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PLN's scramble becoming Jokowi's political liability
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State power producer PLN has been getting a lot of media coverage in the last few weeks, and for all the wrong reasons: falling profits, unwise investments in under-used and unneeded power plants and a balance sheet which is threatening the state’s own financial health. (JP/Bangkit Jaya Putra)
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tate power producer PLN has been getting a lot of media coverage in the last few weeks, and for all the wrong reasons: falling profits, unwise investments in under-used and unneeded power plants and a balance sheet which is threatening the state’s own financial health.
The finance minister voiced her concern again last month that PLN could undermine Indonesia’s “national reputation.”
Now the Energy and Mineral Resources Ministry has asked PLN to review its agreements with private developers of coal power plants in Java which, it’s increasingly clear, are not needed.
Ever since leaked letters from the finance minister exposed PLN’s piling debt and overcapacity planning, the electricity operator has been backed into a corner.
But rather than cancelling the unneeded coal power projects, PLN has said it will simply delay the inevitable overcapacity to 2029, which just sweeps the problem under the carpet. It does not deal with it.
PLN is now trying to create a market for the power, by raising household capacity to 5500 VA to push up demand: essentially forcing consumers to pay for its misguided splurge on new coal plants.
The current request to review PPA projects gives PLN an opportunity to discontinue new unneeded coal projects.
