Indonesia’s state-owned electricity utility PLN has announced plans to terminated around 24 mini-renewable IPP schemes if project developers do not reach financial close by June 2019.
The projects, part of 70 renewable energy projects that signed PPAs with PLN in 2017, include 19 mini hydropower plants with combined capacity of 105.12MW, a 200MW hydro power plant, and four bio-energy and waste-to-energy power plants with combined capacity of 19MW.
“The problems vary depending on the location of each mini project (hydro or waste),” Teugh Harsono, senior treasurer at PLN, tells TXF. “The main challenges are dealing with the land acquisition and permit, as well as the capability of local developers and the feasibility of the project itself. These factors make fundraising difficult.”
However, these project only make up a small portion of PLN’s 26GW procurement target for 2019 (initially 35GW but the Indonesian government deemed the target overly ambitious in 2017). Therefore, the potential scrapping of these project will not significantly impact to overall capacity of renewable projects in Indonesia.