Technology for coal gasification too expensive, PLN says
Leony Aurora, The Jakarta Post, Jakarta
While coal gasification as an alternative technology for producing electricity could reduce emissions and thus be more environmentally friendly, the cost involved would have to fall in order for it to be economically feasible.
State electricity firm PT PLN, which uses coal, as well as oil, to fuel its power plants, said that the production of gas from coal was currently too expensive.
In conventional coal-fired plants, it costs between Rp 120 (1 U.S. cents) and Rp 180 for coal to produce one kilowatt hour of power, while the gasification process would nearly double the cost, PLN director of power plants and primary energy generation Ali Herman Ibrahim said on Friday.
"It depends on the prices offered. If it is cheaper, then we would consider it," he Friday.
Ali was responding to questions about the use of alternative forms of power-generation technology that could lower emissions.
GE Energy, a subsidiary of General Electric and one of the major provider of equipment in the energy sector, for example, is currently developing new, environmentally-friendly coal gasification technology.
"It allows you to generate power just like with oil, but you will have 50 percent less pollution," GE Energy President and CEO John Rice said during a recent visit to the country to meet key players in the power sector.
According to Rice, the technology was about 20 percent more expensive than the cost of pulverized coal. However, as the firm continued to develop the technology, within three years the cost could be brought down to close to parity with straight coal plants, he said.
"For a country like Indonesia that has very significant coal reserves, (coal gasification) could be a way to have viable power generation with emissions down," he said.
Indonesia is estimated to have some 57.8 billion tons in coal reserves, of which 19.3 billion tons have been proven. With the current annual rate of coal production of 130 million tons, the country will continue to enjoy ample supplies of the fossil fuel for the next 147 years.
In order to demonstrate the feasibility of coal gasification, GE Energy would build two power plants using the technology in the United States in the next three years, Rice said.
"As soon as these steps are taken, we'll be ready to expand it more broadly, including in Indonesia," Rice said. A more detailed description of the technology would be submitted to the government, he added.
GE Energy is the second largest turbine supplier in Asia. It is also the market leader in Indonesia, with more than 198 turbines installed, serving customers such as PT Indonesia Power and the country's liquefied natural gas (LNG) producers, PT Badak NGL and PT Arun.
The government, as part of its medium-term plan, aims to construct and develop nine more coal-fired power plants by 2009 to safeguard domestic power supplies.
None of the power plants operating in the country at present uses coal gasification technology.
However, Ali said that PLN was considering testing the technology at the Umbilin mines in West Sumatra.