More competition in power projects likely<\/p>\n
JAKARTA (JP): To stimulate competition in the electricity
\nbusiness the government says it will increase the number of
\nprojects that require investors to secure their contracts through
\ntenders, a senior government official said yesterday.<\/p>\n
\"Competition should be the first priority to encourage the
\nparticipation of private investors in developing our electricity
\nprojects,\" said Zuhal, the Ministry of Mines and Energy's
\nDirector General of Electricity and New Energy Development.<\/p>\n
Speaking after a seminar on \"The Role of the Private Sector in
\nDeveloping Energy and Electricity Infrastructure through
\nPartnerships\", Zuhal noted that most electricity projects are
\nunsolicited.<\/p>\n
An unsolicited project is one in which a private investor
\nsubmits a proposal to the government, in this case to state-owned
\nelectricity company PLN, and wins approval without going through
\na tender process.<\/p>\n
With solicited projects, PLN offers an electricity project to
\nthe private sector and awards a contract to an investor after a
\ntender process.<\/p>\n
\"We'll reduce the number of unsolicited projects and increase
\nthe number of solicited ones to encourage competition, which is
\ngood for efficiency,\" Zuhal said.<\/p>\n
He stressed that the government will include the competition
\nprinciple into an electricity masterplan, which is currently
\nbeing formulated by the government. \"We hope to issue the
\nelectricity masterplan later this year,\" he said.<\/p>\n
The plan will contain an electricity pricing system and act as
\na legal reference for electricity businesses in the country, he
\nsaid.<\/p>\n
Market risk<\/p>\n
According to Zuhal, the government will include a market risk
\ncalculation in the masterplan. \"PLN, as the single buyer of
\nelectricity from private power generators, has to bear the market
\nrisks of selling energy. With market risk regulation, the
\ngovernment and the private sector will share the risk,\" he said.<\/p>\n
Take for example, he said, a private power station with a
\ngeneration capacity of 600 megawatt (MW). PLN may buy only 300 MW
\nif it feels that it is only able to sell 300 MW, and sell the
\nrest to other parties, he said.<\/p>\n
To compensate for this, he said the company will be allowed to
\nestablish transmission and distribution networks to support its
\nsales to the other parties.<\/p>\n
\"The government is also preparing a regulation about the
\ntransmission and distribution businesses,\" he said.<\/p>\n
The one-day seminar, which was organized by Mitra Teknology
\nIndonesia Foundation, was also addressed by PLN president Djiteng
\nMarsoedi, Jakarta Stock Exchange president Cyril Noerhadi and a
\nnumber of local and foreign business figures, including tycoon
\nSudwikatmono, the chief commissioner of electricity generator PT
\nCikarang Listrindo. (13)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/more-competition-in-power-projects-likely-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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