PLN to invest Rp5.9 trillion in 2004
Saturday, December 27 2003 - 12:39 AM WIB
From the Rp5.9 trillion, PLN will allocate Rp2.8 trillion for development of transmission facilities and network and Rp3.1 trillion for improvement in distribution.
This was disclosed by PLN?s director of transmission and distribution Herman Darnel Ibrahim to reporters in Jakarta on Wednesday.
Though the government has not approved PLN?s plan to raise electricity charges in 2004, however, the company is still able to allocate some money for investment.
The target of the investment will be to add around 1.5 million new power consumers so that the company will get additional income of Rp2.5 trillion Further, this will ease the burden on the company?s financial position.
PLN plans to complete the transmission line in the southern sector of Java island to safeguard the power supply to Java and Bali islands. It also received a loan of Rp2 trillion for this project.
Separately, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the investment will increase in the power sector next year.
Purnomo told The Jakarta Post newspaper that the investment was expected to come from independent power producers in line with liberalization in the power sector in 2006.
Private participation in the power sector is expected to help increase power supplies to meet the rising demand. The country is struggling to tackle the looming power crisis caused by the rapid growth of power demand and the lack of new investment in power plants since the economic crisis in 1997.
Demand for electricity now grows at 7 percent annually, higher than the nation's gross domestic product (GDP) growth of about 4 percent.
Total installed capacity is around 21,000 megawatts (MW) with some 18,600 MW located in Java and Bali islands. State power firm PT PLN can only supply between 13,305 to 15,254 of the total capacity after its own use and maintenance, while the peak load could reach between 12,000 MW to 13,250 MW.
This leaves PLN with minimum operating reserves of 143 MW. Ideally, it should have minimum reserves of one big power plant with a capacity of about 600 MW.
Purnomo added next year, the government would set up a regulatory body for the power market that would oversees power sales as stipulated by Electricity Law No. 20/2002.
"It aims to separate players and referee," Purnomo remarked.
The law promotes the liberalization of the power sector by scrapping PLN's monopoly and allowing private companies to invest in the sector.
Starting 2006, under the law, private companies will be allowed to generate power and sell their power directly to the public.
They will also be allowed to set up their own distribution and transmission networks in cooperation with the government or use the state-owned network now operated by PLN to supply their power. (*)