World's biggest hydroelectric power plant in Grand Inga, China - Photo: AFP.

JAKARTA (TheInsiderStories) – The government seems to be seriously developing the potential of water to be used as electricity in the North Kalimantan province to maintain national energy security and support various developments in the region. Next year the government ensures that the Mentarang hydroelectric power plant is ready to be built with an investment of US$2 billion.

Maritime coordinating minister Luhut Binsar Pandjaitan said, with various obstacles currently faced, his party asked state electricity company PT Perusahaan Listrik Negara (PLN) and officials of the Ministry of Energy and Mineral Resources to immediately complete all preparations this year so that next year, the project will be carried out soon.

He said this project involved Sarawak Energy and PT Indonesia Asahan Aluminum (Inalum), including PLN. While the capacity to be built is 1,350 megawatts (MW).

Meanwhile, Director of One Strategic Procurement PLN Sripeni Inten Cahyani explained, the Commercial Operation Date (COD) of the plant will proceed six years from now.

The hydropower plant, he said, will be used to electrify the International Yellow Industrial and Port Area (KIPI), Bulungan Regency, and to increase national energy security.

Previously, the minister requested that this project be executed immediately, although at present it is still hampered by problems regarding the division of business areas.

Meanwhile, chairman of Indonesia Investment Board Thomas Trikasih Lembong once said, the synergy of regional government in inviting investment is very important to implement, considering that investment barriers still occur in the region so far.

According to Lembong, development in the border region has a lot of potentials and must be synergized well between the local government and the central government.

Furthermore, the Governor of North Kalimantan Irianto Nambrie said, his region still has more than 20 rivers that have the potential for hydroelectric power plants which are spread in 3 regencies. The potential for electricity to be developed by investors from these rivers is predicted to reach 18,100 MW.

In the midst of this hydroelectric power plant development plan, the government also seemed unfriendly in the tax treatment because according to General Chair of the Association of Hydroelectric Power Plants Riza Husni, the government’s decision to increase levies on water use for private power plants is wrong.

This is following the decision of the Minister of Public Works and Housing Number 12 of 2019, which sets the basic price of surface water at the rate of Rp. 200-300 per Kwh and comes into force on January 19, 2019. This is far from the price in 2017 which is only around Rp27-29.85 per Kwh in accordance with Minister of Public Works Decree No. 568 of 2017.

According to Husni, the determination of tax collection for water use is not entirely wrong. Because basically water is a natural resource owned by the state. The levy, according to him, is naturally enough to be charged for the conservation needs of the ecosystem around the catchment area, so that it is not naturally too high.

Even for a private power plant, according to him, the levy should be regulated to provide incentives rather than impose and inhibit the development of renewable energy carried out independently by the community.

Husni said, the ministry had been mistaken in understanding the use of water for private power plants, which according to him were only limited to moving turbines and then flowing back to the estuary. Unlike the case with the bottled water industry which does take and sell the water.

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