MAN Diesel & Turbo has signed a deal worth over €100m ($118m) with Indonesia’s state-run electricity supplier Perusahaan Listrik Negara (PLN).

MAN Diesel will deliver 20 of its dual fuel engines to PLN. Ten will be installed in three power plants for which the German company will take on engineering, procurement and construction responsibilities.

Wayne Jones, chief sales officer at MAN Diesel & Turbo, said that Indonesia “has become one of the most important growth markets in southeast Asia, if not the world. Developing the national electricity supply is therefore absolutely essential.”

He added: “Our gas-powered engines ensure the reliable, flexible and low-emission generation of energy even in remote locations.”

Ten of the engines, which will be delivered as gensets together with alternators, are to power five new power plants, each with a capacity of 15 or 20 MW. An Indonesian consortium of companies is responsible for the construction of these plants and they are to be put into operation in mid-2018. The engines are to be fuelled first by diesel and later by natural gas. Part of the arrangement is also a long-term service agreement with MAN PrimeServ, the worldwide after-sales brand of MAN Diesel & Turbo, who will maintain the new plants for five years.

The other ten engines will be installed in three power plants for which MAN Diesel, along with the Indonesian company Wijaya Karya (WIKA), will take EPC responsibility. The two companies will divide the engineering, procurement and construction tasks between them. While WIKA is taking on the construction of the plants and overall project management, MAN Diesel is responsible for the delivery and commissioning of the engines and alternators, and also for the technical equipment, electrical systems and design of the power houses. A five-year full operation and maintenance agreement is also part of the package.MAN Diesel in $118m Indonesia engine deal

Two of the plants, each with a capacity of 50 MW, will be built in Bima on Sumbawa, an island in West Nusa Tenggara province. The third will be built in Maumere on the island of East Nusa Tenggara. All three plants are to run at baseload operation and soon be powered with gas.

“The Indonesian government is pushing development of the electricity supply – they want to create 35 GW of new generation capacity by 2019,” explained Martin Höhler, head of sales for the Asia-Pacific at MAN Diesel. “Closing the gap in the supply of electrical energy on the country’s over 900 inhabited islands can only be achieved by decentralised units. We offer the ideal product and solution for this.”

With a population of around 255 million and a growth rate of almost 5 per cent, Indonesia is the largest economic area in southeast Asia. The stable growth is pushing up the island state’s energy demand which, according to the estimates, is rising by more than 8 per cent a year.

“This is why a predicted expansion of 70 GW of generation capacity will be needed by 2024. Supplying fuel is often a challenge, not least because of the small-scale structure of the country with its over 13,000 islands,” said Massimo Casal, sales manager for MAN Diesel & Turbo in Indonesia. “Indonesia has a wealth of gas but many places lack the infrastructure necessary to supply it. Our dual fuel engines offer the operative flexibility needed and are therefore optimally suited to this task.” 

Indonesia ready to tackle island electrification