PLN delays construction of gas-fired power plants

Petromindo

State-owned electricity firm PT PLN has decided to delay construction of a number of gas-fired power plants (PLTGs) with combined capacity of 2,000-3,000 MW due to the country?s slower economic growth, Kontan reported on Friday.

The paper quoted PLN President Sofyan Basir as saying that the slower economic growth has also curtailed demand for electricity.

The planned PLTG projects are part of the government?s 35,000 MW program, under which PLN is responsible for developing 10,000 MW of power plants, while independent producers (IPPs) 25,000 MW.

Sofyan said that the 35,000 MW program was designed using an economic growth assumption of 7 percent per year, but the country?s economic growth has now been hovering at only around 5 percent per year, prompting the company to make some adjustments including delaying some of its power plant projects, notably PLTGs. Projects under the 35,000 MW program were supposed to be completed by 2019.

He added that the delay in the development of the PLTGs is also because of the lingering high price of gas. Sofyan, however, did not say which of the PLTG projects will be delayed.

Minister of Finance Sri Mulyani Indrawati earlier suggested PLN to reschedule a number of projects under the 35,000 MW program amid concerns over the utility company?s soaring debt level.

Minister of Energy and Mineral Resources Ignasius Jonan said recently that completion of some of the projects under the 35,000 MW will be delayed particularly due to the slower economic growth. He said that only around 17,000 MW will be completed in 2019, while the remainders to be postponed to 2021, 2022 or 2023. (*)