PLN to be allowed to determine prices for power supply from IPPs
Wednesday, January 28 2009 - 01:08 AM WIB
Director General of Electricity and Energy Utilization at the Energy and Mineral Resources Ministry. J. Purwono, said in Jakarta on Tuesday that the new electricity pricing policy would be part of a new regulation which would be soon issued by the ministry.
He said that the new ruling would cover all aspects related to the pricing of electricity supply from IPPs which would include the government?s regulations on the pricing of power supply from coal-fired, hydro and geothermal power plants.
At present, the prices of power supply from IPPs are determined by the government. The prices of the electricity supply from coal-fired power plants are, for example, fixed at a range between 4.25 and 4.95 US cent per kWh.
However, the existing pricing policy has discouraged private investors from building power plants in the country because they consider the price range determined by the government are often too low to offset production costs.
According to PLN, the ideal price is between 7.0 and 8.0 cent per kWh for the electricity supply from geothermal power plants, between 5.0 and 6.0 cent for those produced by hydro-power plants and between 5.8 and 7.0 cent for those provided by coal-fired power plants.
PLN?s president director Fahmi Mochtar said that the new pricing policy would be applied on power plants to be built under the second stage of the government?s fast track program and IPPs project.
PLN is expected to launch the tender for the construction of power plants under the second stage of the fast track program in April. The company hopes to be able generate additional power supply of 6,400 megawatt under the program, which would cost about $13.5 billion.
The company is currently completing the first stage of the fast track program which would provide additional supply of about 10,000 megawatt. (bernard)