Project to expand Paiton Power Station to reach full stride

The project to expand the Paiton Thermal Power Station (Paiton III), in which Mitsubishi Heavy Industries, Ltd. (MHI) has received an order for an 815 MW supercritical-pressure coal-fired power generation plant, will now launch full-scale construction work following the signing of a project financing loan agreement, MHI said on Wednesday.

The new power plant, to be delivered to PT Paiton Energy, an independent power producer (IPP) jointly established by companies in Japan, the UK and Indonesia, will be the largest and most efficient coal-fired power plant in Indonesia. It is slated to start a commercial operation in 2012.

The new supercritical-pressure coal-fired power plant will be constructed at a site adjacent to an existing power plant in the Paiton complex, approximately 150 kilometers southeast of Surabaya, the provincial capital of East Java. The new plant is aimed at easing the region's increasingly tight electricity supply. The power generated at the plant will be sold to PT PLN (Persero), Indonesia's state-owned power utility company, for 30 years based on a long-term power purchase agreement (PPA). MHI's Nagasaki Shipyard & Machinery Works will manufacture and supply the steam turbine and boiler. Civil construction work will be undertaken by TOA Corporation of Japan. Mitsui & Co., Ltd. will handle the trade particulars.

On March 8, PT Paiton Energy signed a US$1,215 million project financing agreement with the Japan Bank for International Cooperation (JBIC) and eight commercial banks. Although construction work at the Paiton complex has been already partially started, conclusion of the loan agreement will now accelerate the expansion project, getting construction under way on full scale.

PT Paiton Energy is a special purpose company (SPC) established in Indonesia in 1994. Equity is owned by Mitsui & Co.; IPM Eagle LLP, a joint venture between International Power of the UK and Mitsui & Co. Ltd.; The Tokyo Electric Power Company, Incorporated (TEPCO); and PT Batu Hitam Perkasa of Indonesia.

Supercritical-pressure coal-fired power generation has higher power generation efficiency than subcritical-pressure power generation and is capable of reducing coal consumption relative to power output, which results in lower carbon dioxide (CO2) emissions. (alex)