PLN hopes to conclude review of PLTU Jawa-3 contract in December
Friday, December 1 2017 - 02:02 AM WIB
Petromindo
State-owned electricity firm PT PLN hopes to be able conclude an ongoing review of its power purchase agreement (PPA) for the planned 1,200 MW PLTU Jawa-3 coal-fired power plant project in December of this year in a bid to seek for lower tariff of electricity to be produced by the plant.
PLN Director of Strategic Procurement 2, Supangkat Iwan Santoso said on Thursday that the state utility firm is currently still in negotiation talks with project owner, PT Bakrie Power and Malaysia?s YTL Power International.
?(Review of) Jawa-3 (PPA) is still in progress, hopefully it could be concluded in December,? he said.
The move comes following a November 3 request by the Director General of Electricity at the Ministry of Energy and Mineral Resources Andy Noorsaman Sommeng for PLN to review PPAs of large scale coal-fired power plant projects in Java which have yet to start construction or have yet to obtain the business feasibility guarantee letter (or SKJU) from the Ministry of Finance, in a bid to bring down the tariff of electricity from the power plant projects and to help provide affordable electricity tariff for the end consumers.
PLN has so far managed to renegotiate the tariff of electricity from the PLTU Cirebon expansion project (1,000 MW), bringing down the tariff to 5.5 US cents per kWh from more than 6 cents per kWh as set under the previous PPA signed by PLN and project owner PT Cirebon Energi Prasarana.
PLN has said it will press ahead with reviewing PPAs of other PLTU projects with ?excessive tariff? in a bid to lower the tariff despite strong criticism primarily from the Indonesian Private Power Producers Association (APLSI), who said that the move would undermine investment climate in the power sector. Coordinating Minister for Maritime Affairs Luhut Pandjaitan, who oversees the Ministry of Energy and Mineral Resources, has also opposed the PPA review policy.
PLN President Director Sofyan Basir has previously said that PLN will not purchase electricity from projects with excessive tariffs and is willing to pay the penalty.
Editing by Reiner Simanjuntak