PLN to Open Bids For 83 Power Plants

The Jakarta Globe, Reva Sasistiya, January 16, 2009 

State electric utility company PT Perusahaan Listrik Negara, or PLN, will open tenders in February for a second “fast-track” program to build 83 power plants that would supply a total of more than 10,000 megawatts to the national grid by 2014, a PLN official said on Thursday. 

The first construction tender would be for a $2.57 billion coal-fired plant in Pemalang, Central Java Province, with a 2,000 MW capacity, Bambang Praptono, PLN’s director of planning and strategy, said. 

“Some major companies have shown interest, including Japan’s Marubeni Corp., German’s Siemens Corp. and France’s Areva,” Bambang said. 

Indonesia desperately needs additional generation capacity to deal with the frequent blackouts brought about by PLN’s low reserve margin of 20 percent, the amount by which capacity exceeds maximum demand. 

PLN wants independent power producers to supply a majority of the planned additional capacity, said Jacobus Purwono, the Ministry of Energy’s director general of electricity. PLN expects to handle only 30 percent of the new capacity. 

“We want IPPs to take the lead in the second fast-track program,” Purwono said. 

The project is expected to be completed in 2014, with a total installed capacity of 11,144 MW, 68 percent of which would be provided by coal, 19 percent from geothermal sources, 10 percent from gas and hydropower for the rest. PLN said 18 plants would be in Java, while the rest would be spread across Indonesia. 

PLN’s first fast-track program began in 2006 with total expected construction costs of $4.5 billion. The program is expected to provide an additional 10,000 MW of capacity when it goes online in 2010. PLN said total capital expenditures for 2009 may reach Rp 46.37 trillion ($4.17 billion). 

Previously, 152 IPPs had shown interest in the program, but only 16 successfully obtained funding. Purwono said the government had yet to decide on whether it was going to guarantee loans used to fund the construction of private power plants . 

Indonesia’s electricity demand has been growing at an annual rate of about 7 percent for the past five years and is expected to rise to 9 percent per year over the next decade. Of the total installed capacity of 29,422 MW, PLN supplies 85.7 percent and 16 IPPs contribute the rest.