Call Center: +62 21 30012490

PLN to Keep 35,000 MW Megaprojects on Priority List

Amid the possibility of a review of the ambitious project to build enough plants to produce 35,000 more megawatts (MW) of power for the country, state owned electricity firm Perusahaan Listrik Negara (PLN) has reiterated the importance creating the new infrastructure to anticipate higher demand in the future.

PLN’s director for strategic procurement and primary energy, Amin Subekti, said that the company estimated that the country’s electricity demand would continue to grow despite a current weakening in demand.

“Infrastructure development always has to be performed earlier than the escalation of consumption. We are currently seeing weakening demand for power, but this is temporary and we still anticipate that our consumption will continue to be bigger than it is now,” Amin said on Friday.

PLN is currently working on a number of power plant projects that are part of the government’s plan to add 35,000 MW to Indonesia’s electricity generating capacity by 2019. The new capacity is crucial to help the country avoid blackouts in the next few years. 

However, since the introduction of the megaproject by President Joko “Jokowi” Widodo in October last year, critics have said the plan was made necessary by past failures, particularly when a so-called fast track program that aimed to produce an addition 10,000 MW of electricity frequently missed completion deadlines because of various issues, ranging from incapable developers, problems with financing and delayed land acquisitions.

In the new 35,000 MW program, PLN will develop 5,000 MW, a reduction from a previous plan for the company to produce 10,000 MW in capacity. The remaining capacity will be developed by independent power producers, which have to pass a thorough due diligence process before they will be able to win projects. 

Earlier on Thursday, the newly appointed coordinating maritime affairs minister, Rizal Ramli, said that he would ask the Energy and Mineral Resources Ministry to re-calculate the 35,000 MW program. 

Rizal argued that developing such a big program within a five-year period was unrealistic.

The 35,000 MW program was introduced to anticipate an estimated growth of electricity consumption in the country of around 8 percent per year to support economic growth of at least 6 percent. 

To balance the growth, the country will have to have an additional capacity of 60 GW during a 10-year period, according to figures from the Energy and Mineral Resources Ministry. 

However, the rate of growth in electricity consumption has been declining year to date, particularly because the industry was affected by slowing economic growth. Figures from PLN showed that nationwide electricity consumption grew by only 1.78 percent to 98.27 terrawatt hours (TWh) in the first six months of the year compared to 96.56 TWh in the same period last year. 

The Energy and Mineral Resources Ministry’s director general for electricity, Jarman, said if there was decline in consumption because of a weakening economy, the long-term power demand would need to be re-calculated. 

However, according to Jarman, that doesn’t mean the 35,000 MW plans should be scaled down. 

“We only need to shift the power plants’ operation times instead of lowering the amount of capacity because the demand will continue to grow,” Jarman said.