The government has reminded the North Kalimantan administration to create a market capable of absorbing the massive long-term energy potential of the province in the wake of a plan to transform the province into Indonesia’s newest industrial zone.
North Kalimantan is considered to have significant energy potential. It has at least nine oil and gas fields, including the Ambalat block, which has oil and gas reserves amounting to 764 million barrels and 1.4 trillion cubic feet, respectively. It also has hydroelectricity potential, which is estimated to be around 33,000 megawatts (MW).
“The province has great energy potential and is located in a strategic position, allowing it to export its goods to China and Japan, for instance,” Edwin Hidayat Abdullah, the State-Owned Enterprises Ministry’s deputy of energy, logistics, estates and tourism business, said on Wednesday.
“However, it’s impossible to develop a 9,000 MW power plant at Kayan River with an investment value of around US$27 billion without the presence of the market itself. Besides [state electricity firm] PLN, who’s going to be the off-taker of the electricity produced at that power plant?”
The North Kalimantan administration claims there are several investors that have committed to developing hydro power plants in the province, including PT Hannergi Power Indonesia and PT Kalimantan Electric City at Mentarang River with a capacity of 500 MW and 7,600 MW, respectively, and PT Kayan Hidro Energi at Kayan River with a capacity of 9,000 MW.