There are two flagship programs conveyed by President Prabowo Subianto during his inauguration speech as President of the Republic of Indonesia recently, namely food and energy self-sufficiency. According to the Director of PT Kayan Hydro Energy (KHE), Eko Permanahadi, this is where the strategic role of the Kayan Cascade Hydroelectric Power Plant lies. The green electricity it produces can support national energy self-sufficiency.
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Prabowo is very serious about the food and energy self-sufficiency program. He re-emphasized the importance of self-sufficiency in these two sectors in the 2024 Inflation Control Coordination Meeting at Sasana Bhakti Praja, Ministry of Home Affairs, Jakarta, Monday, December 9. "Food self-sufficiency, energy self-sufficiency, are the keys to controlling inflation. "This kind of breakthrough is also something very beneficial," he said.
Until now, PT KHE, which is the initiator of the Kayan Cascade Hydroelectric Power Plant, is the only party building a Hydroelectric Power Plant (PLTA) on the Kayan River. There are five dams that will be built along the river. The total green electricity that can be generated from the five hydroelectric power plants is 9,000 MW. According to Eko, this capacity is more than enough to electrify all of Kalimantan, which currently needs 2,000 MW of electricity.
Eko continued, even when the IKN Nusantara is fully operational, its electricity needs can still be met. The abundant green electricity will be used for the Tanah Kuning Mangkupadi green industrial area, Tanjung Selor, North Kalimantan, which is managed by PT ISI.
"We have thought about how to utilize the huge excess electricity. We have prepared a new ecosystem by making the Kayan Cascade Hydroelectric Power Plant an attraction, both for foreign and domestic investors," said Eko Permanahadi.
What needs to be underlined is that the capacity of 9,000 MW of green electricity is also the largest in the Southeast Asia region and the Asia Zero Emission Community (AZEC) forum, whose members are Indonesia, Thailand, Malaysia, Singapore, Vietnam, the Philippines, Cambodia, Laos, Brunei, and Australia. "Therefore, Coordinating Minister for the Economy Airlangga Hartarto included the Kayan Cascade hydroelectric power plant project in bilateral cooperation with the Japanese government," said Eko.
Currently, said Eko, PT KHE has completed all existing permits. Therefore, construction has been carried out. "We have started physical work, civil work. We have built access roads for construction. We have also diverted the river flow while the dam construction process is underway. The inundated areas where there are settlements, the residents have been relocated. We have also spoken with several parties whose areas are affected by the inundation. And it went smoothly, there were no more problems. The permit to borrow forest areas has also been completed. So everything is ready, and this project has been realized," he said.
The target to be realized in 2025, Eko Permanahadi emphasized, is the signing of the Power Purchase Agreement (PPA) with PLN for the Kayan Cascade 1 hydroelectric power plant with a capacity of 900 MW. "Next, we will prepare Kayan Cascade 2, 3, 4, and 5 simultaneously," he told Edy Suherli, Bambang Eros, and Irfan Meidianto from VOI who met him at the PT KHE office, in the Mega Kuningan area, Jakarta, Monday, December 9. Here is the full excerpt.
Currently, said KHE President Director Eko Permanahadi, there are no financial institutions or banks that will provide credit for fossil fuel power plants. In the future, he said there is no other choice but to develop new renewable energy. (Photo: Bambang Eros, DI: Raga Granada VOI)
President Prabowo's government has launched a food security and energy security program. New energy is now a major global issue, how much does the Kayan Cascade hydropower plant contribute to national energy security?
The role of PT KHE when the Kayan Cascade hydropower plant is operational is very large in contributing to energy self-sufficiency. This is what President Prabowo has planned in addition to food self-sufficiency. The current situation throughout the world is that it is no longer possible to increase electricity capacity through coal-fired power plants or other fossil fuel power plants. World and domestic financial institutions have stopped providing funds for fossil fuel electricity projects. So how do we meet the electricity needs of the community and industry? In this context, the Kayan Cascade hydropower plant plays a very important role in supporting this energy self-sufficiency program.
In his inauguration speech, President Prabowo said that economic growth could be 8% or more. New and renewable energy is needed to support this 8% economic growth. The Kayan Cascade hydropower plant can produce 9,000 MW of electricity, and this is green electricity. The existing fossil fuel power plants must be replaced, the choices are wind, solar, geothermal, and water. However, of all of them, only hydropower can replace PLTU. And not all water or rivers throughout Indonesia can become PLTA, because the water sources are limited. In the Kayan River, the water is abundant, this is God's gift given to us. If this project is completed with God's permission, God willing, it will support the energy self-sufficiency program, green industry and at the same time can carry out the energy transition. So the PLTA that is no longer efficient can be replaced with the Kayan Cascade PLTA.
In the Kayan River, PT KHE is the only company that builds PLTA or are there others?
We have started the project on the Kayan River in 2010. In 2011 we received permission from the government to build the PLTA. Now we can start physical construction on the Kayan River, it is not easy. Because to get permission the process is long, dozens of years. After that we carry out land acquisition, relocate residents affected by the PLTA. Currently on the Kayan River, only we; PT KHE are building a hydroelectric power plant.
The electricity capacity that will be generated is quite large, reaching 9,000 MW from 5 dams. How will it impact energy needs in Kalimantan and nationally?
For the 9,000 MW capacity, there is no competitor. This will be the largest hydroelectric power plant in Southeast Asia. Therefore, the Coordinating Minister for the Economy Airlangga Hartarto, included the Kayan Cascade hydroelectric power plant project in bilateral cooperation with the Japanese government.
This 9,000 MW of green electricity is more than enough to electrify Kalimantan Island, what will the rest be used for?
Currently, the electricity requirement for all of Kalimantan is around 2,000 MW. Our electricity production is still greater. Later, when the IKN Nusantara is effective, the electricity requirement will increase, but even that is still excessive. Therefore, we have thought about how to utilize the huge excess electricity. We have prepared a new ecosystem by making the Kayan Cascade hydroelectric power plant an attraction for both foreign and domestic investors. Our tagline; 24/7 availability of green energy. We are optimistic that this will attract investors who are concerned about environmental conservation. Several parties who have signed an MoU with us will build hydrogen and ammonia industries. We have also spoken with several off takers from Korea. So we are not worried, the 9,000 MW will be used. This can support the government's plan to increase our economic growth by 8% or more.
Is there a possibility to export electricity to neighboring countries?
That is possible, but the priority remains to meet domestic electricity needs first. However, there is an opportunity in that direction because the regulations already allow it.
Kayan River with its abundant water, said KHE President Director Eko Permanahadi, is a gift from God that must be managed and utilized for the greatest benefit of the people. (Photo: Bambang Eros, DI: Raga Granada VOI)
Did you think about the concept of green energy when planning the Kayan Cascade Hydroelectric Power Plant?
We are a forward-thinking company, since the beginning of this project we have been thinking about the future. That the world's energy from fossil fuels will run out, therefore the choice is new and renewable energy. In that era, people were still thinking about adding electrical energy through PLTU. At that time, the discourse on the greenhouse effect and global warming was not yet a major issue. However, we have been thinking in that direction. So that has become our vision, that we must be a leading player in the development of green energy or new and renewable energy.
In Asia, there is the Asia Zero Emission Community (AZEC) forum whose members are: Indonesia, Thailand, Malaysia, Singapore, Vietnam, the Philippines, Cambodia, Laos, Brunei and Australia, is KHE involved in procuring new renewable energy, considering that the green electricity output from the Kayan Hydroelectric Power Plant is quite large?
As I mentioned earlier, the Kayan Cascade Hydroelectric Power Plant has been included in the bilateral cooperation between Indonesia and Japan. The Kayan Cascade hydroelectric project is the largest in the AZEC list spread across other member countries; Thailand, Malaysia, Singapore, Vietnam, the Philippines, Cambodia, Laos, Brunei and Australia. So the Kayan Cascade hydroelectric project is not only important for Indonesia but also for bilateral and multilateral cooperation.
President Prabowo Subianto's visit to various countries, including China and the US, resulted in a number of important agreements in the field of new and renewable energy. Are any of these important agreements related to the development of hydroelectric power plants in the country, including on the Kayan River?
Of course there are, Mr. Prabowo's statement at the G20 Brazil forum said that the Indonesian government would utilize new and renewable energy, especially from water. Although he did not explicitly mention that the project was the Kayan Cascade hydroelectric power plant, we can see if there is a hydroelectric power project in Indonesia at this time with an electricity capacity of 9,000 MW? In 2023, President Jokowi and Prime Minister Fumio Kishida of Japan signed a bilateral agreement on new and renewable energy. In it, there is a hydroelectric power plant project on the Kayan River.
How is the current progress of the Kayan Cascade hydroelectric dam construction?
First, I need to convey that the permits are complete. Therefore, we have started physical work, civil work. We have built access roads for construction. We have also diverted the river flow, while the dam construction process is ongoing. The inundation area where there are settlements, residents have been relocated. Then we have also spoken with several parties whose areas are affected by the inundation. And it went smoothly, there were no more problems. The forest area borrowing permit has also been completed. So everything is ready. And this project has been realized.
Is this in accordance with the planning that was prepared?
Yes, it is in accordance with our planning. Next year we are targeting to be able to sign the Power Purchase Agreement (PPA) with PLN for the Kayan Cascade 1 hydroelectric power plant with a capacity of 900 MW. Furthermore, we will prepare Kayan Cascade 2, 3, 4 and 5 for the needs of the green industrial area.
What are the challenges faced in building this project?
In Kalimantan, the demand for electricity is 2,000 MW. Meanwhile, the potential of Kayan Cascade 1-5 hydroelectric power plant is 9,000 MW. If we want to start a project, usually the party providing the funds asks if there is already demand? Or electricity users, they will ask where the electricity source comes from. So it's like the chicken and the egg, which one comes first. That is our biggest challenge. Therefore, we are trying to solve this biggest challenge. Because if the construction challenges are relatively the same. Usually licensing, that is what all hydroelectric power plants face.
So our biggest challenge is how to align demand with the supply of energy produced. In the context of Kayan Cascade hydroelectric power plant, if we can sign a PPA with PLN, we can help accelerate the energy transition carried out by PLN. If the price of electricity we offer can be cheaper than PLN's production costs, this can reduce the burden of subsidies on PLN. It is a fact that in Kalimantan, the majority of power plants are fossil fuels. So the energy transition can be achieved, efficiency can also be achieved and this country also benefits. The most important thing is that investor confidence increases because we can realize this project. If we look at the data in the last five years, there are almost no large-scale hydroelectric power plants that can be realized, except for the one owned by Mr. Jusuf Kalla in Sulawesi. This can be an encouragement for the government to achieve the targets that have been set.
The Kayan Cascade hydroelectric power plant project cost 17.8 billion US dollars, with the end of cooperation with Sumitomo, how will the company manage the project funding? Are there other investors interested? Who is interested?
As I mentioned earlier, there has been bilateral cooperation between the Indonesian and Japanese governments. Sumitomo Corp. is part of the initiative. In the course of the cooperation, there are conditions from each government. The conditions between the governments must be understood by businesses from each country. In this context, maybe we and Sumitomo have our own considerations so that we do not cooperate. So it's not that they are not interested in this project. Maybe the requirements set by Sumitomo do not match those set by the Indonesian government.
After Sumitomo withdrew, there were more potential investors from Japan, Korea and China who were interested. We were also asked to present in one of the major European countries that are members of the European Economic Community and the European Union. They are interested in investing. So as long as we are consistent with the plan, then many parties will want to join. However, we also think that this project will have a big contribution to this country.
What lessons can be learned from the end of cooperation with Sumitomo?
The interests of the state are more important, they should not be marginalized by business interests. I appreciate the difference of opinion between us and Sumitomo on this project from a business to business perspective. However, if it is not in accordance with the interests of the state, we must support the interests of the state. Mr. Prabowo has initiated energy self-sufficiency, we must support it. This is in accordance with the mandate of the 1945 Constitution, article 33, that the earth and water must be utilized as much as possible for the interests of the state. We must protect that. The Kayan River is an extraordinary gift from God for us. The Kayan River with its hydroelectric power plant must be used as a locomotive to attract green industry in this country.
So we must consistently embody article 33 of the 1945 Constitution with discipline. With that, investor interest is still high. Many parties have come to us to express their interest.
How will this project benefit the local community, both in terms of economy, workforce, and infrastructure development around the location?
This project is an ecosystem of green industry. So this is not just a hydroelectric project. This is part of a large green industry project. The benefits are numerous. For construction alone, the cost can reach USD 2 billion. The biggest job is civil, how many parties are involved, from MSMEs to large domestic industries that are helped, such as cement, iron and steel, etc. The construction is massive, this will improve the local economy.
After the Kayan Cascade hydroelectric power plant is finished, it will be able to electrify all of Kalimantan. And that also makes various regions dare to create green industrial areas, because of the availability of energy. There will be factory construction based on green energy. This is the future industry for this world. So the benefits are so great for this country, because it must be managed properly.
So it is appropriate for this project to be supported by all parties?
It is appropriate because this is in the interests of all.
Does Kayan Hydro Energy apply special technology to ensure the efficiency and sustainability of this project?
Hydroelectric power is not a new technology. In North Sumatra there is the Asahan hydroelectric power plant whose water comes from Lake Toba. The electricity is not only for the community but also for the aluminum industry there. It was already in the 1980s. In West Java, there are also several dams that were built; Jatiluhur Dam, Saguling. Therefore, we want the Kayan Cascade Hydroelectric Power Plant project to be carried out by the best human resources that we have. We can because we have more than enough human resources for that. Indeed, turbines and generators may still have to be imported from abroad. However, other than that, we can fulfill it from within the country.
What is KHE's long-term plan after completing this project? Are there similar projects in other locations that are being planned?
The construction of the Kayan Cascade 1-5 Hydroelectric Power Plant itself is a long-term project. I do not believe that there is a party that can complete it simultaneously. We have to solve the biggest challenge that I mentioned earlier; which came first, the chicken or the egg. That's why we completed the Kayan Cascade 1 Hydroelectric Power Plant, once the PPA with PLN has been signed, we will start the construction of the Kayan Cascade 2 Hydroelectric Power Plant and so on. At the same time, the trust of investors who are concerned about the green industry is also increasing. The key is nothing bombastic, all financing must be bankable and economically feasible. Because we are a private company that must consider the economic level of our business.
Eko Permanahadi: Between Cycling, Running, and Golf
Although busy with routine activities in the office, KHE President Director Eko Permanahadi makes sports a balancing activity. He chooses cycling and running as his routine sports. (Photo: Bambang Eros, DI: Raga Granada VOI)
Unlike most executives in a company who choose golf as their sport, Eko Permanahadi prefers cycling and running as his regular sports. Recently, he started trying golf because of an invitation from a colleague at the office.
“I have never played golf at all. My regular sports are cycling, especially MTB (mountain bike), and running. However, recently my colleagues at the office started inviting me to play golf. They said I should try golf,” he said, imitating his office mate’s enticement.
Every day, when he is not cycling, Eko routinely runs. “After the morning prayer, I just put on my shoes and jog for about 1 to 1.5 hours around my house. If I am invited to a marathon, I can still run 10 km, but slowly, hehehe,” he added.
Eko likes MTB because this sport is challenging and has a philosophy that can be applied in life. His favorite locations for MTB are the Pondok Pemburu (JPP) Route in Sentul, Bogor Regency, and the Gas Pipeline (JPG) Route in Serpong, South Tangerang.
“We have to climb first to the top of the hill called Pondok Pemburu, 1,300 meters above sea level. Usually, climbing takes half a day. We are tired from climbing but we still don't get there. But because I have a goal, I have to achieve it even though it's hard. There is a struggle to reach the top. When you reach the top, rest, eat, then the activity of going down the mountain begins," said Eko who prefers to cycle with a small group, a maximum of four people, sometimes just two.
When going down, Eko feels the pleasure of MTB exercise. "When going down, we enjoy it, but we still have to be alert and careful. Don't get carried away. The finish is in the Gunung Pancar area, South Sentul," said the man who once served as Chief Representative of Sumitomo Corporation (Jakarta Project Coordination Office).
He tests the Gas Pipeline Route (JPG) almost every week because the location is close to his residence in Puspita Loka Housing, BSD. "Almost every weekend I cycle in JPG. The track is challenging, there is a roller coaster descent that I initially did not dare to try. But after trying slowly, I finally dared. It was an adrenaline rush, but I still calculated it, because it was dangerous if I got injured," he said.
Trying Golf
Now he tries to play because of an invitation from a colleague at the office. He doesn't know if he can enjoy and enjoy golf besides cycling, especially MTB (mountain bike) and running which he has been doing for a long time. (Photo: Bambang Eros, DI: Raga Granada VOI)
The excitement of doing MTB on the Pondok Pemburu Route and the Gas Pipeline Route really left an impression on Eko. Because of that, he was hesitant to play golf. "I can't be sure whether I will pursue golf or not. I'm still in the exploration stage. I've only tried the driving range twice, in BSD and Cilandak," admitted the former President Director of PT Summit Niaga.
Eko doesn't want to be called a newcomer to the sport of golf. "I can't be called a newcomer yet. I'm still in the category of a new observer in golf. The thing is, I don't even hit the ball properly. Sometimes when I hit the ball it doesn't hit, hehehe," he said with a chuckle.
With this condition, Eko can't guarantee whether he will be comfortable playing golf or not. "Frankly, in my career, many things have been influenced by MTB. When I first started, I had to climb. We have to listen to what our bodies say so that we don't have a heart attack and can reach the top. That's what I apply in business," said Eko, who has worked in national and multinational energy companies.
The philosophy that Eko got from MTB is like the old adage: raft upstream, swim to the shore, suffer first, enjoy later. "In MTB, we have to work hard first to reach the top. Tired and exhausted of course, but because there is a goal, all of that can be achieved. Once achieved, it's time to go down. The tiredness and exhaustion are all paid off when going down. So it is in life," said the man born in 1970.
Political Observer
Although busy with various activities in the office, he still pays attention to his children. Eko Permanahadi gives his children the freedom to study and achieve their dreams. (Photo: Bambang Eros, DI: Raga Granada VOI)
In addition to routine and exercise, Eko Permanahadi is also a political observer. "I enjoy political debates and the activities of politicians in the country that are presented in various media," said the man who also likes to enjoy culinary delights, including on the side of the road.
His hobby of watching political activities and political debates makes him aware of the latest political developments. "It turns out that I like watching political activities. In my current job, insight into politics is useful in work," he continued.
When there are no activities, Eko spends time with his family at home. "I rarely go to the mall because I prefer to stay at home. If I want food, I just order it through the application," he said.
Eko gives his children the freedom to determine their careers and fates. "The important thing is that they do not violate the morals and religious teachings that I believe in," he said.
Therefore, Eko does not demand his children to enter a particular university or work at a particular company. "For me, they must be able to solve their own problems in real life. That's what I apply to my children. That's what can make them independent," he said.
Eko Permanahadi also does not spoil his children with facilities. "For example, regarding cellphones, I have offered them to replace their 10-year-old cellphones. But they don't want to because they still function well. They will ask for a replacement cellphone when it really can't be used anymore," said the man who has had a long career at Sumitomo.
"The current situation around the world is that it is no longer possible to increase electricity capacity through coal-fired power plants or other fossil fuel power plants. Global and domestic financial institutions are no longer providing funds for fossil fuel power projects. So how do we meet the electricity needs of the community and industry? In this context, the Kayan Cascade hydroelectric power plant plays a very important role in supporting this energy self-sufficiency program,"
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
