PLN Promises to Illuminate East Area of Indonesia

PLN Promises to Illuminate East Area of Indonesia

State Electricity Company (PLN) supports the government policy with regard
to rule for buying and selling electricity. According to PLN President
Director Sofyan Basir the presence of such regulation supports
electrification in eastern Indonesia area.

Moreover, PLN's move could be efficient since multiple power supplies are
going to be powered by new, renewable energy sources.

PLN recorded as long as electricity purchase is cheaper than CPP (Cost of
Production), the purchase will reduce electricity rates in areas wherein
renewable energy plants are constructed.

"For example, production cost of IDR1,000 per kWh [kilowatt hour], along
with renewable energy of IDR850 per kWh. That production cost of IDR1,000
will drop slightly due to the inclusion of renewable energy. For the
national rates, the price is better, the cost of production for each region
will get better," said Jarman, Director General of Electric Power at the
office of the Directorate General of Electric Power, Kuningan, Jakarta,
Friday (2/10/2017).

He explained that the calculation is in accordance with the rules in the
regulation of Energy Minister No.12/2017. For renewable energy, electricity
purchase is set for up to 85 percent of the production cost in each
district.

"Say, in East Nusa Tenggara, how much cost of production there, they still
own many diesel [generators], we count from there, later it is calculated 85
percent of the cost of production in NTT [East Nusa Tenggara]," he said.

It is because the Energy Minister Regulation No.12/2017 uses the calculation
for power purchase which is a maximum of 85 percent of local production
cost; hence the priority of renewable energy development is focused on the
East region. It is because for the Western region electricity price is
already low.

"It actually is for Eastern Indonesia, Sulawesi, Kalimantan. Because primary
energy of Sumatra and Java is already cheap, the one remains expensive is in
the East, hence inclusion of renewable energy indeed, makes it better," he
said.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com