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Illustration of a power plant (Image courtesy of xedos4 at FreeDigitalPhotos.net).
Jakarta, GIVnews.com – No doubt that Indonesian President Joko ‘Jokowi’ Widodo is fully aware of all the pessimisms surrounding his ambitious plan to build 35,000 MW power plants during his five year term that will end later in October 2019. The 35,000 MW is meant to provide significantly more electricity capacity to the current available production capacity of only 40,000 MW.
Jokowi will launch the 35,000 MW project late this April in a special ceremony designed to be a public event.
As repetitively stated by the President and his cabinet ministers, the 35,000 MW project worth Rp 1,100 trillion is absolutely required in order for the country to power up its annual economic growth to 6-7 percent by 2019. More electricity means more power for industrial estates, hotels, special economic zones and the like. This is in addition to the aim of creating more equal access to electricity for households in the less developed regions.
Accordingly, the President’s recent visit to the headquarters of state power firm PT. PLN in South Jakarta was not at all an image building move. His 30-minute dialog with PLN officials demonstrated the seriousness about the mega power project plan. Previously, none of Jokowi’s predecessors had made such a visit to the power company office.
“In five years, the 35,000 MW target must be achieved … That is why I come here to tell the PLN management, its general managers and division heads that this big, yet realistic target which must be achieved with hard work,” the President told reporters immediately after the meeting last Tuesday afternoon (7 Apr 2015).
The President also said that the 35,000 MW target could be met, based on PLN’s calculations that 11,000 MW power plants can be built this year and another 10,000 MW plants in 2016. “If those targets can be achieved, which is 21,000 MW within two years, then the 35,000 MW will be less heavy,” Jokowi said.
The Target that Must be Achieved
The President’s sentiments were echoed by his cabinet members including Minister of Energy and Mineral Resources Sudirman Said. On the 35,000 MW electricity power generating target, the minister had shared that the question is not whether it can be achieved, instead, achieving it is a must for Indonesia. Failing to achieve the target only means the government’s failure of realizing its economic growth target, he noted.
Minister Said elaborated the reason behind the target of being able to produce an additional 35,000 MW worth of electricity power. In his special interview with Listrik Indonesia, a monthly electricity-related publication, the minister said, “Theoretically, in order to meet 6-percent economic growth per year, electricity production has to grow 1.5 percent above the 6 percent (level), or about 7.5-8 percent per year.”
The 7.5-8 percent translates into about additional 7,000 MW per year, which is the annual new supply to be created within the next five years, the minister said.
However, pessimism does exist as another senior official at the Ministry of Energy and Mineral Resources disclosed a figure that is different from what President Jokowi had said. Jarman, the ministry’s director for electricity energy, shared that only 3,000 MW plants can be expected to be built this year, down from the 7,000 MW mentioned by the President. Nonetheless, Jarman did not mention the names of the investors behind these projects and where the power plant projects will be located.
Regardless of all detailed calculations concerning the 3,500 MW project, here is Jokowi’s basic power project plan: Of the 35,000 MW total target, 62 percent will come from independent power producers (IPP) while the remaining 38 percent will be from the state power company PLN. In addition, almost 60 percent of the 35,000 MW power plants will use coal, while the rest will be diesel-based power plants.
As reported by Listrik Indonesia, several large IPPs have expressed interest in the project. They include old players like PT. Paiton Energy, PT. Central Java Power, PT. Jawa Power, PT. Sumber Segara Primadaya, PT. Bosowa Energi, and PT. Pusaka Jaya Palu Power. Recently, their senior executives attended a dialog with senior officials of the Minister of Energy and Mineral Resources, PT. PLN and other related offices. They were among the total 23 power producers invited to the dialog meeting. Some of the IPPs that have been operating power plants are listed below.
| Company | Power Plant | Capacity |
| PT. Paiton Energy | PLTU* Paiton 1 and 3, Central Java | 2 x 615 MW and 1 x 815 MW |
| PT. Central Java Power | PLTU Tanjung Jati B, Central Java | 2 x 660 MW and 2 x 660 MW |
| PT. Jawa Power | PLTU Paiton II, unit 5 and 6 | 2 x 610 MW |
| PT. Sumber Segara Primadaya | PLTU Cilacap, Central Java | 2 x 281 MW and 1 x 614 MW |
| PT. Bosowa Energi | PLTU Jeneponto, South Sulawesi | 2 x 100 MW |
| PT. Pusaka Jaya Palu Power | PLTU Tawaeli, Central Sulawesi | 2 x 15 MW and 2 x 13.5 MW |
| *PLTU – steam power plant |
Directly Selected Independent Power Producers (IPPs)
In the dialog meeting, the IPPs were told that they will not be required to take part in tenders. They can be directly selected if their financial capacity and technologies are already up to standards.
In the meantime, energy analysts have cautioned, however, that Jokowi’s 35,000 MW is an overly optimistic target. They pointed to the previous government’s 10,000 MW project, of which only 7,000 MW have been realized. Then President Susilo Bambang Yudhoyono launched the five-year project in 2010.
Luluk Sumiarso said that land acquisition and land clearance are the most crucial problem. “The power project cannot be up in the air,” he told Listrik Indonesia. Obtaining funding and building power transmission systems are also serious problems, according to Luluk, who is a former oil and gas director general. “It should not happen, that we build power plants and then we cannot transmit the electricity,” he noted.
Muljo Adji, president director of Java Bali Power Generation, agrees on the above point. “Electricity of whatever amounts will be used for Indonesia. The only problem is funding,” Muljo Adji said. According to him, the time frames for completing power projects should be carefully considered.
On this note, the Listrik Indonesia publication asked several companies for comment and got this answer: They doubt the 35,000 MW project can be realized as expected.
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