New minister meets with PLN to speed up 35GW power plant projects
Monday, August 8 2016 - 03:24 AM WIB
Recently-appointed Minister of Energy and Mineral Resources Arcandra Tahar made his first working visit to state-owned electricity firm PT PLN on Saturday, meeting with the top officials of the utility discussing among others progress of the planned 35,000 MW power plant projects.
Emerging after the meeting, Alihuddin Sitompul, Director of Electricity Development Program at the ministry, said that the minister wants to make sure that the 35,000 MW power plant projects can be realized.
President Joko Widodo has set a target for the power plant projects to be realized by 2019.
Alihuddin said that to help speed up the realization of the power plant projects, the minister has instructed PLN to complete power purchase agreements (PPAs) with the independent power producers (IPPs) developing the plants by this year. The bulk of the 35,000 MW power plant projects (about 25,000 MW) will be developed by the IPPs, while the remainders by PLN. The signing of the PPAs will help pave the way for the IPPs to get financial closing of the projects.
Alihudin said that the minister wants all regulations hampering the projects must be resolved including with regards to the lengthy process of signing the PPAs. ?All problems hampering the projects must be eliminated,? Alihuddin said.
As of August of this year, PLN has only signed PPAs for 8,450 MW power plant projects of the total 17,000 MW projects whose tender process has been completed. Of the projects whose PPAs have been signed, 8,361 MW have entered construction stage. PLN plans to hold tender this year for the remaining 18,000 MW.
Alihuddin said that the minister also discussed other issues including pricing formula of coal for mine mouth power plant projects, and the controversial high voltage direct current transmission line linking Java and Sumatra, which has been previously opposed by PLN, but is necessary to realize a number of major coal-fired power plants in Sumatra by IPPs.
Meanwhile, Satya W. Yudha, member of the House of Representatives Commission VII on energy and mining, urged on Sunday Minister Arcandra to make sure that the planned 35,000 MW power plant projects can be realized to meet growing electricity demand and help accelerate economic growth in the country.
He said that the government must quickly resolve lingering obstacles such as difficulties in land acquisition process to attract investors into the power plant projects.
Editing by Reiner Simanjuntak