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Jakarta Post

PLN rolls up sleeves for business revision

State-owned electricity firm PLN is gearing up for the annual revision of its electricity procurement business plan (RUPTL) in order to accommodate changes in the government’s long-term electrification targets

Fedina S. Sundaryani (The Jakarta Post)
Jakarta
Tue, October 18, 2016

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PLN rolls up sleeves for business revision

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tate-owned electricity firm PLN is gearing up for the annual revision of its electricity procurement business plan (RUPTL) in order to accommodate changes in the government’s long-term electrification targets.

The RUPTL is revised every year to match the country’s 10-year electrification plan, which includes the government’s ambitious plan to procure an additional 35,000 megawatt (MW) of electricity by 2019.

PLN is looking to complete the revision early next year and then submit it to the Energy and Mineral Resources Ministry for approval.

PLN procurement director Supangkat Iwan Santoso confirmed that there would be several revisions contained in next year’s business plan, including the volume of electricity sourced from mine-mouth power plants in Kalimantan and Sumatra.

The electricity volume from the power plants is expected to increase after the government issued a revision of a ministerial regulation regarding mine-mouth power plants.

It stipulates that the price of coal from mine-mouth plants will be based on business-to-business negotiations between mining and electricity companies, as opposed to a fixed pricing mechanism previously implemented.

As coal prices becomes negotiable, electricity companies can procure a higher electricity volume. “We only expected to procure up to 7,000 MW of electricity from mine-mouth power plants by 2025,” he said, declining to disclose the new target.

PLN is also still mulling over whether or not to include previously canceled projects in the revised plan, such as the construction of an interisland 500 kilovolt (kV) high-voltage direct current (HVDC) cable between Sumatra and Java.

Although PLN has deemed the project as economically unfeasible, the government has demanded that the company move forward with it.

PLN has also put the Jawa 5 development contract signing on hold, while revising the RUPTL. The company made a controversial decision early this year to cancel the project’s tender and appointed subsidiary Indonesia Power to develop the 2x1,000 MW project.

“The RUPTL greatly affects large power plants. So we will just wait for the development of Jawa 5, it will not be completed by 2019 anyway,” Iwan said.

At the same time, PLN needs to wrap up more than half of development contracts registered under the 35,000 MW-program. The firm has only targeted the completion of 14,069 MW worth of contracts, with power purchase agreements (PPA) making up the bulk of the contracts.

Jarman, the electricity director general at the Energy and Mineral Resources Ministry, said the revised RUPTL must accommodate the country’s growing consumption.

Data from the ministry show that national electricity consumption reached 918 kilowatt hour (kWh) per capita in 2015.

It grew to 943 kWh per capita in the first half and the government expected to see the figure rise to almost 1,000 kWh per capita by the end of the year.

“The RUPTL must be updated to match the growth of demand with that of our power plants, transmission and distribution lines. We have to increase our kWh per capita to reflect our industry’s growth,” Jarman said.

Meanwhile, the Institute for Essential Services Reform (IESR) pushed for more transparency in the revised RUPTL. Executive director Fabby Tumiwa said the 2017 RUPTL must reflect a more honest estimate by PLN on whether the government’s target of a 97 percent electrification rate could be achieved by 2019.

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