PLN launches one of biggest power projects

Ika Krismantari, The Jakarta Post, Pelabuhan Ratu, West Java

State-owned power firm PLN commenced the construction Monday of the Pelabuhan Ratu coal-fired power plant, the largest project under the government's 10,000 MW crash program.

The plant will have a total capacity of 1,050 megawatts and cost some US$700 million.

Located in Pelabuhan Ratu, Sukabumi, West Java, the plant, which will have three generator units, each with a capacity of 350 megawatts, will be built by a consortium made up of China's Shanghai Electric and local firm Maxima Infrastruktur.

The first unit will be completed in 30 months, with the second and third units due for completion three months and six months afterwards, respectively. Based on this schedule, the first unit is expected to begin commercial operations in February, 2010. The plant will be one of the biggest power plants in the country.

"We hope the new power plant will be able to help solve the power shortages that often hit Java," State Minister for State-Owned Enterprises Sofyan A. Djalil said during the groundbreaking ceremony.

Indonesia is striving to increase its power-generation capacity so as to keep pace with the annual 9 percent growth in electricity demand. Currently, PLN's power plants have a total installed capacity of 25,218 MW, 16,400 MW of which is provided by power plants in Java and Bali.

Most parts of the country are currently faced with an inadequate power supply. The country's overall electrification rate stands at only 56 percent, with many parts of the country suffering frequent blackouts.

Last year, the government launched its crash program to provide additional generating capacity of 6,900 MW in Java and 3,100 MW outside Java by 2010 so as to cope with the growing power deficit.

Aside from providing more power, Sofyan expressed the hope that the project would provide a multiplier effect for the local economy, as it would also employ local workers.

He also called on PLN to secure sustainable coal supplies to maintain the operation of its new power plants.

In response, PLN president director Eddie Widiono said that the company had signed long-term contracts with coal companies for the delivery of 15.2 million tons of coal per year to feed its new power plants by 2010.

The representative of the Chinese Embassy to Indonesia, Fang Qiuchen, who was also present at the ceremony, hailed the project as "another good example of the cooperation between the two countries in the energy sector."

Chinese companies are playing a dominant role in the crash power program, with a number of them winning the tenders for power projects to be built under the program.

Fang said that besides taking part in the crash program, Chinese investors had also been vying for power projects under Independent Power Producer (IPP) schemes with PLN.

Under such schemes, investors build and operate the power plant, and then sell the electricity to PLN.

A number of IPP projects, including a 2,400 MW coal-fired power plant in South Sumatra and 270-MW coal-fired power plant in Bali, are currently on offer.

Fang said that among the companies that had shown interest were the China Hua Dian Group for the South Sumatra project and Shanghai Chen for the Bali plant.