T

he development of a mega power plant in Batang, Central Java, has stalled after the developer declared force majeure last week, resulting in growing concerns about electricity supply on the densely populated island of Java.

According to a statement released on Monday by PT Adaro Energy, one of the consortium members holding a stake in power-plant developer PT Bhimasena Power Indonesia (BPI), the developer had sent a force majeure notice to its engineering, procurement and construction (EPC) contractors and state-owned electricity company PT PLN largely due to prolonged land-acquisition issues.

'€œThe acquisition of the remaining plots of land is beyond the reasonable ability of a private company like BPI [...] and they can only be acquired with government support,'€ Adaro said in the statement.

The developer has been struggling to acquire land needed for the 2x1,000 megawatt (MW) power plant, which will be the biggest in Southeast Asia and is part of the government'€™s ambitious Master Plan for the Acceleration and Expansion of Indonesia'€™s Economic Development (MP3EI).

It also faces opposition from local residents who they say fear environmental effects resulting from the project.

As much as 85 percent of the 226 hectares needed for the plant has been cleared, while the acquisition of the remainder is in limbo.

The US$4 billion Batang power plant will sell electricity it produces to PLN under a 25-year contract.

BPI, a consortium comprising Jakarta-listed PT Adaro Energy, J-Power Electric Power Development Co. Ltd. and Itochu Corp., won the tender for the Batang project in 2011.

The first stage of commercial operations was initially scheduled for 2016.

Development of the Batang power plant is deemed necessary to secure electricity supply particularly throughout Java in the near future.

Any hold-up in the project could lead to a crisis in electricity supply on the main island.

PLN said earlier that it had recorded the highest electricity peak load in three consecutive months, from April to June this year, in the Java-Bali electricity system. June'€™s peak load reached 23,420 MW.

The June peak load was a 3.8 percent increase on last year'€™s peak load of 22,567 MW.

Energy and Mineral Resources Ministry director general for electricity Jarman said that mitigation measures had been taken to avoid any power-supply crisis.

'€œTo anticipate the delay in the Central Java power plant, we will build a gas-fired power plant in Muara Karang and in Tanjung Priok [both in North Jakarta], each with a capacity of 800 MW, as well as a 400 MW Muara Tawar gas-fired power plant [in Bekasi, West Java],'€ he said.

'€œThere will also be an expansion of 1,000 MW at the Cirebon power plant [in West Java].'€

BPI said it would continue discussions with the remaining land owners to purchase their land and to seek further assistance from the government to resolve the issue.

Last month, Coordinating Economic Minister Chairul Tanjung asked the local administration to resolve the land-acquisition problem before the central government intervened.

'€œWe will ask one more time for the local administrations '€” the governor and the regent '€” to carry out the acquisitions,'€ he said.

'€œIf they cannot do that, the central government will take over by using the Land Acquisition Law, which will become effective on Jan. 1, next year.'€