REPUBLIKA.CO.ID, JAKARTA -- The state-owned electric company PT Perusahaan Listrik Negara (PLN) said it would save up to Rp18 trillion a year in operating cost under a new fixed coal price. The government fixed the coal sale price for domestic steam power plants (PLTU) at US$70 per tonne for coal, with a 6,322 GAR calorie category or at the Coal Reference Price (HBA), if the HBA is below $70 per tonne.
"If the newly fixed coal price is effective as against around US$100 per ton at present, PLN could save up to Rp18 trillion in operating cost a year," PLN's Director for Strategic Procurement Iwan Supangkat said here on Friday.
Iwan said he welcomed the government's decision to set coal price for electricity.
Coal has been the main fuel for the country's power plant. The Energy and Mineral Resources (ESDM) Ministry on Friday announced a new decision determining coal price for electricity much lower than the market price.
Coal price has rose lately to follow the oil price hike in international market resulting in a surge in the electricity production cost .
PLN has said it would suffer Rp21 trillion in operating cost unless the government allows it to raise its power selling price that could trigger public anger.
The government has pledged not to raise electricity tariff until 2019, but it would mean a huge additional subsidy unless the government set a special price for power generating plants.
Last year PLN lost Rp16 trillion in income to pay for an increase in coal fuel price, PLN chief executive Sofyan Basir was quoted as saying on Thursday.
Under the new ministerial decision, the benchmark coal price (HBA) of the type having a calorific value 6,322 GAR for electricity is US$70 per ton. The selling price of coal to be paid by coal-fired power plant (PLTU), therefore, is US$70 per ton when the coal market price is higher than the HBA.
"When the coal market price is below the HBA, the selling price for PLTUs will be the lowest level," ESDM spokesman Agung Pribadi said.
The price of coal having other calorific value will be converted to the price of the type with a calorific value of 6.322 GAR, Agung said.
The price decision is effective retroactively as from January, 2018 until December, 2019. Therefor, there would be readjustment of sales contract made since January 1 this year.
The ESDM Ministry determined the maximum coal purchases for power generation are 100 million tons a year just to meet the requirement.
Meanwhile ESDM Minister Ignasius Jonan said implementation of the government program to build new power plants with a total capacity of 35,000 megawatts from 2015-2019 is progressing as expected. The government, however, has said it hopes only to produce an additional capacity of 20,000 MW until 2019 although the official target is maintained.
The 35,000 MW target was set to meet the requirement if the country's economy grew 7 percent per year as earlier predicted, but the economy has grown only 5 percent a year so far.
Jonan said he was confident new power plants would be on line to meet an additional capacity 20,000 MW next year.
He said additional capacity of 20,000 ME is enough to meet the growing requirement until 2019.
He said until February, 2018 new power plants with a total capacity of 1,362 MW already in operation and more units with a total capacity of 17,116 MW are under construction.
"There is no problem in the project under construction," he added.
Indonesia is seeking to build more power plant fueled by new and renewable source of energy such as geothermal, water, wind and bio energy, besides oil and gas.
The country holds the world's largest geothermal reserves, but exploitation of the natural wealth is limited as it would require high technology and is more expensive.
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