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Economy

Indonesia plans 42GW in new power plant capacity by 2024

JAKARTA -- Indonesia on Thursday unveiled projects that will add 42 gigawatts of electricity generating capacity to its current capacity of 53GW by 2024. A total of 1,188 trillion rupiah ($90.1 billion) will be spent on the plants, which will be built by state electricity producer Perusahaan Listrik Negara and private companies.

     Vice President Jusuf Kalla said that if the economy keeps growing at 6% a year over the next five years, Indonesia will need to double existing capacity. Jarman, director general for Electricity at the Ministry of Energy and Mineral Resources, said Indonesia has a current capacity of 53.5GW, mostly from PLN power plants.

     Around half the additional capacity, 20GW, will come from coal-fired plants. Gas-fired plants will make up 13GW, and the rest will come from hydropower, geothermal and other sources. Building more coal-fired plants should help the domestic coal mining industry, which is suffering from a sharp drop in coal prices.

     Sukhyar, director general for minerals and coal at the Ministry of Energy and Mineral Resources, said in February that by 2019 coal production in Indonesia will reach 400 million tons, 60% will be devoted to domestic needs. This year's allocation for the domestic market is 22% of Indonesia's total production of 425 million tons. 

     PLN's director, Amin Subekti, said the company will build around 14GW of generating capacity, spending about 608.5 trillion rupiah. Construction will begin on 4.9GW of capacity this year.

     Jarman said that to facilitate projects, the government will shorten the permitting process from 900 days to around 200 days by revising a ministerial decree. Rules for electricity pricing by independent power producers will also be revised. The government wants to review land-purchase laws and due diligence for bid tendering, and to encourage smooth disbursement of funds to push ahead with infrastructure projects.  

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