Techno-financial evaluation of wind power plant power purchase agreement (PPA) in Indonesia.

Power purchase agreement (PPA) of electricity is one key mechanism for power utilities to procure electricity from power producers. PPA regulates the legal obligations between both parties over a long time period thus should be designed carefully. No single PPA scheme can fit all because each power generation technologies has its own technical characteristics and risks that can affect both parties financially. For wind power, variability and intermittency of wind resources must be taken into considerations when designing the PPA. This paper evaluates the power purchase agreement between independent wind power producers (IPP) and PLN as the electricity utility company of Indonesia, particularly clauses that are related with intermittency characteristic of the wind power plant. Evaluation of the PPA finds that there is still room for improvement in the PPA in conveying the impact of resource variability to the grid and emphasize the importance of wind power forecasting that can minimize it. A new scheme is proposed to reflect the intermittency of the wind power output and provide incentive for the IPP to minimize the impact through high accuracy forecast. [ABSTRACT FROM AUTHOR]