PLN agrees to supply energy to PT Bintan Alumina Indonesia until 2050

The Indonesian state-owned corporation PT Perusahaan Listrik Negara (PLN), which has a monopoly on electric power distribution in the country, has agreed to supply the energy needs of mining company PT Bintan Alumina Indonesia (BAI) until 2050.

A Memorandum of Understanding (MoU) was inked in the previous week to mark the event.

Adi Lumakso, the Regional Business Director for PLN's Sumatra and Kalimantan, said, "This MoU is PLN's commitment to supporting the industrial sector, especially mining. Along with easing the pandemic, we hope this government-private synergy will be able to revive the community's economy."

 "This MoU between PLN and PT BAI is to prepare electrical energy for the aluminium mining industry. PLN is committed to providing sufficient power to develop the industrial sector. The hope is that it can spur national economic growth, "Adi said.

Adi explained that according to the agreement, PLN will provide 1,300 megawatts (MW) of electricity for PT BAI until 2050. However, the supply will be carried out in stages, namely 300 MW in 2026, 500 MW in 2027, and 1,300 MW in 2029-2050.

In this provision, PLN will prioritize the power supply from new renewable energy (EBT) based plants with massive potential in Sumatra.

Adi added, "Currently, PLN's electricity supply for the Sumatra region is already qualified with a power surplus of 1,710 MW. As the capacity of NRE power plants increases in 2026, there will be enough power available that the mining community in Sumatra can absorb."

PT BAI's President Director, Santoni, welcomed the signing of this MoU because it will support the aluminium utilization industry in the Galang Batang SEZ. Especially for PT BAI, that will be building an aluminium smelter with a production capacity of 250,000 tonnes of aluminium annually.

"This cooperation will be mutually beneficial. The aluminium industry and its derivatives require a large amount of electrical energy. Especially for the Galang Batang SEZ, we will need 2,850 MW in the near future,” said Santoni.

Santoni continued that PT BAI will follow government regulations to use EBT-based electricity in supplying electrical energy. So, according to him, the MoU with PLN is an alternative for the provision of EBT for PT BAI.

"Hopefully, through this MoU, PLN can provide reliable and economical electricity supply. Hopefully, the realization of this collaboration can build a productive smelter for the downstream industry of aluminium derivatives and various other industries that will be present in the Galang Batang SEZ," explained Santoni.

Agung Murdifi, the PLN Main Unit General Manager for Riau and Riau Islands, said, "This momentum was an opportunity for both parties to increase the supply and use of EBT in the industrial sector. Until July 2022, PLN's EBT mix for the Sumatra region is 27.94 per cent or equivalent to 2,427 MW, with the majority using water energy (PLTA)."

"This memorandum of understanding proves that PT BAI is very committed to supplying industrial electricity from NRE. This follows the government's decision to achieve 23 per cent of the NRE mix by 2025. This commitment to clean energy is certainly our collective obligation," concluded Agung.