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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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Wednesday, 13 August 14
WEEKLY MARKET INSIGHT - KONSTANTINOS KONTOMICHIS SNP BROKER
Being at the peak of the holiday season, August is, as usual, the quietest month in terms of snp transactions, yet it is also a time very critical ...
Wednesday, 13 August 14
WHAT DOES PROJECT CARGO REALLY MEAN TO INSURERS?
KNOWLEDGE TO ELEVATE
Richard Kamppari-Baker, claims manager of FP Marine Risks, explains the challenges of project cargo risk assessment from ...
Wednesday, 13 August 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN CLOSE TO 57 MONTHS LOWS
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price in August. HBA for the month of A ...
Monday, 11 August 14
LARGEST CHINESE TRADE SURPLUS EVER RECORDED IN JULY - BIMCO
China recorded a trade surplus of USD 47.3 billion in July 2014. The record high surplus came on the back of very strong export growth while import ...
Monday, 11 August 14
INDONESIAN THERMAL COAL SWAPS SEEING SOME POSITIVE TREND
COALspot.com: Indonesian coal swaps for average September 2014 increased US$ 0.20 (+0.36%) day on day and US$ 1.30 (+2.41%) per mt week on week. Th ...
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- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- White Energy Company Limited
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
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