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Jakarta Post

PLN to spend $22.5 billion on power plants

  • Khoirul Amin

    The Jakarta Post

Jakarta   /   Tue, November 4, 2014   /  08:30 am

State-owned electricity company PT Perusahaan Listrik Negara (PLN) has announced plans to spend around US$22.5 billion to participate in the construction of 35,000-megawatt (MW) power plants, a project initiated by President Joko '€œJokowi'€ Widodo to provide sufficient electricity to the whole nation.

PLN president director Nur Pamudji said on Monday that his firm would help to finance the construction of 15,000-MW plants .

'€œWe estimate that construction will cost around $1.5 million for every megawatt,'€ he said after a closed-door meeting at the State-Owned Enterprises Ministry.

The construction of the remaining 20,000 MW would be undergone by independent power producers (IPP), he explained.

Nur refused to elaborate on where the funds would come from, but he revealed that the groundbreaking mega-project would begin next year.

Coordinating Economic Minister Sofyan Djalil said last Friday that the government aimed to build a number of 35,000-MW power plants over the next five years.

'€œJokowi'€™s administration wants to safeguard the country'€™s electricity supply. Currently, power plants in operation have a capacity of only 40,000 MW in total,'€ he said, adding that the figure was still far below the total capacity of Chinese power plants, which stands at 1.2 million MW.

According to PLN data, the country'€™s total electricity generation capacity reached 47,128 MW as of the end of last year.

Electricity consumption in Indonesia is expected to hit 386 terawatt hours (TWh) in 2020, more than double the 189 TWh consumed last year. Average growth per year between 2013 and 2022 is forecast to reach 8.4 percent.

Electricity demand in Java and Bali is expected to reach 275 TWh of power by 2022 from 144 TWh last year, with an annual average growth of around 7.6 percent.

PLN, meanwhile, will generate 31.5 gigawatts (GW) of additional power for Java and Bali during the 2013-2022 period, or around 3.2 GW per year, according to the company'€™s electricity procurement plan for the nine-year period.

An additional power plant capacity of 59.5 GW over the period is needed across Indonesia to avoid power crises, an additional capacity of around six GW per year nationwide.

Nur explained that for the 35,000-MW project alone, PLN and the selected IPP would mostly construct steam-fueled power plants (PLTU) as well as a number of hydro power plants (PLTA).

The construction of PLTU usually takes five years, while the time needed for the construction of PLTA depends on the site, with construction on the most difficult sites taking seven years on average.

However, building a power plant may be a daunting task for PLN, which has run into difficulties with the Batang PLTU project in Central Java.

The development of the two 1,000-MW Batang power plants has seen no progress in the last three years, with the state electricity firm facing firm opposition from local residents unwilling to sell their land to the government.

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