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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, 03 August 14
LACK OF COAL SHIPMENTS FROM FAR EAST/SE ASIA, THE PRESSURE ON CHARTER RATES CONTINUED THIS WEEK
COALspot.com: This week, the freight rates were almost flat as charter rates were also almost steady from last week.
The BDI was up by 2.59 pc ...
Friday, 01 August 14
UNCERTAINTY IN ASIAN COAL MARKETS WHERE INDEX-LINKED PRICING DOMINATES - SGX
COALspot.com: In the past 3 years, seaborne thermal coal markets have been in a state of constant oversupply.
Reuters expects this oversupply ...
Friday, 01 August 14
U.S PRODUCED 19.4 MMST OF COAL IN A WEEK, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Thursday, 31 July 14
CAPESIZE: CARGO VOLUMES, COAL IN PARTICULAR, PRESENTLY NOT SUFFICIENT TO EMPLOY A GROWING FLEET - FERNLEYS
Handy
Both the Atlantic and Pacific has improved in the supramax segment over the last week, said Fernleys in Its latest weekly report . There we ...
Thursday, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
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- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
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- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
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- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
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- Ministry of Transport, Egypt
- Eastern Coal Council - USA
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- Planning Commission, India
- Kumho Petrochemical, South Korea
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- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
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- Bulk Trading Sa - Switzerland
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- Metalloyd Limited - United Kingdom
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- Baramulti Group, Indonesia
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- Renaissance Capital - South Africa
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- International Coal Ventures Pvt Ltd - India
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- Global Business Power Corporation, Philippines
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- Electricity Generating Authority of Thailand
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- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
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- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
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- Romanian Commodities Exchange
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- Georgia Ports Authority, United States
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- Ministry of Mines - Canada
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- MS Steel International - UAE
- IEA Clean Coal Centre - UK
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- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Samtan Co., Ltd - South Korea
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- Grasim Industreis Ltd - India
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- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
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- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
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- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
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- The University of Queensland
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- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
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- Global Coal Blending Company Limited - Australia
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- CIMB Investment Bank - Malaysia
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- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
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