Coal producers asked to help PLN
Fitri Wulandari, The Jakarta Post, Jakarta
The government urged on Thursday the country's coal producers to sell more coal to the Suralaya power plant in West Java, which is owned by public utility PLN, to prevent possible blackouts in Java and Bali.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro admitted that coal producers now preferred to export their output to take advantage of high coal prices.
"Our office has advised coal producers to pay attention to national interests so that the coal can be switched to domestic use for electricity generation," Purnomo said on Thursday.
The Java-Bali power grid has been on alert since Tuesday as Suralaya, the country's biggest power plant with a combined capacity of 3,400 Megawatts (MW) could not run at full capacity due to low coal supplies. At present, Suralaya only supplies 2,200 MW.
Coal supplies to Suralaya have been running thin as its major supplier, state coal miner PT Tambang Batubara Bukit Asam (BA), ran into transportation problems.
Coal delivery from BA's mine in Tanjung Enim, South Sumatra to Tarahan port in Lampung by train has been disrupted since December 2003 due to problems affecting the railway.
PT BA officials could not be reached for comment.
The Indonesian Coal Producers Association's (APBI) data says BA supplies 6 million tons of coal a year out of the 11 million tons needed for Suralaya.
Suralaya's operator PT Indonesia Power, a PLN subsidiary, gets another 4 million tons from several companies, including Kideco (2 million), Berau Coal (1 million) and Adaro (1 million). PT Indonesia Power buys the remaining one million from the domestic spot market.
Purnomo advised PLN to secure long-term coal contracts with power plants rather than buying from the domestic spot market.
The APBI's chairman Jeffrey Mulyono explained major coal producers normally operated with long-term contracts.
Potential supplies may come from small producers who do not have long-term contracts and sell their output on the spot market. However, producers of this type, who are very sensitive to price, now prefer to export their coal rather than selling it on the domestic market.
"It is normal that they would prefer to export, given the current good prices of coal," Jeffrey told The Jakarta Post on Thursday.
Coal prices have strengthened since early this year, mainly due to soaring demand from China. The price reached US$50 per ton in March this year, compared to $25 per ton two years ago; and has now eased to $35 per ton.
Indonesia produced 109 million tons of coal last year, 70 percent of that was sold on the export market.
As of Thursday, the Java-Bali power grid could only supply 13,710 MW, while peak demand reached 13,600 MW. This left the grid with thin power reserves of 110 MW.
With an installed capacity of 17,700, the Java-Bali power grid needs reserves equal to the capacity of one big power generation unit, or 600 MW, to avoid blackouts.
PLN had warned of rotating blackouts should there be a major disruption to any big power plant in the Java-Bali power grid.
Java-Bali weekly power balance
Day Installed capacity Supply Peak Load Reserves
(MW) (MW) (MW) (MW) May 10 17,700 13,900 13,600 300 May 11 17,700 13,660 13,600 60 May 12 17,700 13,718 13,600 118 May 13 17,700 13,710 13,600 110