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Monday, 06 October 14
' COAL-BY-WIRE' FROM SUMATRA TO JAVA - THE JAKARTA POST
 Coal from the island of Sumatra accounts for most of Indonesia’s low-grade lignite, a low-quality coal that receives a poor price in international markets.
Given this low pricing combined with high transportation costs and the fact that most reserves are located in landlocked areas, it is not feasible to export Sumatra’s coal out of the island.
It is more efficient to use Sumatra’s coal for a mine-mouth power plant, an approach in which we develop a power plant very close to where mines are located, use the low-calorie coal from the mines to feed the plant, and transmit the electricity, rather than transporting a low-value commodity, out of the mines.
With mine-mouth, we no longer require either barges or expensive railway-heavy infrastructure to transport coal; rather we need to have long-distance high-voltage transmission lines to bring “coal-by-wire” from mines to consumer centers, either regions in Sumatra and/or Java-Bali.
Essentially, with “coal-by-wire” we are transporting a higher-value commodity by wire from mines to customers. Coal stays in the landlocked areas and feeds mine-mouth, coal-fired power plants.
“Coal-by-wire” would definitely boost the development of a domestic market for low-grade coal. Today, our market for coal is very thin as we are one of the world’s leading exporters of thermal coal of a high quality in the international market.
Our exports have increased very significantly within the past decade on account of demand from fast-growing Asian economies. More than 80 percent of our coal currently produced is exported.
Indeed, coal is currently the most important source of energy for our economy. For decades coal has accounted for more than half of our power-generation capacity. And this will continue for a half century to come before alternative and cleaner energy sources other than coal become affordably available.
Our economy is also growing, and of course will require more electricity power and therefore coal – challenges that have to be met. Electricity generation now consumes close to 75 million tons per year, and will almost triple in the next 10 to 15 years.
However, domestic use of coal today notoriously suffers from infrastructure bottlenecks. Congested barges and ports, as well as a shortage of railways limit the transportation of coal from coalmines in two coal-producing regions, Kalimantan and Sumatra, to demand centers in Java-Bali, where most of our power plants are located.
The majority of our coal reserves in the two regions are located in landlocked areas that require rail transportation infrastructure to reach ports for export.
Either truck haul or rail is needed to transport the coal to barge ports and terminals.
Truck operating costs are about twice that of rail, but existing rail transportation infrastructure is severely insufficient.
Indonesia’s attempts to improve coal-transport infrastructure for the domestic market have not been very successful. Dedicated coal ports in Kalimantan have been planned for many years, but implementation has again faced bottleneck issues.
Specialized railways for coal in Sumatra have also been initiated, but this concept is still under development and has not yet received a higher-level mandate or legal authorization.
Delays in expanding the capacity of barge and transportation infrastructure cause inefficiencies and high transportation costs in domestic coal utilization. These high costs and infrastructure bottlenecks have held back the development of the domestic market for coal.
Our high-voltage transmission lines are also astonishingly limited. The state-owned electricity company (PLN) operates approximately 40,000 kilometers of transmission lines, with less than 15 percent of this total serving the island of Sumatra.
If we can build more mine-mouth, coal-fired power generation plants we will need to expand our transmission network across the island, interconnected to other transmission systems in Java-Bali.
A new set of lines of a high-voltage of 500 kilovolts and medium-voltage of 275 kV needs to be developed as a backbone network across the island, i.e. providing long-distance, reliable and stable transmission.
The distribution system and transformer capacity also need to be expanded to service a larger coverage of costumers and demand centers.
We are required also to develop an interconnected transmission system, as existing electricity transmission is not compatible across regions due to different systems and manufacturer standards adopted in the past.
The current initiative of developing inter-island interconnection lines between Java and Sumatra with 500kV High Voltage Direct Current (HVDC) lines needs to be completed in harmony with the mine-mouth development.
These long-distance transmission and distribution lines, as well as interconnected systems are required to exist before a system of mine-mouth power plants is commissioned to ensure that electricity produced can be transmitted in a timely manner and with minimum cost.
Both the central and local governments must work hand-in-hand to endorse incentives to encourage the private sector — independent power producers (IPPs) — to develop mine-mouth power plants.
Incentives need to be designed to enhance the financial viability of IPPs’ mine-mouth power plant projects.
PLN as an off-taker of IPP plays a fundamental role as the “coal-by-wire” agent, and has to be ready to absorb all of the risks associated with the development and operation of the system, including the difficulties in land acquisition and intra-regional compatibility of transmission systems.
Sumatra with its huge resources of low-grade coal can secure its own electricity supply and, eventually, can be the source of low-cost electricity with its energy radiating not only to Java, but also to every corner of the country.
Source: The Jakarta Post
The writer is deputy for energy and mineral resources at the office of Coordinating Economic Minister.
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Sunday, 19 October 14
LOW DEMAND PUSHES DOWN COAL FREIGHT RATES; VOLATILITY CONTINUES
COALspot.com: This week all the segments softened including BDI except for Panamax index.
The BDI was down by1.70 pct and clsoed at 944 points ...
Friday, 17 October 14
INTERNATIONAL COAL PRICES ARE AT LOWEST LEVEL; COAL STOCKS AT INDIAN POWER PLANTS ARE ALSO AT LOWEST LEVEL
International coal prices as well as coal freights are falling and reaching to its lowest levels. According to PTI, fuel stockpiles at the thermal ...
Friday, 17 October 14
U.S. COAL PRODUCTION UP BY 3.6% WEEK - ON - WEEK
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.20 million short tons (mmst) of coal in ...
Friday, 17 October 14
DRY BULK SHIPPING'S OUTLOOK NOW SHIFTING TO A LESS PROMISING ONE, SHIP PRICES EXPECTED TO FOLLOW SOON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
China’s and other Asian countries’ return to the dry bulk market last week, didn’t trigger the hoped support towards the dry bulk ...
Thursday, 16 October 14
KOREA MIDLAND POWER TO BUY 490K MT OF LCV COAL FOR 1Q 2015
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 490,000 Metric Tons (MT) of LCV (Sub) Bitumino ...
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- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
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- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
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- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
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- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
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- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
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- Planning Commission, India
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- GAC Shipping (India) Pvt Ltd
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- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
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- Indian Oil Corporation Limited
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- Semirara Mining and Power Corporation, Philippines
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- Iligan Light & Power Inc, Philippines
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- Metalloyd Limited - United Kingdom
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- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
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- Merrill Lynch Commodities Europe
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- Ministry of Finance - Indonesia
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- Economic Council, Georgia
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- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
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- CNBM International Corporation - China
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- Global Business Power Corporation, Philippines
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- Posco Energy - South Korea
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- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Australian Coal Association
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- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- White Energy Company Limited
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
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- Therma Luzon, Inc, Philippines
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- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
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- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
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- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
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- Sarangani Energy Corporation, Philippines
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- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
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- Parliament of New Zealand
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