Power Plant: 35 new and renewable energy projects to operate soon

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Bisnis Indonesia : Pembangkit Listrik: 35 Proyek EBT Segera Beroperasi

19 August 2019

By: Ni Putu Eka Wiratmini

Bisnis, Jakarta – 35 new and renewable energy projects with a capacity of 834.71 MW are entering construction with a commercial operation target between 2019 and 2021.

The new and renewable energy projects are dominated by hydropower plants (PLTA), while the rest are six solar power plants (PLTS), a geothermal power plant (PLTP), and a biomass powerplant (PLTBm).

The six PLTS, with a total capacity of 45 MW, have finished construction and will just have to determine a commercial operation date (COD) this year.

Director for Various New and Renewable Energy of the Energy and Mineral Resources (ESDM) Ministry Harris said that the quicker construction of PLTS compared to other power plants also made its COD or commercial operation target sooner.

This year, it is set that there will be additional operation from the PLTAs that will be operational. The PLTAs with CODs this year are Air Putih PLTA in Bengkulu with a capacity of 21 MW and Poso Peaker PLTS in Central Sulawesi with a capacity of 515 MW.

Despite having a large capacity in total, the operation of Poso PLTA is going to be implemented gradually. There are only two Poso PLTA units, each having a capacity of 35 MW, with COD targets in September 2019.

The construction of those two PLTA units are finished and a series of tests on the network will be conducted. The rest will be worked on gradually.

“[For] the rest [of Poso PLTA], half a year is needed to work on the other units. Not all [units] will have their COD in 2019, a few units’ [CODs] are sooner,” he stated to Bisnis recently.

Other power plants that are planned to have their COD this year are Kuncir Putih mini-hydro power plant (PLTM) in Central Java with a capacity of 0.9 MW, Pagar Merbau biogas power plant (PLTBg) in Deli Serdang with a capacity of 827 KW, Ujung Batu PLTBg in upstream Rokan with a capacity of 3 MW, and Merauke PLTBm in Wapeko, Merauke with a capacity of 3.5 MW.

Other power plants, especially PLTMs, are set to be operational between 2020 and 2021 as they require a longer construction time. “The PLTMs, in average, [will be operational] between 2020 and 2021,” he said.

Besides power plants with a COD this year, previously, there were eight new and renewable energy power plants that had determined their COD to be in the first half of 2019. The total capacity of the power plants with CODs are 35.5 MW, which consists of power plants ranging from PLTS to PLTBm.

Financing

Meanwhile, from the 75 new and renewable energy power purchase agreements (PPA) that are contracted from 2017 to 2018, 32 have yet to finish their financial close.

This condition will affect the implementation continuation of new and renewable energy projects, especially for power plants with potential mixture target of 23% in 2025.

This said, Haris said that the 32 new and renewable energy PPAs are slowly showing progress. Based on data received by Bisnis, out of the 32 new and renewable energy PPAs, nine with a total capacity of 400.1 MW have provided implementation guarantee.

The nine new and renewable energy PPAs are dominated by PLTMs.

Which means that, with implementation guarantee, the nine new and renewable energy PPAs will just have to finish their financial close.

Harris said that, by providing an implementation guarantee, the nine new and renewable energy PPAs had shown PLN their seriousness in working on the project.

The nine new and renewable energy PPAs will just have to find a partner or a third party to resolve the project’s financing.

The financing guarantee that will be provided is 10% of the total investment that the developer has paid for the project. “This is their form of seriousness, it is an indicator for PLN that they have progress,” he stated.

Previously, PT PLN (Persero) recorded a number of PLTAs will be operational soon following Rajamandala PLTA which had its COD on 12 May 2019.

Executive Vice President for PLN Construction in Central Java Dady Murihno said that the PLTA that would be operational soon is Jatigede PLTA with a capacity of 2x5 MW. The PLTA is located in Sumedang, West Java and will be commercially operational in September 2019.

Besides that, Cisokan PLTA will also enter the primary implementation stage.

According to him, based on PLN’s 2019-2028 Electricity Procurement Plan (RUPTL), the new and renewable energy mixture target is to be 23% in 2025, or equal to 6.7 GW. ”Work on this project can help PLN to achieve the target,” he said.

Electricity Producers Association (APLSI) Executive Director Rizal Calvary Marimbo said that, despite the increase of foreign new and renewable energy development, Indonesia experienced the opposite as there were more fossil mixture power plants in Indonesia than new and renewable energy.

He added that, despite foreign financing institutions currently interested in developing new and renewable energy power plants, the project’s economy problem was still a hurdle.

“The problem is that the BPP (electricity supply cost) changes every year so that it disturbs the project’s economy. On the other hand, BPP in the western part of Indonesia is significantly lower compared to the east side,” he stated. 

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