PLN plans to buy additional power supply from independent producers
Thursday, June 8 2006 - 01:23 AM WIB
PLN will sign the agreements next month to buy the additional power, equivalent to about five percentof its production capacity, Purnomo told reporters in Jakarta Tuesday,
The supply will come from 19 new coal-fired plants that are scheduled to start operations in the next three years he said.
The company, hobbled by state-imposed caps on retail fuel prices, lacks the funds to build new plants. The government tuned down PLN?s request to raise power tariffs this year and ordered the utility to build 10,000 megawatts coal-fired power plants in three years and independent power producers another 10,000. megawatts by 2010 to cut dependence on costly oil.
PLN needs an additional Rp 10.7 trillion (US$1.14 billion of state subsidies to cover costs this year after oil prices rose, the country?s Supreme Audit Agency said on March 10.
Indonesia has invited overseas companies to build power plants in the country. A group led by Marubeni Corp., Japan?s fifth-largest trading company by revenue, will build a 600 megawatt plant, the biggest among the projects, in Cirebon in West Java. The power will be sold at 4.36 U.S. cents a kilowatthour, Djuanda Nugraha Ibrahim, acting president director of the state utility said on May 16.
State-owned coal miner PT Tambang Batubara Bukit Asam and two partners will build a 200 megawatts plant in South Sumatra. The smallest power plants, such as those in Papua, Bangka and Belitung province, have a capacity of 14 megawatts each.
Indonesia needs to spend about $27 billion on new plants and power lines by 2012 to meet demand, according to the World Bank. Investment last year totaled $1.2 billion, it said, At least 47 more power stations and 14 high-voltage transmission lines will be required in the next 10 years, PLN estimates. (*)