ASEAN KEY DESTINATIONS
RI needs Rp 200t a year to meet rising power demand
Indonesia will need at least Rp 200 trillion (US$16.48 billion) in new investments a year in order to meet its long-term demand for power, which is expected to double to 10,000 megawatts (MW) a year within the next 15 years, a senior official of the Energy and Mineral Resources Ministry said.
Energy and Mineral Resources deputy minister Susilo Siswoutomo said on Wednesday that the additional power supply needed by Indonesia to support its economic growth was projected to reach 5,700 MW a year until 2022.
In a longer term view, the annual additional power supply needed would double to 10,000 MW per year from this year until 2030, as the growth in demand after 2022 will be far higher, he said.
He pointed out that the need for additional power supplies was estimated to reach 240,000 MW by 2030, meaning that Indonesia would need an additional production capacity of more than 10,000 MW a year. Current installed electrical generation capacity is around 50,000 MW.
“If we calculate that one MW means $2 million in investment, we will need more than Rp 200 trillion per year,” Susilo said in a keynote speech for an event celebrating National Electricity Day.
Given the massive investment, Susilo said, the country would need more private players as state-owned electricity firm PT Perusahaan Listrik Negara (PLN) has limited capacity.
Additional power need predicted to reach 5,700 MW a year by 2022
In longer-term, the additional demand is expected to double to 10,000 MW a year
A number of delayed projects are currently threatening electricity supply in the country. The construction projects of several plants designed to generate a combined 6,000 MW of power are expected to be completed later than scheduled, increasing the possibility of a power crisis, particularly on Java and Bali. The projects include three coal-fired power plants with a combined output of 3,000 MW in South Sumatra, a 2x1,000-MW coal-fired power plant in Batang in Central Java and a 1,000-MW coal-fired plant in Indramayu in West Java.
The government already has a five-year plan for procuring 9,975 MW of electricity called the Fast Track Project phase one (FTP-1), which was kicked off in 2006 and should have been completed in 2010. As of the end of July this year, FTP-1 capacity has only reached 7,258 MW.
Following the first phase, the government has another acceleration project called FTP-2, which is designed to generate 10,047 MW in total. Unlike FTP-1, in which power plant development is carried out by PLN, FTP-2 involves private players.
“Coal-fired power plants are the backbone of our development plan. Development of coal-fired power plants is the fastest and lowest-priced. It is in line with the new government’s concerns on coal and gas,” said the director general for electricity, Jarman.
He added that a new fast-track project, which would be the third phase of FTP, could be launched to accelerate electricity procurement.
“We are assessing it. The most important factor is the locations for the projects,” Jarman said.
Problems relating to land acquisition have long been a major hurdle for infrastructure development: the Batang coal-fired power plant project has been delayed for years.
The development of the 2x1,000 MW Batang power plant (PLTU Batang), which will be the biggest in Southeast Asia, has faced opposition from local residents because of concerns over the environmental effects of the project, in addition to the difficulties in acquiring the land.
The $4 billion power plant will be built by PT Bhimasena Power Indonesia, a consortium comprising Jakarta-listed PT Adaro Energy, J-Power Electric Power Development Co. Ltd. and Itochu Corp. The power plant will sell electricity it produces to state-owned electricity company PT PLN under a 25-year contract.
As of the end of last year, the country’s electrification ratio reached 81 percent, which is a 13 percent increase in the last three years, PLN’s director Ngurah Adnyana said. Also as of the end of 2013, electricity consumption reached 876 kilowatt hours (kWh) per capita and is expected to increase to 1,300 kWh by 2020.
“Finding a way to accelerate the increase of the electrification ratio is a challenge for PLN. We are aiming to have 3 million new customers having electricity service installed,” Adnyana said.
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