Minister demands PLN to follow regulation on micro hydro power plant tariff

Minister of Energy and Mineral Resources Sudirman Said reiterated calls on Tuesday for state-owned electricity firm PT PLN to follow the existing ministerial regulation regarding tariff of electricity purchased from micro hydro power plants with capacity of less than 10 MW.

Sudirman said that PLN must revoke its policy which sets the electricity purchase tariff at 0.07-0.08 cents per kWh, lower than the 0.09-0.12 per Kwh price range set under Ministerial Regulation No 19/2015.

The minister said that the ministerial regulation was aimed at luring fresh investment into the micro hydro power plant sector, and would not cause serious losses for PLN as it would only be applied for micro hydro power plants with capacity of less than 10 MW. He pointed out that total capacity of micro hydro power plants in the country is only about 78 MW, or a mere 0.125 percent of the company?s total installed power capacity.

PLN has said that if the company is forced to follow the ministerial regulation, it would have to shoulder losses as its selling price becomes lower than the power purchase price. The ministry has previously said it would provide subsidy for PLN, but apparently the latter is not quite confident about the promise. (*)