PLN Holds Tender for Two Non-Fossil Fuel Power Plants

Oleh Miftah Ardhian 31 August 2016

Both projects are under the 35,000 MW which is in line with the government's policy on energy diversification.

Pembangkit Listrik
Arief Kamaludin|KATADATA

State electricity company Perusahaan Listrik Negara (PLN) has started to tender out more projects under the 35,000 MW megaproject. The tenders are for two non-fossil fuel power plants for the Kalimantan and Java-Bali power system.

PLN Senior Public Relations Manager Agung Murdifi said both projects under the 35,000 MW are in line with the government's policy on energy diversification. The government will reduce its usage of fuel and will start to optimise the use of coal and gas. (Read: Government and PLN Accelerate 35 GW Electricity Megaproject)

To support this policy, PLN has started to hold a more competitive tender process for bidders. “This way, PLN is expected to get a tender winner that is truly qualified,” Agung said in a PLN press release distributed on Monday (29/8) night.

The projects up for grabs include the Peaker Jawa-Bali 4 natural gas (CNG) power plant (PLTGU) that has a capacity of 1 x 450 MW and the Kalbar-2 coal-fired power plant (PLTU) that has a capacity of 2 x 100 MW. PLN is developing the PLTU Kalbar-2 plant in an effort to cut production costs and improve the power system in Kalimantan.

According to the PLN 2016 – 2025 electricity procurement business plan (RUPTL), the installed capacity for West Kalimantan in 2015 was 228 MW. Most power plants in this province are diesel power plants (PLTD) with a total capacity of 192 MW, natural gas power plants (PLTG/ PLTMG) 34 MW, and hydroelectric and micro hydroelectric power plants (PLTA/M) 2 MW.

The installed capacity of the Java-Bali system was 33,824 MW in 2015. PLN plans to increase the total power capacity of power plants in the system to 43,400 MW from 2016 to 2025, which would mean an annual average of 4,300 MW. Based on this plan, PLTGU/ PLTMG plants would contribute 32.3% of the power or 14,000 MW.

Interested participants that have experience building power plants can register for the pre-qualification process and collect the required documents from 30 August to 13 September 2016. Bidders will undergo a competitive selection process. (Read: Power Plant Development, PLN Loosens Capital Requirements for Local Companies)

To qualify to win the tender, the bidder must meet certain criteria that represent the tender bidder’s ability to develop an IPP project, its experience of developing power plants and its financial strength. The tender winner for the PLTU Kalbar-2 project will partner up with PLN's subsidiary, which will sponsor the project for building a special purpose company (SPC) and executing a power project agreement (PPA).

The selected winners will develop, fund, build and operate projects under a build-own-operate-transfer (BOOT) scheme for 25 years (for a PLTU) and 20 years (for a PLTMG/ PLTGU), which will be included in the PPA. The tender winner will also build transmission lines and supporting facilities, which will be taken over by PLN as a special facility.

To increase the use of local content, tender winners must use boilers, balance of plant, transformers, cables, cubicles and steel designed, produced and assembled by experienced producers in Indonesia.

The local content target for the 35,000 MW megaproject is 40% of the total investment. It would be more competitive to use equipment made in Indonesia if taxes, especially added value tax, are revised. (Read: PLN Proposes to Change Formula for Calculating Electricity Tariff)

Some of the balance of plant (BOP) equipment must be produced and assembled by strategic state-owned enterprises (SOE), which include PAL Indonesia (Persero), Bosma Bisma Indra (Persero), Barata Indonesia (Persero), Pindad (Persero).

The plan for these two power plants has been included in the 2016 – 2025RUPTL. These additional power plants will increase the electrification ratio in Kalimantan and Java-Bali.

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