PLN to build coal fired power plants with a total capacity of 10,000 MW until 2010.
The crash program is to be launched in 2007 to be completed in 2009. PLN already announced plan to build 24 units of PLTU in Java and other islands. In Java, 10 units of PLTU will be built with a total capacity of 7,140 MW. A plant will have a capacity of 300 MW to 660 MW.
Outside Java, PLN plans to build 14 units of PLTU with a total capacity of 1,052 MW, each with a capacity from 7 MW to 100 MW. The projects will be built in Sumatra, Kalimantan and Sulawesi.
A PLN Director, Djuanda Nugraha Ibrahim, said construction of the projects will be offered to contractors through tender with an indicative price of US$ 700 per kilowatt or US$ 5.73 billion for the 24 units of PLTU.
The government gives PLN alternatives to implement the projects. The first alternative is that PLN provides the fund under which the projects will be handed over through an open auction. Another alternative is that the EPC (engineering, procurement and construction) contractors are to provide 85% of the fund needed and PLN to put up the remaining 15%. In this case, PLN will set up special purpose company, seeks stand by loan and provide collateral with the guarantee from the government. However, the government's guarantee may draw opposition from the House of Representatives.
In addition to fund for the construction of the plants, fund will be needed to build transmission and distribution networks. And to build new relay stations.
PLN Transmission and Distribution Director Herman Darnel Ibrahim said PLN will need 200 units of new power relay stations with a total capacity of 20,000 MVA (Mega Volt Ampere) to facilitate power distribution.
Based on indicative price of US$ 750,000-US$ 800,000 for 1 MV, PLN will need US$ 7.5 billion-US$ 8 billion for the networks and relay stations. Apart from funds expected to be provided by investors, PLN plans to issue bonds.
Private electricity projects
The government also encourages Independent Power Producer (IPP) to build their own power plants in areas not reached by power plants already built by PLN. Some of he projects are located in supply crisis areas.
Among the projects to be built outside Java, there are two awarded to contractors without tender. PLN said the projects are awarded without tender as the areas where the units will be built, are facing power supply crisis. The system is allowed by a government regulation No. 3/2005 under which PLN may name the contractor to build the project without tender.
One of the two companies is PT. Cahaya Fajar Kaltim, which will build the Embalut PLTU with a capacity of 2 x 25 MW in East Kalimantan. PT. Bosowa Energi is named to build the Janeponto PLTU in South Sulawesi with a capacity of 2 x 100 MW with an investment of US$ 200 million. Earlier PLN announced that it would build only a PLTU in Bone with a capacity of 2 x 15 megawatt in South Sulawesi. Therefore, the awarding of the project to PT Bosowa Energi has raised an eyebrow especially as it happens the company is owned by Aksa Mahmud, who is a brother in law of Vice President Jusuf Kalla and owner of the Bosowa Group),
The power to be produced by the IPP will be bought by PLN with prices based on a power purchase agreement (PPA).
In 2010, around 71.9 million tons of coal will be needed by power plants
If the crash program could be carried out as scheduled, coal will be the main source of energy to generate electricity in the country. Currently oil fuel is still the main source of energy to generate electricity in the country.
PLN already has large coal fired power plants such as the Suralaya PLTU and the Paiton PLTU, but oil fired power plants are still dominant. In 2004, electric energy generated by oil fired power plants totaled 35,549 GWh as against only 30,806 GWh produced by coal fired power plants.
Coal needed by PLN to fuel power plants in 2004 totaled 15.41 million tons. IPP also have PLTU such as Paiton PLTU and PLTUs owned by Freeport, Newmont Minahasa etc.. Altogether coal needed for PLTUs totaled 22.99 million tons in 2004.
PLN said the 10 units of PLTU to be built in Java under the crash program will need 21.58 million tons of coal a year. And the ones to be built outside Java will need 5 million tons a year. Therefore, altogether, coal needed for PLTUs in Java and other islands in the country will total 71.9 million tons in 2010.
According to a PLN deputy director Tony Agus the 71.9 million tons will include 4.4 million tons for PLTU under partnership program, 2 million tons for PLTU in areas facing power supply crisis, 9.7 million tons for PLTUs to be built by IPP, 26.7 million tons for PLTU to be built by PLN under the crash program and 29.1 million tons for the existing units of PLTU. In addition to the PLN's projects, Government has also offered new private power plant projects to be built by IPP with a total capacity around 10,000 MW. If the projects succeed it will need around 20 million tons coal a year.
See the following table.
PLN said oil fuel requirement will decline from 9.2 million kiloliters this year to 7.49 million kiloliters when construction of the new PLTUs have been completed. If the program is carried out as scheduled, oil fuel consumption for PLN's power plants will be reduced from 30% to 5% of the total fuel consumption in 2010.
15 coal companies take part in PLN's tender for coal procurement
The coal procurement tender to be opened by PLN will be for 21.58 million tons a year to be supplied to 10 units of PLTU to be built in Java as part of the crash program.
Around 26 coal mining companies want to take part in the tender, but only 15 meet the criteria. The winner is to be announced in July this year.
Most or 12 of the bidders are coal mining companies operating in Kalimantan and three in Jambi and South Sumatra. Among the major bidders are PT. Berau Coal and Arutmin Indonesia.
PT Arutmin, which operates in South Kalimantan already take preparations to increase its output of low calorie coal (low rank coal) to 20 million tons in 2010. Low rank coal is the type of sub-bituminous coal with a calorific value of less than 5,000 kcal/kg. Arutmin already supplies 3.6 million tons of coal a year to the Suralaya PLTU in Banten.
PLN will offer the coal supply contract for 20 years. Therefore, the coal mining companies are required to have a coal deposit of at least 150 million tons to guarantee supply during the 20-year contract.
The type of coal to be used by PLN's PLTUs is low rank coal with a calorific value of 4,200 kcal/kg. Investors have shown little interest in low rank coal as it does not sell abroad.
The crash program to build PLTUs with a total capacity of 10,000 MW until 2009 may not meet problem in coal supply as there are a number of coal mining companies that will be eager to meet the requirement, but many doubt the projects could be carried as scheduled as it will need large investment with expensive technology. Observers say the program is too ambitious and is not realistic.
Even Energy and Mineral Resources Minister Purnomo Yusgiantoro described the program as too ambitious expressing doubt that it could be implemented in 2.5 years with so many problems that could come in the way of its implementation such as those related to land, transmission, distribution, etc..
Similarly Primary Energy Deputy Tony Agus Mulyanto said the program is not realistic and that coal PLTU needs larger investment than gas fired power plant.
In addition construction of a coal PLTU will take a longer time to completion as it will need boiler. It will take 30 months to build a coal PLTU. The Cilacap PLTU was completed in 26 months--the fastest ever--by Chengda, a contractor from China, but it will be easy to repeat that performance especially when involves many units of PLTU.
PLN and state minister for state enterprises Sugiharto, however, have expressed optimism that the program could be carried out as scheduled.
Table - 1 10 units of PLTU to be built in Java Name of projects / No Location Capacity (MW) Province 1. PLTU Jabar Selatan 2 x 300 West Java 2. PLTU Jatim Selatan, Pacitan 2 x 300 East Java 3. PLTU Labuan 1 x 300 Banten 4. PLTU Marunda 1 x 600 West Java 5. PLTU Rembang 2 x 300 Central Java 6. PLTU Suralaya Baru 2 x 660 Banten 7. PLTU Teluk Naga 2 x 300 Banten 8. PLTU Jabar Utara 2 x 300 West Java 9. PLTU Tanjung Awar-Awar 1 x 600 East Java 10. PLTU Paiton Baru 2 x 660 East Java Source : PLN Table - 2 Power plants to be built outside Java, 2007 - 2009 Name of No projects/location Capacity (MW) Province 1. PLTU Meulaboh 2 x 65 NAD 2. PLTU Sibolga Baru 2 x 100 North Sumatra 3. PLTU Sumbar 2 x 100 West Sumatra Pesisir Selatan 4. PLTU Amurang Baru 2 x 25 North Sulawesi 5. PLTU Tarahan Baru 2 x 100 Lampung 6. PLTU Mantung 2 x 10 Bangka Belitung 7. PLTU Air Anyer 2 x 10 Bangka Belitung 8. PLTU Timika 2 x 7 Papua 9. PLTU Bengkalis 2 x 7 Riau 10. PLTU Selat Panjang 2 x 5 Riau 11. PLTU Kendari 2 x 10 Southeast Sulawesi 12. PLTU Ende 2 x 7 East Nusa Tenggara 13. PLTU Asam-Asam 2 x 65 South Kalimantan 14. PLTU Bone 2 x 15 South Sulawesi Source: Energy and Mineral Resources Ministry Table - 3 Estimate of funds needed by PLN for transmission power relay stations until 2009 Description Funds needed Transmission US$ 4.3 billion Distribution US$ 3.4 billion Total length of 30,793 km transmission networks Total relay stations 1,129 units with capacity of 54.128 MVA Source: PLN Table - 4 PLTU projects to be built by IPP outside Java Name of Capacity Location projects (MW) PLTU Janeponto 2 x 100 South Sulawesi PLTU Mulut 2 x 100 South Sumatra Tambang PLTU Embalut 2 x 25 East Kalimantan PLTU Pontianak 2 x 25 West Kalimantan PLTU Mulut 2 x 25 East Tambang Kalimantan PLTU Palu 2 x 25 Central Sulawesi PLTU Lombok 2 x 25 Lombok PLTU Mulut 2 x 25 South Tambang Sumatra PLTU Bangka 2 x 10 Bangka PLTU Belitung 2 x 10 Belitung PLTU Tanjung 2 x 10 Riau islands Pinang PLTU Tanjung 2 x 7 Riau islands Balai PLTU Bima 2 x 7 West Nusatenggara PLTU Gorontalo 2 x 7 Gorontalo PLTU Ketapang 2 x 7 West Kalimantan PLTU Nunukan 2 x 7 East Kalimantan Name of Operational projects Developers in PLTU Janeponto Bosowa Energi, PT 2009 PLTU Mulut Consortium of Bukit 2008/2009 Tambang Asam - PJB Innovative PLTU Embalut Cahaya Fajar Kaltim, 2007 PT 2007 PLTU Pontianak Consortium of Maser 2008/2009 and Medco PLTU Mulut Consortium of 2008/2009 Tambang Marubeni, Komipo, Samlan and Tripatra PLTU Palu Consortium of 2008/2009 Indonesia Power and Powerindo PLTU Lombok Consortium of Maser 2008/2009 and Meta Epsi PLTU Mulut Consortium of Bukit 2008/2009 Tambang Asam and PJB Innovative PLTU Bangka Consortium of Total 2008/2009 Orbit - Sutraco and YPK PLTU Belitung Consortium of Orbit 2008/2009 Prestasi PLTU Tanjung Consortium of Medco 2008/2009 Pinang - Menamas and Barata PLTU Tanjung Consortium of Listrik 2008/2009 Balai Nusantara Sukses Makmur and Shandong PLTU Bima Consortium of 2008/2009 Arthiduta-Trakindo- Sutraco and YPK PLTU Gorontalo Consortium of Smart 2008/2009 Mitra and Walinusa PLTU Ketapang Consortium of 2008/2009 Mahakaya PLTU Nunukan Consortium of 2008/2009 Indonesia Power and Powerindo Source: Data from various sources Table - 5 Energy generated by power plants by types of fuels, (GWh), 2004 Energy Types of fuels generated Oil 35,549 Coal 30,806 Natural gas 17,745 Geothermal 3,146 Total 87,248 Source: PLN Table - 6 Fuel consumption for power plants, 1995 - 2004 Oil fuels (million liters) YEAR HSD IDO MFO Total 1995 1,818 8 1,158 2,983 1996 2,221 16 1,111 3,347 1997 2,982 34 1,590 4,606 1998 2,856 26 1,253 4,136 1999 3,253 21 1,429 4,703 2000 3,142 23 1,859 5,024 2001 3,575 30 1,793 5,399 2002 4,626 41 2,301 6,967 2003 5,024 32 2,558 7,613 2004 6,300 37 2,503 8,506 Natural Coal gas YEAR (000Ton) (MMSCF) 1995 5,593 220,032 1996 7,967 294,158 1997 9,962 228,268 1998 10,634 222,055 1999 11,414 236,612 2000 13,136 228,838 2001 14,028 222,421 2002 14,054 192,927 2003 15,260 184,304 2004 15,413 176,436 *) Including PLTMG, starting 2004 Source: PLN Table - 7 Estimate of PLN's coal requirement by 2010. Uses Total (million tons) PLTUs of partnership 4.4 program PLTUs in crisis areas 2.0 New IPP PLTUs 29.7 PLN's Crash program 26.7 Existing PLTUs 29.1 Total coal requirement 91.9 Source: PLN, Data Consult processed Table - 8 Coal mining companies taking part in PLN's coal procurement tender Name of companies Location Berau Coal, PT Berau, East Kalimantan Arutmin Indonesia, PT South Kalimantan Indexim Coalindo, PT East Kalimantan Jorong Barutama South Kalimantan Greston, PT Tekno Orbit Persada, PT East Kalimantan Surya Sakti Dharma South Kalimantan Kencana, PT Mantimin Coal Mining, PT South Kalimantan Perkasa Innakakerta, PT East Kalimantan Consortium of South Kalimantan PT.Paandgbara Sukses Makmur and PT. Bhumi Rantau Energi Consortium of PT. Kasih South Kalimantan Industri Indonesia and PT. Senamas Energindo Mulya Triaryani, PT South Sumatra Baramutiara Prima, PT South Sumatra Titan Mining, PT Jambi Source: PLN