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PLN upbeat over 35,000 MW project
State electricity company PLN gave on Tuesday a much-needed public assurance that the country’s 35,000 megawatt (MW) power-generation project would be ready for operation by 2019 as scheduled, rebuffing criticism over the apparently slow progress in the large-scale electrification program
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State electricity company PLN gave on Tuesday a much-needed public assurance that the country’s 35,000 megawatt (MW) power-generation project would be ready for operation by 2019 as scheduled, rebuffing criticism over the apparently slow progress in the large-scale electrification program.
The project is aimed at increasing the nation’s electricity supply, which remains lower than any of its Southeast Asian peers despite being the region’s largest economy. The electrification rate is expected to rise to 97 percent in 2019 from 88.3 percent at present.
As of July, more than a year after the project was launched, Indonesia, however, had only managed to produce an additional 195 MW of electricity, less than 1 percent of the total electricity expected to be added to the current system.
The figure is an increase from 123 MW power plants recorded in March this year. Data also reveal that projects accounting for 8,215 MW are still in the construction stage.
The sluggish progress has been exacerbated by conflict between PLN president director Sofyan Basir and erstwhile energy minister Sudirman Said following disagreements over the execution of the project. Sofyan, known for his loyalty to the President and State-Owned Enterprises Minister Rini Soemarno, rejected a ministerial regulation on the minimum price for electricity produced by micro-hydro power plants, which are owned by many politically wired businesspeople.
Sudirman was ousted during a Cabinet reshuffle last month, replaced by Arcandra Tahar, a long-standing professional in the oil and gas industry.
Despite the current low yields from the project, PLN has maintained that the overall outlook of the project is good.
“The construction process can’t be finished in a matter of months. The big power plant projects can take up to three or four years,” PLN corporate secretary Bambang Dwiyanto told The Jakarta Post on Tuesday.
The current operating power plants under the 35,000 MW project mostly consist of mobile power plants (MPP), including one with 25 MW capacity in Lombok, West Nusa Tenggara. In June, President Joko “Jokowi” Widodo inaugurated a 100-MW gas-fired power plant (PLTG) in Paguat, Gorontalo, the first realization of the mega electrification project.
With the current progress, Bambang was also upbeat over the company’s target to sign contracts for engineering, procurement and construction of power plants with a total production capacity of 6,755 MW of electricity, as well as for the purchasing agreement of 11,730 MW of electricity from independent power producers (IPP).
In terms of pricing issues, PLN is also pinning hopes on new Energy and Mineral Resources Minister Arcandra, who has emphasized the importance of creating an understanding between ministries, institutions and other stakeholders in order to reach the government’s energy goals.
“As the President’s servant, I will secure the 35,000 MW program and resolve any obstacles with other ministries and institutions. I realize that we cannot keep ignoring all the problems between departments. In this situation, admitting that there is a problem is half the solution,” Arcandra said last week.
The government has agreed to back up the project with Rp 13.56 trillion from the revised 2016 state budget this year under the state capital injection (PMN) scheme, in addition to the previous PMN of Rp 10 trillion.
“For the financing of this 35,000 MW project, we will need around Rp 1.1 quadrillion, so we will look to various sources [other than PMN],” Bambang said.
Commenting on PLN and the government’s optimism over the future of the country’s electrification program, General Electric (GE) Indonesia CEO Handry Satriago said that the company would enter tenders for a number of gas-powered plant projects.
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