It has ambitious plans that will ride on the coattails of Indonesia’s power plant investment spree.
In the past decade Indonesia has reduced its electricity shortage and lowered the electricity subsidy through tremendous power plant investments. Encouraged by the strategy’s success, it is further ramping up its investments through the 35 GW New Power Plant Programs which will be implemented within the next 5 years.
Asian Power sat down with Mr. Antonius RT Artono, acting president director & director of business development & commerce at PT. Indonesia Power, to talk about Indonesia’s ambitious target and the role his company will play in this potentially game-changing program.
PT. Indonesia Power is a subsidiary of government-owned electricity distribution company, Perusahaan Listrik Negara (PLN). Established in year 1993, the company is aimed at creating power generation business competition together with Independent Power Producers that started to grow at that time in accordance with the electricity regulation in the country.
What are the targets of PT. IP in relation with the 35 GW New Power Plant Program?
The 35 GW Program is not only a big challenge for the company but also a big opportunity to grow and expand the company’s business. The company has targeted 10 GW of new power plant business in the next 10 years, which is more than double that of the existing capacity. Out of this new 10 GW power plants, 6.6 GW capacity is under development at various stages:
200 MW has just completed commisioning, 212 MW is under construction or exploration, 1,850 MW is under procurement stage and the rest of 4,390 MW is under the feasibility stage.
Among this 6.5 GW new capacity, the company has secured power plant locations for 4,890 MW. To realize the targeted 10 GW capacity, the company still needs to pursue the rest of 3.4 GW capacity through partnerships or equity investments. To support the 35 GW power plants, Indonesia has various energy resources either renewable or non-renewable energy.
What are the most pertinent energy challenges Indonesia are facing today and how is your company helping to address these issues?
For such a big 35 GW electricity program, this country cannot just rely on a single energy souce. The country has an abundance of coal, gas, hydro as well as geothermal. This country, like other countries, must avoid utilizing oil as an energy source to generate electricity, as this is the most expensive way to produce electricity.
Utilizing a combination of many energy sources also provides less risk in terms of reliability in energy supply. PT. Indonesia Power will focus on three major energy sources in developing new power plants, namely coal, gas and hydropower plants. We will still consider geothermal power plants as long as the risks are manageable.
We know that Indonesia Power looks after the operation of power plants in Indonesia. Can you tell us more about your operations in this country? What are the latest updates as well as challenges you are facing?
The company is providing O&M services for about 5.3 GW power plants belonging to PLN across the country. Our strategy in providing O&M services is mainly to deliver good power plant performance through duplicating our long-term best practices in operating our own power plants, as well as build asset management systems to ensure the right power plant O&M strategies in the long run.
The most challenging parts in entering this O&M business is building competencies in O&M. To provide competent operators and technicians requires about 2 years of on the job and in-class training (different types of power plants will need different periods of training, in this example, we use coal power). To address this challenge, the company is investing in recruiting and training human resources 2 years prior to the expected power plant operation.
We train staff in our existing power plants and place them under mentorship of experienced operators and technicians.
In addition, as each power plant will always have unique characteristics, then we will deliver our well-trained operators and technicians during the construction and commissioning stages to make sure they become accustomed to the specific power plant. This year the company is recruiting about 500 operators and technicians and will continue for the next 3 years to provide O&M services not just for PLN’s new power plants but also IPP power plants.
What do you consider as Indonesia Power’s biggest achievement to date?
There are many achievements awarded to PT. IP during its company history, but the biggest one is power plant reliability that can reach up to the top 10% of statistical data compared to the North American Electricity Regional Councel (NERC). Every year we measure and compare our operational power plant performance against the stastical data from NERC. We have the Suralaya Coal Power Plant Unit 5,6 & 7 (600 MW size each) that reached the Equivalent Availibility Factor of 95%, 94% and 92% respectively.
Each of them is above the top 10% of NERC at 90.35 %. Availibility is one of important measures of success for a power generation company delivering O&M services. We are very proud of it, and willing continously maintain this high level availibility in the future.
What are Indonesia Power’s plans for the next 5 years?
The company in the future will focusing on five major aspects, but at this time I just want to focus on 3 of them: Growth, operational excellence, and business development excellence.
We expect that within the next 5 years, we can grow up to 5 GW capacity of new power plants. We just completed commissioning 200 MW additional capacity and expect more in the 4th and 5th year. This growth will ensure that the size of the company will increase in terms of assets and capacity as well as revenue and profit. This is very important to the company to maintain company sustainability through the renewal and replacement of old and less efficient assets.
Operational excellence is also a key focus to our company, as this is the way the company will get continuous profit for new investments. This critical factor will also build trust and confidence among our shareholders as well as potential partners.
Last but not least is business development excellence, starting from selecting good and profitable projects, conducting studies, all the way through to engineering & design, procurement, construction, quality control, project management, and commercial operation.
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