PLN to pay more for power from 18 IPPs

State utility firm PT Perusahaan Listrik Negara (PLN) has agreed to pay more for electricity it buys from 18 independent power producers (IPPs), The Jakarta Post reported on Tuesday.

The 18 power projects are part of 25 IPP projects that have been delayed due to a lack of funds.

PLN's business and risk management director Murtaqi Syamsuddin said the increase in prices needed the government?s approval.

?The price is adjusted, because the projects were not bankable under the previous prices," Murtaqi said recently.

The 18 power plants are the 20-megawatt (MW) Tanjung Pinang Power Plant, the 14 MW Tanah Grogot Power Plant, the 14 MW Ketapang Power Plant, the 11 MW Pangkalan Bun Power Plant, the 12 MW Lampung Tengah Power Plant, the 12 MW Tanjung Balai Karimun Power Plant, the 12 MW Kalianda Power Plant, the 50 MW Pontianak Power Plant, the 200 MW Jenepono Power Plant, the 12 MW Gorontalo Power Plant, the 11 MW Tembilahan Power Plant, the 11 MW Rengat Power Plant, the 200 MW Kuala Tanjung Power Plant, the 20 Mob Tabu Power Plant, the 10 MW Manippi Power Plant, the 55 MW Kaltim Power Plant, the 200 MW Banjarsari Power Plant and the 225 MW Keban Agung Power Plant.

The 18 power plants have a combined capacity of 1,089 MW and all are coal-fired power plants.

Murtaqi said that rising engineering, procurement and construction (EPC) costs were part of the reason behind the price adjustment. ?Now, the EPC cost is no longer the same as it was in the past,? he said.

Murtaqi refused to offer details about the price increases, saying that PLN was still in negotiations with seven other TPPs.

PLN is the sole distributor of electricity in the country. IPPs are allowed to generate power but must sell the power to PLN. However, the recently passed electricity law will allow private businesses to generate and distribute power.

Implementation of the law is pending three regulations ? on electricity provision businesses, on electricity exports and imports, and on electricity supporting services.

?We expect to issue the three regulations in September,? Sutisna Prawira, the head of legal and public relations at the Energy and Mineral Resources Ministry said.

IPPs contribute about 14 percent of the total 30,000 MW of energy produced in the country. Many of the projects are facing financing difficulties.

The government expects the ratio to increase under the second phase of the 10,000 MW electricity program. Of the total 10,153 MW power expected to be generated from the project, PLN and IPPs are expected to generate 5,118 MW and 5,035 MW, respectively. (*)