Govt forecasts power glut as demand drops

Govt forecasts power glut as demand drops

JAKARTA (JP): The government's "optimistic" projection is for
power oversupply of at least 4,000 megawatts on the Java-Bali
network in three years due to the economic crisis.

Director General of Electricity and Energy Development, Endro
Utomo Notodisuryo said contributing factors to the power glut
would be a probable decrease in demand combined with increase in
supply as several new power plants begin operation.

"The 4,000 MW oversupply is based on an optimistic prediction
that the country's economy will recover in three years. If the
economic crisis continues longer, the oversupply could be
bigger," Endro told The Jakarta Post.

According to the favorable calculation for economic
performance, he said, the national economy would grow by 2
percent next year, following projected zero growth this year, and
would continue to grow by 4 percent in 2000, and 7 percent in
2001.

The crisis, which has already led to the closure of many
factories, is expected to slash growth in power demand to between
1 percent and 2 percent this year from an average 13 percent in
recent years, Endro said.

"Power demand growth will be back to the level of 13 percent
by 2001 if the country's economy fully recovers by that year," he
said.

No data is available on current power demand on the Java-Bali
network. But State Electricity Company (PLN) data shows that peak
load -- or the maximum power demand -- reached 9,600 MW up until
the middle of last year, when the crisis was at its outset.

Endro declined to give estimated supply figures by 2001, but
PLN data projected its power generation capacity on the Java-Bali
grid would increase to above 16,000 MW by 2001, from 12,400 MW as
of mid-1997.

PLN's 1,200 MW sixth and seventh units of the Suralaya power
plant, the 342 MW Grati gas turbine power plant, the 372 MW
Tambak Lorok power plant and several other new plants will supply
an additional 3,600 MW.

PLN project private power plants would supply an additional
4,250 MW by 2001 on the Java-Bali grid, bringing the total power
supply to above 20,000 MW that year.

Only one private power plant -- the 165-MW Salak geothermal
power plant, owned by a consortium led by Unocal Corp. of the
United States -- is currently part of the grid.

Five other private power plants are scheduled to come on
stream within the next three years.

These include the 1230-MW coal-fired Paiton I, the 1,320 MW
coal-fired Tanjung Jati B, the 1,220-MW Paiton II, the 400-MW
Dieng geothermal and the 220-MW Wayang Windu geothermal.

Endro said power oversupply would impose bigger financial
burden on PLN, already facing financial problems due to the
rupiah's sharp depreciation against the U.S. dollar.

He said under the "take-or-pay" agreement with independent
power producers, PLN had to buy 80 percent of the private power
plants' supply regardless of the demand.

"Anyway, if the country's economy really starts to recover in
three years, we expect a balance in power supply and demand by
2003," Endro said.

"This will reduce PLN's financial burden anyway." (jsk)