PLN needs additional power supply of 16,539 MW by 2010

State owned electricity company, PLN, needs an additional power supply of 16,539 Megawatts to meet the surge in the new electric demand during the period between 2004 and 2010, PLN?s president Eddie Widjono said.

Speaking at a meeting with the company?s customers in Jakarta on Thursday, Eddie said that the additional power supply should be gradually added to PLN?s transmission networks beginning 2004 during which the existing supply would no longer be able to meet the demand.

?In short-term, the supply is still relatively enough to meet the demand, although in some parts of areas there are an acute shortage in the power supply,? he was quoted as saying by Neraca daily on Friday.

Eddie estimated that the power demand would reach an average of 9.1 percent during the period between 2000 and 2003. ?If there is a failure in meeting the electricity demand, it will certainly hurt the process of the economic recovery,? he added.

According to him, foreign investors are still reluctant to enter the country?s power sector due to the lack of incentives provided for them. The low power rates at home is also one of handicaps in the development of new power plants.

He said that to make investment in the power sector more attractive, the power tariff should be increased to at least 7 U.S. cent per kWh.

At present, PLN buys its power from independent power producers at Rp 530 (about 5 U.S. cent) per kWh and sells it at about Rp 300 per kWh. This has resulted in a great loss to the electricity company.

?If the electricity output reaches 79.2 billion kWh, PLN will suffer a deficit of about Rp 19.5 trillion in its revenues,? he added. (*)