T

he United States will take part in the Indonesian government'€™s 35,000 megawatt (MW) power plant construction program. American companies will focus on developing environmentally friendly power generation facilities.

The US intention to participate in the project was illustrated by the signing of a memorandum of understanding between Energy and Mineral Resources Minister Sudirman Said and US Ambassador to Indonesia Robert O. Blake Jr. on Wednesday.

'€œThe government will give US companies the opportunity to support the 35,000 MW program, and we will particularly encourage US companies to develop new and renewable energy power generation. This is a government-to-government deal and it will be followed by a business-to-business deal with PLN,'€ Sudirman said, referring to the state-owned electricity company, PLN.

Meanwhile, Blake said that a working group had been setup following the agreement. It comprised representatives from 52 US companies and 11 US government agencies. The working group will seek solutions for Indonesia'€™s energy needs alongside PLN.

The ambassador said that building power plants that were generated by new and renewable energy would be the prime focus of the American firms.

'€œAmerican companies are recognized as among the very best in the world, like GE and so many other companies. Many renewable energy companies are also here to help Indonesia meet its objective to have 25 percent of its power from renewable resources by 2025,'€ Blake added.

The 35,000 MW power plant project is one of President Joko '€œJokowi'€ Widodo'€™s programs to maintain and create sustainable economic growth in the near future.

Out of the total 35,000 MW, as much as approximately 20,000 MW are expected to come from coal fired power plants, 13,000 MW from gas fired power plants and the remaining 2,000 MW are set to be generated by new and renewable resources.

With around 240 million people, Indonesia currently has a power generation capacity of 53,535 MW and an electrification ratio of 86.4 percent on average nationwide.

However, several areas have far lower electrification ratios and find themselves in a power crisis as demand keeps growing while new power plant developments are delayed due to various issues ranging from land acquisition to financing problems.

Java and Bali are expected to confront a power crisis over the next few years if the government fails to solve and speed up several big projects, such as the coal-fired power plant in Batang, Central Java.

Despite the need for new power supply, doubts have been increasing lately on Indonesia'€™s ability to provide 35,000 MW as planned, particularly given the fact that the country has failed to meet similar yet smaller-sized projects in the past.

PLN director for procurement and primary energy Amin Subekti confirmed that his office had secured a 682 MW power plant project to be fueled by new and renewable energy.

Meanwhile, the state electricity company has also secured contracts for the construction of a gas fired power plant with a total capacity of 550 MW.

Tenders for more new and renewable power plant projects inside the 35,000 MW program are still being planned.

'€œUS companies are unlikely to enter the coal power plant section but will take the gas as well as new and renewable energy plants. This means that there are still many opportunities for them [US firms],'€ Amin said.

PLN has been requested to build a 10,000 MW power plant from the 35,000 MW total to be generated. However, after recent discussions, the portion of development to be undertaken PLN is set to be reduced to around 5,000 MW as part of an attempt to reduce the burden on the state own firm.

The remaining portions are expected to be filled from private independent producers. Under the scheme, the private firms will establish the power plants and sell the power produced to PLN, which will then deliver the electricity to consumers.