ESDM Sets Benchmark for Electricity Buying Prices

TEMPO.CO, Jakarta – The Energy and Mineral Resources Ministry is planning to increase its power capacity by 42,967 megawatt within the next five years. In order to accelerate the realization of the plan, the Ministry has issued the Energy and Mineral Resources Minister’s Regulation No.3/2015 on electricity purchase procedure and the benchmark for electricity buying prices from steam-fueled power plants, natural gas-based power plants, and hydro power plants. 

“The highest benchmark price has been set to simplify the negotiation process and provide the state electricity company (PLN) with more flexibility in the negotiation process,” Energy and Mineral Resources Minister Sudirman Said told journalists on Tuesday, January 13, 2015. 

Jarman, the director general for electricity at the Energy and Mineral Resources Ministry, said that the highest benchmark price was set based on the type of the energy and the capacity of a power plant. The highest electricity price is currently pegged at 6.31-11.82 US cent per kilowatt-hour. 

The new regulation will also allow the PLN to conduct direct appointment to buy electricity. The direct appointment is aimed at realizing energy diversification at non-fuel oil power plants and increase the capacity of power plants that operate in different locations.

However, to avert possible abuse of authority in a direct appointment, the PLN is required to involve an independent procurement agent.

“The independent procurement agent's role is key to help PLN with developer evaluation. This will result in punctual power plant construction, unlike before,” Jarman said.

BERNADETTE CHRISTINA