KEPCO to build 2 coal plants in Indonesia

SEOUL — At a board meeting of Korea Electric Power Corporation (KEPCO), a state electricity company in South Korea, commercial interests were put first to endorse an equity investment in the construction of two coal-fired power plants in Indonesia where environmental harm caused by coal-fired power plants has caused serious public concern.

KEPCO said the board of directors approved a 15 percent equity investment of $51 million in a power plant project being pushed by PT Indo Raya Tenaga (IRT), an Indonesian joint venture between Indonesia Power and Barito Pacific. The company’s argument that it cannot lose a bridgehead for Indonesia’s power generation market was accepted.

KEPCO failed in a preliminary feasibility study by the Korea Development Institute, a state think-tank, last year but the company re-applied and passed the screening in May. Environmental groups have opposed the deal, arguing it would cause pollution with massive greenhouse gas production.

Doosan Heavy Industries & Construction, a key contractor in South Korea’s energy industry, signed a deal worth 1.6 trillion won with IRT to build two 1,000-megawatt Jawa 9 and 10 power stations by 2023 in Java, the geographic and economic center of Indonesia. Doosan would build ultra-supercritical power plants that operate at temperatures and pressures above the critical point of water and require less coal per megawatt-hour, leading to lower emissions, higher efficiency and lower fuel costs.

Other South Korean firms have signed separate deals to participate in the construction of power plants in Indonesia. Samsung C&T has secured an order worth about 510 billion won to build a 1,760 megawatt combined cycle power plant in Cilamaya east of Jakarta by September 2021. It would be the biggest combined cycle power plant in Southeast Asia.