects to around Rp 900 per kWh, compared to the estimated Rp 1,500-Rp 1,600 per kWh allowed under the previous tariff policy.

He said that the company is currently adopting a ?wait and see? approach in the hope that the minister will revise the new controversial tariff policy, which has also been protested by other industry players. (*)