PLN begins revision of PPA for mine mouth power plants

State-owned electricity firm PT PLN has started revision of power purchase agreements (PPAs) signed with developers of mine mouth power plant projects, Bisnis Indonesia reported on Tuesday.

The paper quoted PLN Procurement Director Supangkat Iwan Santoso said that the revision started this month to adjust the PPAs with the new Minister of Energy and Mineral Resources Decree No 7424 K/30/MEM/2016, which essentially allows PLN to negotiate the price of coal dedicated for mine mouth power plants, instead of based on a fixed price system as set under the previous ministerial decree.

Iwan said that through the revision, PLN hopes to be able to get cheaper coal price from the miners, which are also the developers of the mine mouth power plant projects, in light with the current low coal price environment. The rigid coal price has been a discouraging factor for purchasing electricity from mine mouth power plants.

PLN has so far signed PPAs of mine mouth power plant projects with combined capacity of 2,400 MW. (*)