PLN willing to buy power at higher tariff from Sumsel 8 project

State-owned electricity firm PT PLN said it is willing to buy power from the planned Sumsel 8 coal-fired power plant project in South Sumatra at higher tariff to compensate for the higher investment cost resulting from a change in the capacity design.

Bisnis Indonesia quoted PLN Procurement Director Supangkat Iwan Santoso as saying Monday that the state utility is willing to increase the power purchase price by US$0.5 per kWh from the initially agreed price.

Supangkat acknowledged that the change in the capacity design will increase the investment cost required for the power plant project, initially estimated at US$1.6 billion.

PLN has requested IDX-listed PT Bukit Asam Tbk (PTBA) to alter the original design of the Sumsel 8 coal-fired power plant project of 2x620 MW to 4x300 MW to adjust to the existing capacity of transmission lines in South Sumatra.

The request for alteration of the capacity design comes as PLN has decided to cancel an earlier plan to build a 500 kV high voltage direct current (HVDC) transmission line linking Sumatra and Java islands. The transmission line was supposed to allow PTBA to distribute the electricity from the Sumsel 8 project to Java.

PLN and PTBA have been in talks to discuss a revision of an earlier power purchase agreement after PLN canceled the HVDC transmission line project.

Meanwhile, PTBA Corporate Secretary Adib Ubaidillah said his company has yet to officially receive the request from PLN for the change in the capacity design of the Sumsel 8 project. (*)