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tate-owned electricity firm PLN is aiming to wrap up negotiations with a number of private power plant developers and sign power purchase agreements (PPA) amounting to 3,000 megawatts (MW) by the end of next month.

'€œWe have signed [agreements for] 1,000 MW and are expecting to see an additional 2,000 MW by the end of the first half,'€ PLN director for procurement and primary energy Amin Subekti said.

Earlier this month, PLN signed a number of power purchase agreements with private power plant developers, including a 50 MW wind power plant in Samas, Yogyakarta; a 2X50 MW Kendari-3 coal-fired power plant in Southeast Sulawesi; a 2x125 MW Jeneponto expansion power plant in South Sulawesi; and a 2x45 MW Malea power plant in South Sulawesi.

By the end of this year, PLN is looking to secure 10,000 MW in power purchase agreements.

To realize the target, the electricity company is offering numerous power plant development projects through an open bidding process. It is also focusing on pricing negotiations with companies working on power plant expansion projects.

'€œWe are prioritizing expansion projects because they will be easier to follow up. In these projects, the land is available, the players are experienced and have exposure to banks [for funding] and they have advanced technology as well,'€ he said.

PLN'€™s moves are part of the government ambitious program to gain an additional 35,000 MW in electricity capacity by 2019. The country'€™s existing power capacity is around 53,000 MW.

Of the total 35,000 MW projects, PLN is planning to develop its own power plant with a total capacity of about 10,000 MW. Meanwhile, the remaining 25,000 MW power plants are expected to be developed by independent power producers (IPPs).

The portion of power plant development by IPPs will be bigger than the portion to be developed by PLN, as the state-owned company has limited financial capability to finance all of the projects, which are expected to reach Rp 814 trillion. With the shared development scheme, the 25,000 MW projects by IPPs will cost Rp 615 trillion, while PLN'€™s 10.000 MW projects will need Rp 199 trillion in investment.

Of the total projected 35,000 MW, around 20,000 MW will come from coal-fired plants. Meanwhile, around 13,000 MW will be sourced from gas-powered plants.

In order to ensure the availability of the energy source to feed power plants, the government has been calling for a greater domestic market allocation of coal. Indonesia is currently a major exporter of coal, particularly the thermal coal that is used to generate power.

Last year, the country'€™s total coal production reached 458 million tons. Of the total output, 382 million tons were sent abroad.

The government has also been calling for gas producers in the country to increase their supply to the domestic market.

Earlier this month, state-owned oil and gas firm Pertamina and PLN signed a heads of agreement on the usage of 100 million standard cubic feet per day (mmscfd) from the Jambaran-Tiung Biru-Cendana fields to supply the power firm'€™s power plant.

'€œJambaran-Tiung Biru-Cendana'€™s production is projected to begin in 2018. The gas allocation will be delivered to PLN,'€ Pertamina president director Dwi Soetjipto said.

Several other gas-selling agreements have also been signed by PLN with private firms, including with ConocoPhillips (Grissik) Ltd. for a three-year contract and with Petroselat with a five-year contract.