Update 1: PLN signs PPA with Tanjung Kasam on Batam's power plant
Thursday, August 31 2006 - 10:22 AM WIB
State owned electricity firm PT Perusahaan Listrik Negara (PLN) signed on Thursday a deal to purchase power from a coal-fired power plant that will be built by PT Tanjung Kasam Power (TKP).
President of PLN Batam Ery Ifyandri said on Thursday under the 30-year power purchase agreement (PPA), TKP would build two power units each the capacity of 55 Megawatt (MW) at the Tanjung Kasam power plant in Batam.
PLN, as an offtaker, will purchase power from the plant at Rp 424 per kilowatthour (KwH) on the assumptions that the dollar is valued at Rp 9,000 and coal is priced at US$25 per ton.
?The price has been agreed upon by the Minister of Energy and Mineral Resources,? Ery said following the ceremony to sign the PPA.
The PPA was signed by Ery and and TKP?s president Binarto Bekti Mahardjana.
The power plant is expected to start operation on March 31, 2009 for the first unit and on June 30, 2009 for the second unit.
The power plant will be constructed by China?s Dong Fang Electric Corporation, which won the engineering, procurement and construction contract (EPC) of the US$96.99 million power plant. The EPC contract was signed by Dong Fang International?s president Iwo Zhiqang and TKP?s president Binarto during the occasion.
The power plant will be fed with coal with calorie content of between 4,700 and 4,800 kcal/kg that will be supplied by Kideco. The firm is expected to supply 30,000 tons of coal to the power plant per month once it starts operation in 2009.
TKP is owned PT Petra Unggul Sejahtera, a subsidiary of Intraco Penta Group. Petra Unggul?s president Petrus Halim said the funds for the development of the power plant would be provided by a syndication of local banks led by BNI.
?We are in the phase of finalizing agreement (with the banks),? Petrus said.
Batam, the country?s most developed industrial region, is being supplied with power from power plants owned by PLN and PT Medco Energi Inernational. PLN operates 10 diesel power plants with a combined capacity of $138.54 MW, while Medco has two gas-fired power plant with two units each with the capacity of 55 MW in Panaran.
PLN is scrapping its diesel power plants one by one as the operation cost of such power plants is too high given the expensive oil price.
PLN?s generation and energy director Ali Herman Ibrahim said the PPA with TKP was first expected to be signed in 2004. The delay in the signing of the PPA had made PLN to lose the opportunity of saving fuel cost amounting to Rp 905 billion.
Ery said aside from cutting cost, the Tanjung Kasam will strengthen security of power supply on the island where power demands continue to grow.
?Now, the peak demand (in Batam) is 165 MW. We expect it will increase to 180 MW this year. Normally, power demand on the island grow between 15% and 16%. Once the island becomes a special economic zone, the growth rate could reach 20%,? Ery said. (Godang)