PTBA, PLN sign Sumsel-8 PPA amendment

By Tri Subhki R

Petromindo|Tri Subhki

IDX-listed coal mining and energy company PT Bukit Asam Tbk (PTBA), through its subsidiary company PT Huadian Bukit Asam Power (HBAP), and state-owned electricity firm PT PLN signed on Thursday amendment to the power purchase agreement (PPA) of a 2?620 MW Sumsel-8 mine mouth coal-fired power plant project in South Sumatra Province.

"The amendment means more efficient investment and benefits both PTBA and PLN" PTBA's President Director Arviyan Arifin said.

Under the amendment, PLN agrees to buy electricity from the Sumsel-8 power plant at 4.79 US cents per kWh, or lower than the 5 cents per kWh tariff set under the previous PPA.

The construction of the Sumsel-8 project is expected to start in the first half of 2018, and will take 42 months to complete the Unit 1, and 45 months for Unit 2.

The commercial operation date (COD) is expected to be in 2021 for Unit 1 and 2022 for Unit 2.

Sumsel-8, part of the government?s 35,000 MW program, is developed by HBAP, an independent power producer (IPP) jointly owned by PTBA and China Huadian Hongkong Company Ltd.

The PPA amendment changes some of the initial plans set under the previous PPA. First, the electricity generated from Sumsel-8 will be delivered to Sumatra power grid by 500 kV extra high voltage transmission line. The initial plan was that the electricity would be delivered to Java grid by undersea high voltage direct current (HVDC) transmission line.

Another change is that HBAP will build 45 kilometers long transmission line from Sumsel-8 to PLN's substation in Muara Enim. PTBA needs US$1.7 billion total investment to build the power plant.

PTBA will also use different power generation technology for Sumsel-8 due to the PPA amendment. Previously, the company would apply sub-critical technology but after the amendment it will use the more efficient and environmentally friendly super-critical boiler technology.

"By using new technology, our coal consumption will be lower from 5.3 million tons per year to 5 million tons," Arviyan said.

Editing by Reiner Simanjuntak