Tue, 10 Nov 2009
From: The Jakarta Globe
By Yessar Rosendar& Janeman Latul
The government said on Monday that it had asked domestic coal producers to set aside 30 percent of their output next year to meet demand from new coal-fired power plants.

“The government needs a guaranteed coal supply to support the 10,000 megawatt fast track’ program,” Energy Minister Darwin Saleh told members of the House of Representatives Commission VII, which oversees the energy sector. “Therefore, all coal producers should allocate 30 percent of their production to the domestic market.”

Darwin said domestic demand for coal in 2010 had been estimated at 65 million metric tons, of which 85 percent would be needed for power plants. He said the quota for domestic producers would be updated every year.

Bambang Setiawan, director general of coal, minerals and geothermal energy at the ministry, said the government would limit coal exports to 150 million tons next year.

The “fast track” program is intended to increase the country’s electricity-generating capacity by 10,000 MW. Capacity is now well below demand, resulting in frequent rolling blackouts across the country. The first phase of the program is scheduled for completion by the end of 2012. At least three new plants with a total capacity of 1,000 MW are expected to be on stream by the end of this year.

Coal industry representatives said they would have no problem meeting the government’s quota, but questioned its calculations.

“I’m confused why the government wants a 30 percent quota for domestic supply next year because I don’t think the domestic market could absorb that much,” said Bob Kamandanu, chairman of the Indonesian Coal Producers Association (APBI), on Monday. “The association has calculated that we could produce around 270 million metric tons next year. That means 81 million tons would be for domestic use while demand would only be at 60 to 70 millions.”

The Energy Ministry has forecasts that the country would produce about 230 million tons of coal this year. Output totaled 172 million tons as of the end of August. About 20 percent, or 34.7 million tons, had gone to the domestic market, APBI said.



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