Editorial: Indonesia Needs More Private Power Plants
Indonesia's need for power is great and well-documented. And as the economy expands, the electricity demand, from industry and households, will rise in tandem.
The government has recognized the need to increase the power supply, especially outside Java. In recent years, it has used public-private partnerships to kick-start the construction of power plants. The strategy has been somewhat successful, with several private power plants built.
That plan has received a major boost with the announcement of a $17 billion power plant project backed by Chinese investors. China Power Investment Corporation, a state-owned enterprise, has been granted permission by the Indonesian government to build what could be the country's largest-ever power plant project.
Xia Zhong, vice president of China Power, met with Indonesia's Energy and Mineral Resources Minister Jero Wacik to discuss the company's plan to develop 7,000 megawatts of hydro power in Kalimantan. That will harness the power of the Tayan River in the newly created North Kalimantan province.
Hydropower is a great alternative to coal-powered plants. No doubt there will be an impact on the surrounding environment but if planned well, the new hydropower plant will create enormous new economic opportunities in the surrounding area.
The new plants will also be able to provide electricity to thousands of households. Currently only 70 percent of households in the country have electricity. The government is aiming to boost the rate to 90 percent within a few years.
For this target to be achieved, more independent power plants will have to be built. While the likes of China Power may not need incentives, local power plants certainly do.
If we are to increase the electricity supply to meet rising demand, the government should seriously consider offering such incentives.
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