PLN needs extra power to avoid crisis in Java, Bali

Moch. N. Kurniawan, The Jakarta Post, Jakarta

State electricity company PLN said on Wednesday that it needed some 2,300 megawatts (MW) in extra power until 2005 to keep Java and Bali islands from an imminent power crisis.

PLN finance director Parno Isworo said that some 1,320 MW would be supplied from the independent power producer (IPP) called the Tanjung Jati B power plant in Central Java.

Parno said that the power plant would start operation in 2004.

He added that the remainder would be generated from the expansion of PLN's power plants, namely the Muara Karang and the Muara Tawar plants in North Jakarta, which are expected to begin operation in 2005.

"We expect the three plants to operate as scheduled so that we can avoid a power crisis in Java and Bali," he told reporters during a break from a seminar on electricity fees.

Parno said that, without boosting the current capacity of 18,600 MW, Java and Bali would face a power crisis starting in 2004, continuing into the following year.

By 2005, he added, peak power demand will have risen by about seven percent per year to 16,300 MW, up from the current peak of 13,300 MW.

He said that the ideal size of PLN's power supply was 28 percent higher than the level of demand.

The operation of the three plants, which would increase the power capacity in Java and Bali to 20,900 MW in 2005, would be sufficient to meet a peak in power demand, he added.

The government has said that the Tanjung Jati B plant was ready to be developed as PLN and the IPP, PT CEPA Indonesia, have clinched a long term agreement in November to amend the previous contract first signed in 1994.

The project was halted in early 1999 as part of a government decision to annul all contracts with the 27 IPPs because PLN could not pay rates to all IPPs amid the sharp depreciation of the rupiah in the middle of the 1997-1998 financial crisis.

Parno, however, said that the Muara Karang and Muara Tawar power plant expansion programs centered on loans from the Japan Bank International Corporation (JBIC), which have yet to be negotiated.