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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, 24 August 14
SEA FREIGHT MARKETS STARTING TO LOOK POSITIVE; CAPES DRIVE FREIGHTS HIGHER
COALspot.com: The freight market has strengthen further this week with BDI up 7.19 pct week on week. The BDI was closed at 1,088 points while the B ...
Friday, 22 August 14
INDIAN IRON ORE ROYALTY RISE NOT LIKELY TO HURT STEELMAKERS' MARGINS - FITCH
Fitch Ratings does not expect an increase in India's iron ore royalty rates to have a major impact on the profitability of steel producers in t ...
Friday, 22 August 14
ARBITRATION CLAUSE IN LOU HELD TO REPLACE CHARTERPARTY ARBITRATION CLAUSE
KNOWLEDGE TO ELEVATE
The Claimants had claims for cargo damage against the vessel Owners arising under four bills of lading. The vessel was th ...
Friday, 22 August 14
ICAP ENERGY LAUNCHES GLOBAL COKING COAL DERIVATIVES TRADING
First contract completed and cleared on CME
COALspot.com: ICAP Energy, the energy business of ICAP plc, announces today that it has successful ...
Friday, 22 August 14
U.S WEEKLY COAL PRODUCTION UP 2.4% WEEK OVER WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.60 million short tons (mmst) of coal in ...
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- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
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