PLN won?t buy electricity from micro hydro plants in Java

State-owned electricity PT PLN said it will not buy electricity from micro hydro power plants projects in Java developed by private power companies if the selling price remains as high as set in the current regulation.

Kontan quoted Head of Corporate Communications Division at PLN, I Made Suprateka as saying Thursday that the feed-in tariff of electricity produced from renewable-based power plants such as micro hydro should be only applied for projects in eastern part of Indonesia, where electricity supply is seriously lacking, not in more developed regions of Java and Sumatra.

He said that if private power companies want to develop micro hydro power plants in Java, they should sell the electricity to PLN at feed-in tariff of between Rp 900 and Rp 1,000 per kWh to as not to exceed the price of electricity sold by PLN to its customers.

He cited as an example that PLN has rejected a proposal to buy electricity from a micro hydro power plant developed by a private power firm in West Java using the fee-in tariff set under the current Minister of Energy and Mineral Resources Regulation 19/2015, which sets the fee-in tariff of micro hydro power plants at between 9 US cents per kWh and 14.4 US cents per kWh.

Suprateka said that PLN supports the ministry?s plan to revise the feed-in tariff policy of renewable-based power plants.

Meanwhile, Kontan quoted Head of Micro Hydro Power Plant Developers Association, Riza Husni as saying that it would be difficult for the developers to lower the feed-in tariff as the interest rate charged by banks on loans for the projects are also high. He added that low feed-in tariff would not entice banks to finance micro hydro power plant projects. (*)