Construction resumes at Indonesian coal power plant

Market: Coal, Electricity
15/02/21

Construction of a new 400MW coal-fired power plant in Indonesia's Aceh regency has resumed after being halted early last year because of the Covid-19 pandemic.

The $600mn project is being developed by a consortium composed of China Datang Overseas Investment, Indonesian state-owned construction firm Pembangunan Perumahan's subsidiary PP Energy and power services company Sumberdaya Sewatama. It is scheduled to be completed in late 2023 and begin commercial operations in 2024. The power plant is expected to consume at least 1.2mn t/yr of coal, 90pc of which will be sourced from Kalimantan on Indonesian Borneo.

Construction was halted in March last year because of the pandemic, with PP Energy submitting a force majeure notification to state-owned transmission and generation firm PLN. The project was originally scheduled for completion in 2021 but has been delayed by land issues and other legal constraints.

Construction work is expected to accelerate over the next two years as Indonesia starts to recover from the Covid-19 pandemic, PP Energy said. The plant will operate as a base-load facility and help to alleviate electricity shortages in the Aceh Jaya, west Aceh, southwest Aceh and Nagan Raya areas.

The project is part of the Indonesian government's 35GW power generation programme. It will operate as an independent power producer with a 25-year supply contract starting from its commercial operation date under a power purchase agreement between PLN and the consortium partners.

By Antonio delos Reyes

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