Indonesia to Develop 93 Projects Under Second 10,000-Megawatt Power Scheme

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Indonesian government has released details of the second 10,000-megawatt (MW) phase of the country's power generation scheme, aimed at meeting the increasing demand for electricity in the country. A presidential decree signed in mid-January will allow private-sector power producers to develop 93 coal-fired, hydroelectric and geothermal power plants in cooperation with the state utility company PT Perusahaan Listrik Negara Persero (PLN) (Jakarta, Indonesia).

The first phase of the scheme called for about 10,000 MW of generating capacity to be added by 2013, with the majority of the new capacity coming from coal-fired plants. The second phase is planned for completion by 2013 or 2014.

With the issuing of the decree, the way is now open for the procurement process for the 93 plants to begin. The plants are expected to generate a total of 10,153 MW, of which more than half, or 5,770 MW, will be allocated to the Java Bali grid network, while the remainder will be distributed to the other islands in the archipelago.

The aim of the second phase is to produce as much electricity as possible from renewable sources. However, from the total new generating capacity, only 5,181 MW will come from these sources, with hydroelectric power set to supply 1,204 MW and geothermal plants a further 3,977 MW. The remainder of the new capacity will consist of 3,312 MW from coal-fired plants and 1,660 MW from gas-fired combined-cycle plants.

West Java will see the largest power plants in the second phase, with the expanded Muara Tawar gas-fired combined-cycle plant providing 1,200 MW, the Indramayu coal-fired plant supplying 1,000 MW, and the Upper Cisokan hydroelectric plant supplying a further 1,000 MW through four 250-MW units.

Of the geothermal plants, the largest will be the Sarulla 1 plant in North Sumatra, which will have three generating units providing 110 MW each. Indonesia has several active and extinct volcanoes, and some estimates have suggested that the country has the potential to provide up to 27,000 MW from geothermal sources. However, the high capital cost involved with geothermal plants has prohibited development to a large extent.

The government has estimated the total investment required for the second phase will be $15.96 billion. With PLN expected to generate more than half (5,118 MW) of the new capacity, the company expects to receive $5.9 billion, with the rest going to independent power producers (IPPs).

The reason for the apparent discrepancy in the allocation of investments is because the IPPs will be concentrating on the more expensive geothermal plants. Of the total 3,977 MW generated from geothermal sources, the vast majority (3,097 MW) will come from IPP power plants.

In addition to the construction of new power plants, the second phase of the scheme also calls for a $383 million investment in upgrading the electricity distribution network. A total of 3,490 kilometers of new power transmission lines will be constructed in the second phase.

The Indonesian Ministry of Energy and Mineral Resources has indicated that Indonesia may be able to trade carbon credits from the renewable hydroelectric and geothermal plants under the World Bank's international carbon-trading scheme. Some analysts suggest that Indonesia will be able to generate up to $30 billion in revenue from carbon trading through 2012.

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