PLN signs power deals with two private firms
JAKARTA (JP): The state-owned electricity company, PLN, has signed two power purchase agreements with PT East Java Power, and PT Makasar Power, and will build two natural gas-fired power plants, with a combined capacity of 560 megawatts (MW).
Speaking to reporters after signing the agreements, PLN's President, Djiteng Marsoedi, said PT East Java Power would build a 500 MW combined-cycle power plant in Pasuruan, East Java, with a total investment of US$575 million.
PT East Java Power is 50.1 percent owned by Enron Java Power Corporation of the U.S., 25 percent by PT Pasuruan Power, controlled by Bambang Trihatmodjo, the second son of President Soeharto, and 24.9 percent by Prince Holdings Ltd. of Hong Kong.
The Pasuruan power plant is the second power project partly owned by Bambang Trihatmodjo, whose Company the Bimantara Group, owns 15 percent in PT Jawa Power, the developer of the coal-fired 1,220 MW Paiton II station, in Probolinggo, East Java.
Robert Baldwin, the chief of Enron Development Corp., said East Java Power would build the Pasuruan power plant in a 20-year operation, operating and owning the scheme.
"We're now negotiating with the state-owned oil and gas company, Pertamina, about using the gas supply from the Madura sea," he said, adding the Pasuruan plant would come on stream in June, 2000.
PT Makasar Power will build a 60 MW gas-fired diesel power plant in Pare-pare, South Sulawesi, with a total investment of $70 million.
PT Makasar Power, which will build the power plant in a 20- year operation, again operating and owning the scheme, is a consortium of Wartsila Diesel Development of Finland, PT Putra Dharma Harmoteknik and Stowindo Power of Indonesia.
Makasar Power's Managing Director, Ian C. Copeland, said the Pare-pare power plant was scheduled to start operation next October.
He said the power plant would initially use fuel oil, as it has yet to secure its natural gas supply from Sengkang, South Sulawesi. "But it will eventually use gas," he said.
Under yesterday's agreements, PLN will buy electricity from PT East Java Power for 5.76 U.S. cents per kilowatt hour (kwh), and from PT Makasar Power for 6.09 U.S. cents per kwh.
The East Java Power's price includes the transmission cost from the power station to a nearby sub-station, while the Makasar's price does not include the transmission cost.
Djiteng said until now PLN had signed 21 power purchase agreements with private firms, four of which were signed this month alone.
According to him, the 21 power projects will together have a generation capacity of 7,482 MW, of which some 4,480 MW will be generated by coal, 772 MW generated by gas, 60 MW by diesel oil and 2,170 MW by geothermal steam.
He said the 7,482 MW were part of the 45,000 MW generation capacity which the government had allotted to private power generators.
"This is to anticipate the rising demand for electricity in the 2000s," he said recently. He estimates electricity demand to grow by 20 percent a year.
PLN itself will increase its generation capacity by 3,000 MW, to 15,000 MW, during the next five years.
According to Djiteng, PLN expects to sign more power-purchase agreements with private firms before the end of this year.
Meanwhile, PT Consolidated Electric Power Asia (Cepa) Indonesia has started the construction of its 1,300 MW Tanjung Jati B power plant in Jepara, Central Java, yesterday.
The power project, with a total investment of US$1.77 billion, had previously been stalled over disputes about the site.
But the government has finally decided to allow the private company to continue construction, with some amendments in its agreement with PLN. (bnt/har)