Indonesian state-owned Perusahaan Listrik Negara (PLN) is attempting to improve the country’s ability to meet increasing economic demand for electricity by getting stalled power projects off the ground.
34 power plant projects worth in the region of $828.8m have been held up for the last seven years.
Jakarta Post reports that the projects were part of former president Susilo Bambang Yudhoyono’s administration’s fast track programmes and account for 627.8 MW in capacity.
11 of the plants are coal-fired and PLN have decided to convert many of these to gas-fired power as they are quicker to build.
The other 17 will continue as planned and the remaining six will be taken over and continued by PLN through engineering, procurement and construction (EPC) contracts.
PLN corporate communications head I Made Suprateka insisted that there would not be significant losses from the termination of the 11 projects because five of them had not started construction yet.
“So there has not been any rupiah lost, no money. The 34 stalled projects are small with one power plant having an average capacity of 2×3 MW. The average contract for each project was worth between Rp 200 billion to Rp 400 billion,” he told reporters during a press conference.
The government’s auditors are investigating why the projects did not proceed under anti-graft regulations.
Apart from handling the stalled projects, PLN has been tasked with completing President Joko “Jokowi” Widodo’s ambitious program to procure an additional 35,000 MW by 2019.
The 35,000 MW project succeeds the 10,000 MW policy launched by Yudhoyono during his first presidential term in 2005, to keep reserve margins — the difference between capacity and peak demand — within the International Energy Agency’s recommended level of 20 to 35 percent.
As the nation is at risk of a power crisis should the level decline to below 20 percent, Jokowi has taken the initiative to boost power capacity to accommodate higher economic growth.
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