Professional Documents
Culture Documents
Final Report
February 2015
Prepared for:
Ministry of Economy, Trade and Industry
Ernst & Young ShinNihon LLC
Japan External Trade Organization
Prepared by:
E&T Research Institute, Inc.
Reproduction Prohibited
Preface
This report contains a summary of research outcomes gained from a FY2014 Research Project to Help
Promote Installation of Infrastructure/Systems of Energy Supply-Demand Mitigation Type (Fact-finding Study on
the Formation of A Yen-loan/Private-fund-based Project, Etc.) awarded by the Ministry of Economy, Trade and
Industry as one of its FY2014 projects to E&T Research Institute, Inc. (contractor) and ASAHI Glass Co., Ltd.
(co-proposer).
This research, entitled Indonesia: A Feasibility Study on Construction of the ANYER Coal-fired Power
Station, is designed to examine the feasibility of a project planned for ASC Co., Ltd, a chlor-alkali maker of the
largest class in Southeast Asia and a consolidated subsidiary of ASAHI Glass. The project, in which a coal-fired
power generation capacity will be introduced into the site of ANYER plant owned by ASC, is expected to allow
ASC to secure captive power resources while making a great contribution to easing the local electricity
supply-demand balance problems in the plants adjoining areas.
We sincerely hope this report would be found informative for all the parties concerned in this country and be
helpful in realizing the planned project.
February 2015
E&T Research Institute, Inc.(contractor)
ASAHI GLASS CO., LTD.(co-proposer)
Project Map
Abbreviation List
Abbreviations
AMDAL
Official name
Analisis Mengenai Dampak Lingkungan
Japanese translation
EIA
BAPPEDA
2000
BPLHD
BPPT
CCT
CFB
CFPP
COP
CMP
Contract of Work
CCoW
DEN
DMO
EIA
ESDM
Feasibility Study
HBA
HPB
ICI
Abbreviations
Official name
Japanese translation
ICMA
ICPR
IEA
IPP
IUP
IUP Khusus
JICA
MEMR
MOE
PLN
PPU
RTRW
(Sapcial Plan)
RUEN
RUKN
Super Critical
SPC
Sub-C
Sub Critical
USC
WU
Wilayah Usaha
business area
Table of Contents
Preface
Project Map
Table of Contents
Abbreviation List
Executive Summary
up 39%
For ASC (falling in Category 13), the tariff hikes are worried to produce grave effects on its business
operations.
On top of it, literature survey results showed that, concerning USC fired by Indonesian subbituminous coals,
there were plans for building a plant of over a million kW in terms of single-unit capacity, but plans for a
single-unit capacity construction of under a million kW were completely absent (See the References below.)
Also, hearing from the Japanes experts and referring technical literature, we found that when using the juicy
Indonesian sub-bituminous coal, since the corrosion of the material is likely to proceed at high temperature and
high pressure, requires expensive materials to prevent corrosion, scale output scale of one million kW (1,000
MW) class is necessary.
From these results, it is found that a 600,000-kW USC running on Indonesian subbituminous coals is thought
not impractical at all in technical terms. Yet, without any records of actual operation nor planning, USC of over
600,000 kW is filled with unknown risks as a proven unit, which intensifies its character as a demonstration unit.
Consequently, with the use of Indonesian subbituminous coals premised, this FS is designed to cover not only
USC (Ultra Super Critical) but also including SC (Super Critical), Sub-C (Sub-Critical) and CFB (Circulating
Fluidized Bed).
450/600 MW
SWOFF
SWOFF
SWON
Backup
150
300MW
275MW
SWON
SWON
SWOFF
SWON
275MW
450
600MW
PPU
ASC
Power Load
Normal Operation
PPU
ASC
Power Load
d) Technology types
Case 1
Technology: SC (Super Critical)
In general, the main steam temperature of supercritical (SC) is 566 or less, and the main steam
temperature of ultra-supercritical (USC) over 566 . The main steam temperature of this plant is
566 , so by definition this is supercritical (SC), but it is close to ultra-supercritical (USC).
Output: 600,000 kW x a unit = a total of 600,000 kW
PPU (SPC) retails 300,000 kW to ASC, and sells the remaining 300,000 kW to PLN.
Because ASCs power load lasts 24 hours in principle and remains stable relatively, the amount of
power sold to PLN stays constant except the periodical inspection time stated below.
In other words,
In other
2) Project Cost
aConstruction costs (design, procurement, construction works: EPC)
Tab. 1 Construction Costs (Case 1: SC 600,000 kW x a unit)
Roughly estimated cost
Item
In dollars
(US$ Mil.)
197.8
439.9
232.8
130.1
289.3
153.1
47.4
105.4
55.8
Electric/control equipment
36.6
81.4
43.0
55.6
123.5
65.4
77.9
173.3
91.7
545.5
1,212.8
641.7
54.5
121.3
64.2
600.0
1,334.1
705.9
7
8
9
Sub-total
Contingency (10% of sub-total)
Total
In dollars
(US$ Mil.)
132.0
482.9
170.3
86.8
317.6
112.0
31.6
115.7
40.8
Electric/control equipment
24.4
89.3
31.5
37.1
135.6
47.8
34.2
125.1
44.1
346.1
1,266.2
446.6
34.6
126.6
44.7
380.7
1,392.8
491.3
7
8
9
Sub-total
Contingency (10% of sub-total)
Total
In dollars
Total(US$Mil.)
600.0
1,334.1
705.9
US$ Mil.
1
Substation (additional)
1.5
18.9
3.0
Sundry cost1+2=5%
30.1
67.7
35.4
93.4
0.0
93.4
725.0
1,420.7
837.8
Total
In dollars
Total(US$Mil.)
380.7
1,392.8
491.3
US$ Mil.
1
Substation (additional)
1.5
18.9
3.0
Sundry cost1+2=5%
19.1
70.6
24.7
53.8
0.0
53.8
455.2
1,482.3
572.8
Total
c) Running costs
In dollars
US$ Mil.
Total(US$Mil.)
Operation/maintenance
8.1
204.5
24.3
Fuel
0.0
1,517.8
120.5
Land
0.0
0.0
0.0
Premiums
Include in 1
Include in 1
Include in 1
Interest payment
5.38%/8.00%
0.0
5.38%/8.00%
Corporate tax
0.0
25%
25%
In dollars
US$ Mil.
Total(US$Mil.)
Operation/maintenance
5.6
142.3
16.9
Fuel
0.0
886.2
70.3
Land
0.0
0.0
0.0
Premiums
Include in 1
Include in 1
Include in 1
Interest payment
5.38%/8.00%
0.0
5.38%/8.00%
Corporate tax
0.0
25%
25%
In the meantime, while the calculations were made by setting the PLNs purchase price cheap at 656 Rp/kWh
(approx. 6 cents/kWh) identical to that for in-house power producers surplus output, the price is actually settled
by bilateral negotiations with PLN. Considering the projects contribution to mitigating PLNs grid problems, a
likelihood is that a higher price can be settled by negotiations. If so, with FIRR standing higher than calculated
this time, this project is likely to demonstrate even more excellent feasibility in economic terms.
10
d) Outline of Host Countrys Laws Related to Socio-environmental Cares and Essential Measures Required for
Observance
n order to forward the proposed project in Indonesia, an environmental impact assessement (EIA) must be made
so as to show that the project meets major environmental requirements.
e) Vital Matters to Be Done by the Concerned Entities in the Host Country for Successful Project
While EIA preparation is under the jurisdiction of Cilegon City where the proposed project is located, the
project organizer or others responsible for the EIA preparation needs to make required applications/procedures
swiftly for obtaining any permits, approvals, licenses and whatever required.
Fig.2
(Fiscal Year)
(Quarter)
Project Schedule
2015
1
2016
2
2017
2
2018
2
2019
2
detailed FS
Planning
detailed design
SPC Formation
Securing
resource
of
Financing
IUPTL & WU
Obtaining
permits
of
AMDAL
and
11
12
Project Map
13
Chapter1
Overview of the Host Country and Sector
For the government, to keep stable electricity supplies as much as required for enabling its economic growth is
a challenge of critical significance and, therefore, its energy policy comprises of stepped-up energy diversification,
more efficient energy use, energy pricing policy and environmental problems resulting from energy use as its
principal pillars. When considering its energy supply-demand and environmental problems, Indonesia, given its
vast territories, needs to take the plural number of approach with its lands divided into Java and non-Java, the
former responsible for 70% of the countrys total energy consumption. For instance, in non-Java where
electricity demand remains low, rural electrification is counted as the top priority. Also, measures are required to
help increase the use of renewable energy sources specifically fitting to given areas each.
In addition, because Indonesias energy consumption per GDP unit is five times more than Japans, to promote
efficient energy use (energy conservation) is a matter of vital importance. Particularly, most difficult is energy
pricing policy which involves electricity tariff increases. As for energy conservation, it is essential to endeavor
for enlightening the next-generation young through educational/public relations efforts.
1) Energy Policy
Indonesian energy policy is generally described below. In Indonesia, National Energy Policy (KEN) and
Nations General Energy Plan (RUEN) are mapped out at the policy level, while Nations General Electricity Plan
(RUKN) and Electric Utility Supply Service Plan (RUPTL) represent energy plans prepared at the electric utility
level.
Fig,1-1
New KEN specifies different shares to be held by different sources in total energy supply (energy mix) and puts
their numerical targets as shown below:
Among others, the nations energy policy targets were set forth as follows:
Energy elasticity (energy consumption growth/GDP growth): To keep elasticity in 2025 under 1 so as to
cope with the GDP growth target.
Energy intensity (energy consumption per GDP unit): To cut by 1% annually in the years to 2025.
Stance toward nuclear power plants: With nuclear power generation positioned as a final option, room for
possible introduction is left. It reflects the governments long-cherishing recognition that the country
should be in need of nuclear introduction in the long run.
In its effort to envisage an energy shape from now on, the Ministry of Energy and Mineral Resources, based on
the New KEN framework, is currently preparing the RUKN (2015-2040), or a new version of Nations General
Electricity Supply Plan. Also, the Presidential Decree on the National Energy Policy 2006 and Energy &
Mineral Resources Ministrys Vision 25/25, both prepared in the past, will be reviewed.
Reference: Presidential Decree on the National Energy Policy (2006)
In order to bolster the legal basis for the national energy policy, the Presidential Decree on the National Energy
Policy was promulgated by the President as a decree from the Executive Branch. According to it, on top of
energy elasticity (efficiency of energy use: energy consumption growth/GDP growth) to be kept under 1% by
2025, the government intends to promote the development of coal, natural gas and renewables so as to realize a
sharp cut in oil share in the primary energy supply mix. The planned primary energy mix by source is figured
out below.
18
5%
Coal
33%
Renewable energy
Natural gas
30%
17%
Oil
20%
Bio fuel
5%
geothermal
energy
5%
Others
2%
Liquefied coal
Source: Study Team (based on Presidential Decree on the National Energy Policy (2006))
Reference: Energy & Mineral Resources Ministrys Vision 25/25 (2010)
The Vision 25/25, which was a plan announced in 2010 originally by the Ministry of Energy and Mineral
Resources, revised the planned share of renewables for 2025 sharply upward to 25% from 15% specified in
Presidential Decree of 2006. Also, the Vision put that energy consumption in 2025 should be trimmed by 15.6%
by virtue of energy conservation and diversification efforts compared with the case without any measures taken
(estimated to total 3.3 billion tons oil equivalent).
25%
Oil
30%
Natural gas
Coal
22%
23%
Source: Study Team (based on Energy & Mineral Resources Ministrys Vision 25/25 (2010))
19
Government supports for renewable energy supply/use and energy conservation efforts
a) Generated Output
PLN-involved total generated output in Indonesia as a whole (generated output by PLN+ purchased output by
20
PLN) has been changing as illustrated below. Compared with 93,325GWh in 2000, generated output nearly
doubled to 200,317GWh in 2012. Over the period Indonesias GDP growth was about 6.4% on average.
Fig,1-4 Indonesias Total Generated Output (Generated Output by PLNPurchased Output by PLN)
21
In Indonesia, most of electricity output is consumed in Java (particularly its western area where Jakarta is
located).
Tab.1-1 PLNs Electricity Sales Amount (GWh)
Year
Up/
2008
Area
Java Bali
Non-Java Bali
Total
down
Up/
2009
(%)
Up/
2010
down
(%)
down
Up/
2011
(%)
down
Up/
2012
(%)
down
(%)
100,774
5.4
101,319
0.5
110,309
8.9
117,593
6.6
128,513
9.3
28,244
0.9
33,263
17.7
36,988
11.2
40,399
9.2
45,478
12.6
129,018
6.4
134,582
4.3
147,297
9.4
157,993
7.3
173,991
10.1
In Java/Bali district, the industrial sector accounts for the largest share in total demand at 38.5%. In East
Indonesia and Sumatra, industrial sectors in these districts hold rather modest shares at 11% and 15.8%,
respectively. Also, in these districts, residential demand dominates the whole, taking as much as 62% and 55%,
each.
22
Thus, most of the electricity demand growth originates from Java where Jakarta, the countrys capital, is located.
And yet, Indonesia is an archipelago country consisting of more than 17,000 islands and, with scant progress
made in local electrification in not a few islands, as much as about 20% households out of the whole are forced to
live without electricity.
Fig,1-6 PLNs Electricity Output Sold in 2012 by Area and Projections for 2022
23
Fig,1-7
Next, according to the electricity demand outlook projected by the Ministry of Energy and Mineral Resources,
electricity needs over the 10 years from 2013 through 2022 will inflate by 7.4 GW/year on average and generating
capacity needs should exceed 100 GW by 2022. Also, focusing on the period from 2013 through 2031, the pace
of demand increase will average 12.4 GW/year, with generating capacity requirements amounting to 254 GW.
This surpasses Japans generating capacity in recent years. (According to the White Paper 2013, Japans
installed capacity totalled some 245 GW in 2011.)
Fig,1-8
24
e) Electricity Tariffs
In Indonesia electricity tariffs have been kept low conventionally thanks to subsidies. However, in order
to curb fiscal burdens stemming from the ballooning subsidies year after year, the parliament adopted
electricity tariff increases in January 2013. Pursuant to the adopted rule that electricity tariffs should be
raised by 3~4% every three months, and a total of 15% hike in electricity tariffs was made as of October
2013.
f) Industrial Electricity Tariff Increases/Automatic Tariff Adjustment System
The Ministry of Energy and Mineral Resources announced on January 21, 2014 that industrial electricity tariffs
(applicable to large business operators) would be raised from May 1 onward. It will be a 38.9% rise for the
contract capacity of over 200kVA (contract category I-3), with the tariff to be raised subsequently by 8.9% every
2~4 months. As for the contract of over 30,000 kVA (contract category I-4), a total of 64.7% rise is scheduled by
increasing the tariff by 13.3% every 2~4 months. As a result, incremental electricity tariffs paid by industrial
consumers are projected to reach a total of 8.85 trillion Rupiah.
Also, on the same day, or January 21, 2014, the parliament passed the government measure to introduce an
automatic electricity tariff adjustment system applicable to electricity consumers falling either one of the four
contract categories listed below.
These four contract categories have received no subsidies since October 2013. Under the new system,
electricity tariffs for the four contract categories are planned to be linked to exchange rates, oil prices and inflation
rates. Though details of how to calculate individual tariffs need to be settled in the days to come, the shift to the
new system is expected to curb government spending by an estimated 142 billion Rupiah.
In addition, the Energy & Mineral Resources Ministry plans to expand the coverage of the automatic electricity
tariff adjustment system, under which electricity tariffs fluctuate based on economic indices and, from 2015
onward in the earliest case, electricity tariffs (applicable to a total of 17 categories), except those to residential and
commercial consumers whose electricity use is limited, are slated to be covered by the adjustable rating system.
25
Fig,1-9
(Billion Rp
120000
103331
100000
93178
78577
80000
60000
53720
40000
32909
20000
58108
36605
12511
4739
4097
3470
2002
2003
2004
0
2005
2006
2007
2008
2009
2010
2011
2012
By the early 2000s, partly in reflection to phased electricity tariff increases, the government subsidies have
remained within the range of 3~4 trillion Rupiah. Afterward, due to soaring oil prices combined with curtailed
government subsidies for oil products, fuel costs jumped sharply, which consequently drove the government
subsidies up.
The government subsidies, having dented briefly in 2009 thanks to falling fuel prices, advancing
fuel switching and so on, picked up again later and reached 103 trillion Rupiah in 2012.
Tab.1-2 PLNs Average Unit Cost for Electricity Sold(Rp/KWh)
Year
2008
2009
2010
2011
2012
Java Bali
634
661
697
709
732
Non-Java Bali
729
681
706
729
717
Total
655
666
699
715
728
\5.27
\6.42
\6.50
\6.22
\6.50
Area
(In yen)
The values in terms of yen equivalent were calculated based on the yearend (last day of December, each year).
Source: PLN Annual Reports, each years edition
Thermal
Diesel
Gas turbine
Geothermal
Combined
Average
810.14
3,168.58
2,362,99
1,121.50
1,001.80
1,217.28
26
Year
2008
Area
down
Up/
2009
(%)
Up/
2010
down
down
(%)
Up/
2011
(%)
down
Up/
2012
(%)
down
(%)
Java Bali
63,884
9.2
66,960
4.8
76,875
14.8
83,411
8.5
94,098
12.8
Non-Java Bali
20,603
16.1
22,678
10.1
26,099
15.1
29,434
12.8
32,624
10.8
Total
84,487
10.8
89,638
6.1
102,974
14.9
112,845
9.6
126,722
12.3
(In yen)
\680
\863
\958
\982
\1,131.8
billion
billion
billion
billion
billion
Administrative organizations involved in the electricity sector include the National Energy Commitee (DEN)
responsible for energy development policy and general policy-making on energy use, the National Development
Planning Agency (BAPPENAS) in charge of national development policy and coordination, the Ministry of
Energy and Mineral Resources (MEMR) which supervises PLN and covers overall fields of resources and energy,
the Office of the Minister for State-run Enterprises which owns/manages PLN, the Ministry of Finance (MOF)
which is empowered to approve budgets, the National Energy Coordination Committee (BAKOREN) responsible
for energy policy-making and coordination, and the Indonesian Nuclear Power Agency (BATAN) engaged in
nuclear power generation-related research/development.
27
Fig,1-10
National Energy
Council
(DEN)
Development/others
policy-making &
coordination
National Development
& Planning Agency
BAPPENAS
Nuclear
research/development
Office of Minister
for State-run
Enterprises
Ministry of
Finance
MOF
Approval of
budgets
Nuclear
regulatory service
Nuclear Agency
BATAN
Nuclear Regulatory
Agency
(BAPETEN)
Guidance
/coordination
PT. PLN
Generation
Tnsmission/load
dispatching
Customer service
(Transmission/load
dispatching)
P3B Java Bali
P3B Sumatra
Power
wholesale
IPPs
Power
wholesale
Local gov.
(Generation)
Indonesia Power
Java Bali Power
Generation
(Generation/transmis
sion to specified
districts)
PT PLN Batam
PT PLN Tarakan
Support
Surplus power
Village
Cooperatives
KUD
In-house
generation
Consumers
Consumers
Consumers
Consumers
(Note) Generated output by any power producers other than PLN is required to be wholesaled to PLN in
principle.
But, under the former Electricity Act, from the aspect of stable electricity supply to industrial
complexes, four power producers, including PT Cikarang Listrindo and PT Krakatau Daya Listrik, are allowed, as
special cases, to supply electricity directly to the specified districts.
Source: Prepared based on Energy/Electricity Situations in Major Asian Countries 2011 appearing on Electric
Utility Industries Abroad, First Editions Supplement No. 2, published by the Board of Overseas Electric Power
Research.)
28
conducting researches and studies on energy & mineral resources. In 2010, in its effort to encourage the
development and promotion of renewable energy, the MEMR newly set up the General Bureau of New &
Renewable Energy and Conservation (DGNREEC). The formation of the new General Bureau (into which
incorporated are the geothermal department, separated from the former General Bureau of Coal and Geothermal,
and the energy utilization department from the former General Bureau of Electricity and Energy Utilization)
proves effective in strengthening its regulatory and supervisory powers over renewable energy overall.
The General Bureau of Electricity (the former General Bureau of Electricity and Energy Use), one of the
general bureaus comprising of the MEMR, assumes regulatory and supervisory responsibilities over the electricity
sector, and fulfills such roles as the electricity sector-related policy-making, standards/procedures-setting,
coordination of criteria, and technical guidance/evaluation. The Bureau is also responsible for the preparation of
the Nations General Electricity Plan (RUKN) which contains a host of information including electricity
supply-demand outlook, grid network plan, investment/financing policy, and new/renewable energy utilization
policy.
29
Transmission/substations
Load dispatching
Distribution/marketing
Java Bali
PLNs power plants
Indonesia Power
Java Bali Power
Generation
IPPs
Sumatra
North Sumatra Power
Generation BU
South Sumatra Power
Generation BU
IPPs
Java Bali
Transmission/Load
Dispatching Center
(P3B Java Bali)
5 distribution offices
Sumatra
Transmission/Load
Dispatching Center
(P3B Sumatra)
7 local branch offices
Others
9 local branch offices, and
PLN Batam
PLN Tarakan
Source: Prepared based on reference materials from the Board of Overseas Power Research, among others.
Under the companys president, PLN has 8 executive directors, out of which five assume the reins of
fuels/personnel general affairs, construction, materials, sales/risk management, and finance, while the remaining
three responsible for operations in the areas of Java/Bali, West Indonesia and East Indonesia, respectively.
In
October 2011, when the Yudhoyono administration shuffled its cabinet, the former President Dahlan Iskan took
office as the Minister for State-run Enterprises and the post of PLN President was succeeded by the former
Director Nur Pamudji (responsible for primary energy).
As a result of the start of the new administration in October 2014, massive shuffling was done among the
Energy & Mineral Resources Ministrys key officials, including the General Bureaus heads, and among PLNs
leading officials, including the president. Actually, in December 2014 the government announced public
invitations to these posts.
Fig,1-12
30
It is ruled that generated output by IPPs should be all purchased by PLN, and that private operators engaged in
IPP operations, when selling their generated output to PLN, are required in principle to do so through competitive
biddings. However, in such cases as renewables-based power production (micro hydro, geothermal, biomass,
wind, photovoltaic), surplus power, and supplies to electricity-stricken areas, IPPs can directly be
nominated without bidding (Note).
In February 2014, when interviewed by media, Director Jarman for the General Bureau of Electricity expressed
that he hoped 50% of the power construction budget would be funded by private capital.
(Note) Among others, as special cases, rich-experienced IPPs, when installing an additional capacity within the
same site (to be a more-efficient and less-environmental-laden capacity if the new one is identical to conventional
unit in size), are allowed negotiated contracts without bidding.
amended, though the real state of things seldom stands in that way. Now that RUKN, revised in 2008, needs to
be approved by the parliament as ruled by the Electricity Act as amended in 2009, the MEMR-sponsored
government plan proposed to the parliament has not been revised to date and left without fully considered.
Currently under preparation is a revised plan (2015-2040), which contains the concept of how to increase
electricity tariffs.The latest version of RUPTL, or RUPTL2013 (2013~2022), was published in December 2013 in
such form as reflecting RUKN 2008.
Tab.1-6
Nations
General
Plan
(RUKN)
Prepared by
(MEMR)
Outline
power
development
plan,
31
The development plan under RUPTL2012-2021 puts electric power demand in 2022 at 358,000GWh
(compared with 173,990GWh sold in 2012), with the growth rate projected to be 8.65% per annum on average.
Additional installed capacities in 2012~2021 are projected at some 57.3GW in Indonesia as a whole, which means
an addition of an average 5.7GW yearly.
32
Capacity
29,159MW
6,702MW
Inspections (thermal)
Outage, etc.
The-day supply capacity available
22,457MW
21,968MW
489MW
To sum up, the reserve capacity while running is found virtually absent, thus leaving the electricity
supply-demand balance in a very serious state. Meanwhile, PLN defines the case where the reserve capacity
while running (the-day supply capacity available the-day demand) drops below the maximum single-unit
capacity (Sulalaya Plants 600MW) as the state of SIAGA (emergency).
capacity falls down due to any accident on the plant side, PLN wont be able to keep an electricity supply-demand
balance and, therefore, makes it a rule to take a prior-confirmed procedure to cut part of the grid system from the
network (forced outage).
33
Period
2006-2009
2010-2014
Developers
PLN100%
PLN 44%(422 W)
IPP 56%(531 kW)
Developed
Approx.10,000MW
Approx.10,000MW
capacities
Others
Background
(purpose)
Power source
Emergency
3,100MW
power
Others
development
4,452MW
Renewables introduction
Coal 100%
Legal grounds
Presidential Decree(No.71/2006
Presidential DecreeNo,4/2010
Required funds
Source: Study Team (based on 1st Crash Program, 2nd Crash Program (Early stage))
1st Crash Program
Because PLN attached the importance most to speediness in power plant construction and the state-of-art
technologies were not required as far as certain technology levels were satisfied, most projects under the First
Crash Program were awarded to the Chinese firms in accordance with the policy that any firms offering the floor
price in bidding should be the winner. However, due to difficulties in raising funds in China as a result of
financial crisis, and delays in construction by the Chinese contractors, among other things, only a unit, or the No.
1 unit (320,000 kW) of Labuan Power Plant was put on stream within 2009. Moreover, the power plants already
commissioned have suffered frequent accidental outages caused by malfunctioning facilities, and the rate of
attainment remained at 64.2% out of 6,377 MW at 2013 yearend. In the meantime, the MEMR explains that
3,550 MW, or the remaining 35.8% of the originally planned capacity development, is slated to be completed by
2014/2015.
2nd Crash Program
In reflection to the intensifying issues of warming-gas emissions and coal-hauling infrastructure construction,
the Second Crash Program is characterized by stepped-up efforts for power source diversification, whereby the
importance is attached to the development of such renewables as geothermal (accounting for about 40% of the
program) and hydro, and IPP-based development is introduced as much as 55.7% of the whole.
government endorsement, of which works simply delayed due to poor financing. Some of them were forced to
34
cancel their development for such reasons as a gas supply shortage and insufficient preparation for geothermal
development. As a result, though the Second Crash Program was reviewed twice in January 2012 and in August
2013, with planned developed capacity expanded to 17,018 MW, none of its projects has been completed by 2013
yearend.
c) Investment Needs
Investments required for the development of such infrastructure as power plants, substations and transmission
capacities amount to an estimated 125.2 billion US$, in which included are 71.1 billion US$ for PLN projects and
the remaining for IPP projects in the private sector. Annual investments in the years from 2013 through 2022 are
shown below.
Fig,1-15
Source: RUPTL
So far, many PLN projects have been implemented with financing by foreign governments-credits (two-step
loans). But, since 2006, this type of credits have been shrinking and a growing amount of bonds (local & global)
have been issued. While PLN has financed its projects under the Crash Programs mainly by the
government-guaranteed credits, PLN, in recent days, has been raising funds from multilateral bonds, like World
Bank-backed pumped power construction and JICA-based Java Sumatra interconnected transmission.
35
Fig,1-16
Kalimantan
South PapuaPapua
Sumatra
Sulawesi
Java
bituminous-subbituminous coals
lignite
Source: Study Team based on the document, the information that JCOAL provided
Indonesian efforts to prospect coal resources are still under way nationwide. That is, because new coal seams
are still discovered, the distribution map can be revised in the days to come.
resources and reserves by area. Coal resources are defined as total quantities of coal available in a given area,
while coal reserves mean the quantities of coal recoverable feasibly in economic terms.
Indonesias coal resources amount to some 105.2 billion tons, and reserves 21.1 billion tons. By area, the
larger portion is held by Sumatra and Kalimantan.
36
It has turned out that Java and Sulawesi alike are poor of coal, of which scarcity can be noted clearly from the
coal distribution illustrated in Fig,1-16. On the other hand, the scarcity of coal resources and reserves in Papua
areas is attributable mainly to scant progress made in prospecting efforts there. Depending on prospecting
developments ahead, the areas still have the possibility to prove availability of coals which feature high calorific
values.
37
Fig,1-17
Mt
120,000
100,000
80,000
Sumatra
JAWA
40,000
Kalimantan
20,000
East
60,000
Indonesia
0
Measured
Resources
Indicated
Resources
Measured Resources
Sumatra
JAWA
Kalimantan
East Indonesia
Total
7,699.18
2.09
14,537.00
53.09
22,291.36
Inferred
Resources
Indicated
Hypothetic
Resources
Resources
10,634.37
0.00
5,138.73
33.09
15,806.19
Total
Inferred Reserve
Total
Hypothetic Reserve
13,995.92
6.65
18,014.53
181.90
32,199.00
Mt)
20,153.72
5.47
14,635.97
95.72
34,890.88
52,483.19
14.21
52,326.23
363.80
105,187.43
Fig,1-18
25,000
Mt
20,000
Sumatra
JAWA
Kalimantan
East
15,000
Indonesia
10,000
Total
5,000
0
Proved
Reserve
Sumatra
JAWA
Kalimantan
East Indonesia
Total
Probable Reserve
Total
Proved Reserve
Probable Reserve
904.80
10,644.45
Total
Mt
11,549.25
0.00
0.00
0.00
4,624.57
4,957.90
9,582.47
0.06
0.06
0.12
5,529.43
15,602.41
21,131.84
38
It is noted high-rank
coals (High: 6,100-7,100) and ultra-high-rank coals (Very High: >7,100) are limited, but coal resources with a
calorific value of over 7,100 kcal/kg are put at a billion tons.
Resources
(kcal/kg)
Total
Reserve
Proved
Reserve Probable
Reserve
Total
(%)
Low(<5100)
21,227.63
20.08
7,603.88
1,105.40
8,709.28
41.21
Medium(5100 -6100 )
69,726.02
66.29
7,063.52
2,904.41
9,967.93
47.17
High(6100-7100)
13,220.61
12.57
861.73
1,410.44
2,272.17
10.75
Very High(>7100)
1,013.19
0.96
73.29
109.18
182.47
0.87
105,187.44
100.00
15,602.41
5,529.43
21,131.85
100.00
Fig,1-19
12.57%
0.96%
20.18%
Low(<5100)
Medium(5100 -6100 )
High(6100-7100)
Very High(>7100)
66.29%
Source: Indonesia Coal Book 2012-2013
39
Fig,1-20
Mt
12,000
10,000
8,000
Low(<5100)
Medium(5100 -6100 )
6,000
High(6100-7100)
4,000
Very High(>7100)
2,000
0
Proved Reserve
Probable Reserve
Total
Next, examining coal resources by rank and area, Kalimantan reportedly contains high-rank coals of about 11.8
billion tons and ultra-high-rank coals of 940 million tons. Though not illustrated here, Papua is expected to have
high-rank coals of 9 million tons and ultra-high-rank coals of 300 million tons lying underground within the area..
Fig,1-21
Mt
80,000
70,000
60,000
Low(<5100 kal/gr)
50,000
40,000
Medium(5100 -6100
kal/gr)
30,000
High(6100-7100)
20,000
10,000
Very High(>7100)
0
Sumatra
JAWA
Kali
Sulawesi Papua
-mantan
Total
Mt
Sumatra
JAWA
Kali
Sulawesi
-mantan
Low(<5100 kal/gr)
18,990
0.9
2,220
0.2
32,040
10
37,360
220
1,040
11,790
10
High(6100-7100)
Very High(>7100)
Total
940
52,070
12.9
52,310
230.2
Papua
Total
21,000
90
70,000
13,000
30
1,000
129
105,000
40
The large part of Indonesian coal reserves are the coals of low calorific values. As aforementioned, coals
under 5,100 kcal/kg account for 41% of coal reserves. No formal standards are available for defining low-rank
coals. Accordingly, with the low-rank coals tentatively defined here as those of which calorific value is around
5,100 kcal/kg or less than that, their distribution is summarized. These coals can be counted as categorized into
subbituminous coals and/or lignite. Low-rank coals are found abundant in Kalimantan, South Sumatra, Jambi
and Riau. In recent years, the Indonesian government has been promoting the positive use of low-rank coals with
which the country is blessed. The governments move is also reflected on this project, coal-fired power plant
construction, which will be discussed later.
As in any other countries, there are two kinds of mining rights in Indonesia; prospecting rights and mining
rights. While these two kinds of rights are also applied to any minerals other than coals, their explanations are
made here by narrowing the target to coals alone.
The right of prospecting is the right to prove resources and reserves through prospecting efforts with such
techniques as boring. As a result of prospecting, potential concessions attract firms to be engaged in coal mining
and marketing. The right of mining and marketing coals is called the right of mining. These two kinds of
rights are issued by the national and/or local governments.
Currently existing rights can be grouped into two types. One is the so-called CCoW (Coal Contract of Work)
issued by the national government and concluded between the national government and major coal mines. The
other is the so-called IUP issued by local governments to coal companies. Of these, the former was abolished
under the newly-enacted Mining Act (2009 Presidential Decree No.4; UUNo4/2009 Tentang Pertambangan
Mineral dan Batubara). Existing CCoW, therefore, will be registered in the capacity of IUP, if any renewed
ahead.
IUP is further grouped into a few types. They include Mining Business Permits (IUPIzin Usaha
Pertambangan), Civil Mining Permits(IPR:Izin Pertambangan Rakyat), and Special Mining Business Permits (Izin
Usaha Pertambangan Khusus), but explanations of their details are omitted here.
CCoW has been eligible to hefty privileges so far, but, under the new Mining Act, the privileges set to diminish
gradually. In specific terms, because an application made from now on is nothing but an application for IUP, its
concession area will be narrower and its duration before renewed will be shorter, among other things. On the
other hand, the rate of the mine products tax (imposed in proportion to mining output) will be cut from 13.5%
currently applicable to CCoW to 37% now imposed on IUP.Generally speaking, the national government, so far
41
having given big privileges to a limited number of mines in return for heavy taxing on them, now aims at more
prudent control by reviewing its big powers and assigning the privileges to local governments.
Major Points of the New Mining Act
From now on, major contents of the new Mining Act are stated by item.
. Domestic Market Obligation
Under the act, enforced for the security of domestic coal demand, the mines are allowed coal exports only when
domestic demand is satisfied. Hence, the Indonesian government needs to determine the size of domestic coal
demand and, also, set the minimum ratio (%) of domestic coal marketing (supply) to coal output at the mines.
As a matter of natural course, some of the mines are producing coals of which qualities are suitable for the
domestic market, while others mining those which are more fitting to exports. For this reason, in order to fulfill
the domestic market obligation, the mines are allowed Quarter Transfers among them.
The amount of domestic market obligation is set in June every year in reference to the three indices below:
Coal demand projected by domestic producers and consumers for the next year
Coal production planned by coal companies for the next year
Energy & Mineral Resources Ministers rules on domestic coal demand and the minimum ratio of domestic
coal marketing
In relation to the above, with a watch-dog schedule installed, the firms failing to meet or observe their domestic
market obligation are imposed penalties.
As shown inTab.1-11, domestic supply amounted to 67.25 million tons in 2012 and increased to 74.32 million
tons in 2013. Of the supply in 2012, coal-fired power plants received 54.69 million tons, accounting for the
largest portion of 81%, followed by cement, textile and fertilizer which, when combined, received 12.23 million
tons or 18.1%, and foundry/metallurgy around 330,000 tons or 0.49%. Among the coal-fired power plants, the
largest is PLN (55.29%). IPP also claims a slice as big as 23.72%. Among others, cement accounts for 12.49%,
followed by textile/textile manufacturing at 2.87%.
The compositions changed little in 2013, topped by coal-fired power plants with 60.49 million tons or 81%,
followed by cement and textile/fertilizer with 13.09 million tons or 17.61%, and foundry/metallurgy 740,000 tons
or 1%. Among the coal-fired power plants, PLN remains as the largest at 49.29 million tons, which holds
66.32% of the whole.
In 2013 coal output is projected at 366.04 million tons and the minimum domestic coal marketing ratio is set at
20.30%. The minimum domestic coal marketing ratio has been set at 25% so far. But, because output grew
more than planned, and because domestic consumption did not grow so much as projected, the ratio of domestic
supplies to total coal output has been on the decline.
42
Tab.1-11
Domestic Supply Outlets under Domestic Market Obligation in 2012 & 2013
2012
Demand
(million tons)
2013
Gross
GCV
Calorific Value
kg/kcal)
(kg/kcal)
Demand
(million tons)
Gross
GCV
Calorific Value
kg/kcal)
(kg/kcal)
PLTU
coal-fired
power plants
1.PT.PLN
37.18
55.29
4.000-5.200
49.29
66.32
4.000-5.200
2.IPP
15.95
23.72
4.000-5.200
9.82
13.21
4.000-5.200
0.83
1.23
5.800
0.83
1.12
5.800
0.54
0.80
5.000
0.55
0.74
5.000
0.19
0.28
5.000
54.69
81.32
60.49
81.39
1.PT.INCO
0.14
0.21
5.900
0.20
0.27
2.PT.ANTAM.Tbk
0.19
0.28
6.600
0.19
0.26
6.600
0.35
0.47
4.500-5.000
0.74
1.00
A. 3.PT.FREEPORT INDONESIA
sub
total
B. foundry/metallurgy
2.PT.Krakatau Steel
sub
total
5.900
0.33
0.49
8.40
12.49
4.100-6.300
9.80
13.19
4.200-6.300
1.93
2.87
5.000-6.500
1.93
2.59
5.000-6.500
1.30
1.93
4.200-5.400
0.76
1.02
4.200
0.60
0.89
4.500-5.500
0.60
0.81
4.500-5.500
sub
total
12.23
18.18
13.09
17.61
total
67.25
100.0
74.32
100.0
cement
and textile/fertilizer
1. cement
C
2.
textile
3. fertilizer
4.
pulp
DMO
domestic
supply (Share of DMO)
32,85320.4%
328.53 (20.4%)
36,60420.3%
366.04 (20.3%)
Next, shown in Tab.1-12 are the quotas to individual mines in 2012 and 2013. The data are on CCoW mines,
state-run mines (PTBA) and IUP mines. Focusing on 2013, the largest is KPC Mine (No. 25 in the table below)
at 10.76 million tons, or 14.5% of the whole, followed by Adaro Mine at 10.15 million tons, or 3.7% of the whole.
Among others, the mines of which quotas are over a million tons include Arutomin Mine, Berau Coal Mine,
Indominco Mandiri Mine, Insani Baraperkasa Mine, Kideco Jaya Agung Mine, Mahakam Sumber Jaya Mine,
Trubaindo Coal Mining Mine, and state-run Bukit Asam. They are all CCoW mines. On the other hand, none
of IUP mines are allotted over-a-million-ton quotas.
43
Tab.1-12
A
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
2012
<CCoW>CCoW)
Quotas
PT Adaro Indonesia
PT Antang Gunug Meratus
PT Artmin Indonesia
PT Asmin Koalindo Tuhup
PT Astaka Dodol
PT Bahari Cakrawala Sebuku
PT Bangun Banua Persada Kalimantan
PD Baramarta
PT Barasentosa
PT Berau Coal
PT Borneo indonesia
PT Baturona Adimulva
PT Batualam Selaras
PT Bharinto Ekatama
PT Dharma Puspita Mining
PT Firman Ketaun Perkasa
PT Gunung Bayan Pratamacoal
PT Indominco
PT Indexim Coalindo
PT Indominco Mandiri
PT Insani Baraperkasa
PT Jorong Barutama Greston
PT Kadya Caraka Mulya
PT Kalimantan Energi Lestari
PT Kaltim Prima Coal
PT Kideco Jaya Agung
PT Kartika Selabumi Mining
PT Lanna Harita Indonesia
PT Mahakam Sumber Jaya
PT Mandiri Inti Perkasa
PT Multi Harapan Utama
PT Multi Tambang Jaya Utama
PT Marunda Graha Mineral
PT Nusantara Thermal Coal
PT Perkasa Inakakerta
PT Pesona Khatulistiwa Nusantara
PT Pendopo Energi Batubara
PT Riau Bara Harum
PT Santan Batubara
PT Singlurus Pratama
PT Sumber Kurnia Buana
PT Tanito Harum
PT Tanjung Alam Jaya
PT Tambang Damai
PT Tubaindo Coal Mining
PT Teguh Sinar Abadi
PT Wahana Baratama Mining
sub
total
9,826,328
614,146
5,695,824
726,739
0
71,650
204,715
767,682
0
4,517,450
767,682
245,658
12,283
0
0
511,788
899,619
2,988,841
92,122
0
1,001,329
229,383
71,650
111,570
9,274,007
6,960,316
46,768
614,146
1,740,079
675,609
473,916
106,313
242,149
204,715
552,731
427,445
0
307,073
552,731
516,957
123,853
685,796
138,183
0
1,576,307
200,130
921,218
55,696,899
44
2013
14.6%
0.9%
8.5%
1.1%
0.0%
0.1%
0.3%
1.1%
0.0%
6.7%
1.1%
0.4%
0.0%
0.0%
0.0%
0.8%
1.3%
4.4%
0.1%
0.0%
1.5%
0.3%
0.1%
0.2%
13.8%
10.3%
0.1%
0.9%
2.6%
1.0%
0.7%
0.2%
0.4%
0.3%
0.8%
0.6%
0.0%
0.5%
0.8%
0.8%
0.2%
1.0%
0.2%
0.0%
2.3%
0.3%
1.4%
82.8%
Quotas
10,151,832
860,065
6,700,209
860,065
94,607
0
206,416
860,065
344,026
4,902,374
344,026
516,039
20,642
349,531
61,925
516,039
695,824
0
430,033
2,677,901
1,255,696
240,818
59,861
516,039
10,760,942
6,536,499
154,812
602,046
1,892,145
774,059
963,274
206,416
344,026
259,740
782,832
860,066
20,642
258,020
688,053
688,053
148,365
619,247
103,208
258,020
1,224,906
129,010
825,633
61,764,047
13.7%
1.2%
9.0%
1.2%
0.1%
0%
0.3%
1.2%
0.5%
6.6%
0.5%
0.7%
0.0%
0.5%
0.1%
0.7%
0.9%
0.0%
0.6%
3.6%
1.7%
0.3%
0.1%
0.7%
14.5%
8.8%
0.2%
0.8%
2.5%
1.0%
1.3%
0.3%
0.5%
0.3%
1.1%
1.2%
0.0%
0.3%
0.9%
0.9%
0.2%
0.8%
0.1%
0.3%
1.6%
0.2%
1.1%
83.1%
B.
<PTBA>
2012
Quotas
2,661,297
2013
4.0%
Quotas
2,236,171
2012
<IUP> IUP
Quotas
777,918
213,927
0
0
291,719
194,479
291,719
470,845
194,479
194,479
0
991,845
816,814
291,719
583,438
0
952,949
388,959
350,063
0
680,678
388,959
291,719
233,375
291,719
0
0
0
8,891,802
67,250,000
3.0%
2013
1.2%
0.3%
0.0%
0.0%
0.4%
0.3%
0.4%
0.7%
0.3%
0.3%
0.0%
1.5%
1.2%
0.4%
0.9%
0.0%
1.4%
0.6%
0.5%
0.0%
1.0%
0.6%
0.4%
0.3%
0.4%
0.0%
0.0%
0.0%
13.2%
100.0%
Quotas
688,053
189,214
195,910
448,449
258,020
172,013
258,020
599,036
172,013
172,013
299,756
877,267
722,455
258,020
516,039
295,002
842,864
344,026
309,624
217,098
602,046
344,026
258,020
206,416
258,020
279,434
225,418
311,480
10,319,752
74,320,000
0.9%
0.3%
0.3%
0.6%
0.3%
0.2%
0.3%
0.8%
0.2%
0.2%
0.4%
1.2%
1.0%
0.3%
0.7%
0.4%
1.1%
0.5%
0.4%
0.3%
0.8%
0.5%
0.3%
0.3%
0.3%
0.4%
0.3%
0.4%
13.9%
100.0%
As a direction ahead rising DMO (Domestic Market Obligation) is likely. Given vigorous foreign investments
in Indonesia, construction of electricity-consuming facilities, notably manufacturing plants, is under way here and
there. As a result, the country is chronically short of electricity and, therefore, to strengthen DMO-related
measures, designed to solve the power shortage, still remains as a national priority in the days to come. Also,
from the perspectives of resource nationalism, to promote the domestic use of mineral products is popularly
supported by the Indonesian citizens, which can be cited as another factor to boost DMO rises.
. Coal Price-setting by the National Government (HBA & HPB)
The new Mining Act 2009 puts the coal selling price under a government control mechanism. Under the Act,
benchmark selling prices, set by coal rank (by brand) every month, are open to the public. Based on the prices
45
the government imposes mineral products taxes on individual mines. The benchmark selling prices are
calculated based on the four indices below:
Indonesian Coal Index
Platts
Newcastle Export Index
Newcastle Global Coal Index
The benchmark selling price for coal is popularly known as HBA (which stands for Hrga Batubara Acuan in
Indonesian language), which is set in reference to 8 coal brands. Then, taking the 8 brands as the standards, the
price for 60 brands is set, which is called HPB (Harga Potokan Batubara) and posted monthly together with HPB.
The prices are in US$ and in FOB/Vessel terms.
In other words, they are the prices after loaded onto vessels
46
Tab.1-13 shows HBA and HPB prices in September 2014. It is noted from the table that the prices are set
based on calorific value (kcal/kg), total moisture (TM%), total sulfur (TS%) and ash content (Ash%). 18 in
the table are major 8 brands (HBA). The highest-priced coal is Gunung Bayan, a brand from Gunung Bayan
Pratama Coal Mine, which features a calorific value of 7,000 kcal/kg and traded for 74.69US/t. On the other
hand, the cheapest-priced is a brand called LIM3000 with a calorific value of 2,995 kcal/kg and traded for
17.22US/t. Whats noteworthy in recent years is that there have been apparent moves to tag even such
low-calorie coals as under 3,000 kcal/kg, like LIM3000, previously not subject to pricing and barely traded for a
higher price than mining cost + a 25 margin.
47
Tab.1-13
69.69
FOB Vessel
MEREK DAGANG/BRAND
HPB
MARKER
CV
TM
TS
Ash
(kcal/kgGAR)
(%)
(%, r)
(%,ar)
(US$/ton)
Gunung Bayan I
7,000
10.00
1.00
15.00
74.69
Prima Coal
6,700
12.00
0.60
5.00
75.45
Pinang 6150
6,200
14.50
0.60
5.50
68.12
Indominco IM_East
5,700
17.50
1.63
4.80
57.11
Melawan Coal
5,400
22.50
0.40
5.00
55.74
Envirocoal
5,000
26.00
0.10
1.20
52.65
Jorong J-1
4,400
32.00
0.25
4.15
42.39
Ecocoal
4,200
35.00
0.18
3.90
38.82
MEREK DAGANG/BRAND
9 Gunung Bayan II
HPB
MARKER
CV
TM
TS
Ash
(kcal/kgGAR)
(%)
(%, r)
(%,ar)
(US$/ton)
7,000
12.00
2.00
10.00
71.01
6,600
11.00
0.50
10.00
73.58
11 Trubaindo HCV_HS
6,553
12.00
1.69
4.21
69.85
6,500
10.00
3.28
9.38
62.42
13 Trubaindo HCV_LS
6,423
11.50
0.71
4.76
72.57
5,313
23.00
0.24
4.00
55.66
6,300
14.00
0.60
5.50
69.52
16 ArutminSatui 10
6,300
11.00
1.00
10.00
68.38
17 ArutminSenakin
6,250
11.00
1.00
12.00
67.05
18 Arutmin A6250
6,250
10.00
1.20
12.00
67.00
19 Mandiri A
6,210
10.00
0.70
4.65
71.51
20 Wahana Coal
6,200
12.00
0.90
10.00
66.97
6,200
10.00
4.00
12.00
55.26
22 IndomincoIM_West / 6500
6,171
15.50
0.76
5.22
66.55
48
KUALITAS TYPICAL
NO
MEREK DAGANG/BRAND
HPB
MARKER
CV
TM
TS
Ash
(kcal/kgGAR)
(%)
(%, r)
(%,ar)
(US$/ton)
23 TAJ Coal
6,200
10.00
1.00
14.00
66.46
24 Mandiri B
6,148
10.00
1.26
4.70
68.58
25 Trubaindo MCV_LS
6,143
14.00
0.76
5.20
67.38
26 SKB Coal
6,130
9.00
2.20
17.00
60.44
27 Baramarta Coal
6,112
9.50
0.95
13.00
66.48
28 Arutmin A6100
6,100
11.50
1.00
12.50
64.88
29 Insani Coal
6,050
19.00
0.15
3.20
66.06
30 BCS Coal
5,915
15.10
0.56
9.40
63.37
31 IndomincoIM_West / 6350
6,029
15.50
0.71
5.22
65.31
32 Bangun Coal
6,072
10.02
2.20
14.91
59.90
33 Pinang 6000
6,000
16.00
0.60
5.00
65.19
34 Indominco IMM_MCVHS
5,970
15.50
1.65
5.05
61.02
5,950
16.00
1.00
7.00
62.29
5,900
16.00
2.00
7.00
57.78
37 Pinang 5900
5,900
19.00
0.90
4.50
61.06
38 Arutmin A5900
5,900
12.00
0.90
13.00
62.61
5,765
16.00
3.20
7.00
51.62
40 KCM Coal
5,730
10.50
0.90
20.50
58.85
41 TSA Coal
5,700
18.00
2.00
8.00
54.00
42 Tanito Coal
5,700
17.50
1.00
8.50
58.15
43 Mahakam Coal
5,700
17.50
1.00
8.50
58.15
5,700
18.00
1.75
4.70
56.32
45 Pinang 5700
5,700
19.00
0.50
5.00
60.52
46 IBP 5500
5,500
20.00
1.00
7.00
55.12
47 Arutmin A5700
5,700
11.00
0.80
14.00
61.18
48 BSS Coal
5,520
10.00
0.45
15.50
60.73
49 LannaHarita Coal
5,500
22.00
1.00
6.00
54.20
50 Pinang 5500
5,500
21.00
0.40
5.50
57.46
5,500
20.00
1.30
4.70
54.84
52 Mahoni
5,500
20.00
0.80
4.70
56.84
53 Mahakam Coal B
5,400
23.00
1.50
8.00
49.82
54 Mahoni B
5,300
22.50
0.80
4.60
53.38
55 Kideco Coal
5,125
24.50
0.10
2.00
54.36
56 Agathis
5,100
25.00
0.82
4.50
49.95
57 LannaHarita Coal
5,000
27.00
1.20
6.00
45.73
58 IBP 5000
5,000
25.00
1.00
7.00
47.33
5,000
26.00
1.30
4.50
46.53
60 Sungkai
5,000
26.00
0.90
4.50
48.13
5,000
26.00
1.70
4.50
44.93
62 Arutmin A5000
5,000
22.40
0.54
8.90
49.97
49
KUALITAS TYPICAL
NO
MEREK DAGANG/BRAND
HPB
MARKER
CV
TM
TS
Ash
(kcal/kgGAR)
(%)
(%, r)
(%,ar)
(US$/ton)
4,350
33.00
0.40
4.00
40.92
64 IBP 4600
4,600
28.00
0.50
7.00
44.08
4,400
35.00
0.50
4.96
39.48
66 IBP 4400
4,400
30.00
0.50
7.00
41.30
67 IBP 4200
4,200
32.00
0.50
6.00
38.26
68 PIC Coal
4,200
33.00
1.75
6.00
32.74
69 Borneo BIB
3,800
41.00
0.40
5.00
26.05
3,800
40.00
0.15
5.23
26.52
71 PKN 3500
3,520
43.40
0.15
3.40
23.10
72 LIM 3010
3,010
47.50
0.60
5.30
18.25
73 LIM 3000
2,995
50.10
0.60
5.30
17.22
50
Fig,1-22 illustrates changing prices for HBA 8 brands in the last 4 years.
early 2011, has been on the decline to date and now stands at around 60% of the peak.
Fig,1-22
Source: Study Team on the basis of the data that was excerpted from the HP of MEMR
. Export Restrictions
Surfacing now are moves to restrict mineral resource exports. Namely, in an attempt to urge producers of
mineral resources to put added values on their products, there are the moves to ban exports of minerals in
unprocessed/unfinished-product forms and/or to impose export duties on specified minerals. However, as far as
coals are concerned, DMO and the benchmark coal prices are counted as part of export restrictions in narrow
terms and, unlike other minerals, coals have been not imposed to date any specific regulations to enforce the
added-value requirement.
51
mineral resource producers, to whom processing becomes mandatory in order to increase added values of minerals,
wont be able to export raw mineral resources from January 2014 and on. However, coals are not among the
minerals specified for the export bans. The mineral resources to which the decree is applicable are metallic
minerals, non-metallic minerals and ores.
Export Duties on Coals
Coal export duties, though under consideration in the past, were not realized due to objections raised by mines
and their related organizations. The failed effort was introduced in October 2005 by the-then Finance Minister
Anwar by issuing 2005 Financial Rules No.95. The Indonesian Association of Coal Producers, among others
presented the case to the court and, ultimately, given a judgment by the Supreme Court, the coal export duties
were formally abolished on June 13, 2006.Since then, in regard to imposition of coal export duties, the Indonesian
government has not mapped out any clear-cut policy.
Because the royalty on coal, set at 13.5%, is higher than other mineral resources, many coal companies
have a recognition that they have already been heavily taxed.
The contract of CCoW mines contains a provision that, after concluded, their contract wont be
influenced by any new taxation subsequently introduced. As a result, only IUP mines would be subject to
new taxation, if introduced under current system, thus producing a sense of inequality among coal
producers. Also, if the government dared to impose export duties on CCoW mines too, fierce resistance
from CCoW companies should be unavoidable and the international confidence should be lost either.
Besides, it is pointed out, from the aspect of international competitiveness of coal exports, that export duties
contain serious negative factors. Coal-exporting countries like Australia are expected to continue the promotion of
their cross-border shipments, and growing coal exports from the U.S., Canada and Columbia are likely too.
Accordingly, if the Indonesian government introduced the export duties and the mines, as part of their cost, put
them on their export prices, international competitiveness of the Indonesian coals should be undermined much.
Then, dire outcomes, typically mine closures and job losses, could easily be imagined. Thus, the Indonesian
government has no choice but to be cautious toward the export duties.
. Revised Foreign Investment Ratios on Mines
Foreign firms to develop CCoW mines are required, under an Indonesian statue, to transfer 10 years after the
mine was developed 51% of the mining companys shares to their Indonesian partners. Some of the CCoW
mines subject to the provision, such as Adaro Mine, KPC Mine, Arutomin Mine and Kideco Jaya Agung Mine,
have already completed their stock assignments to domestic firms.
52
Under the new Mining Act, foreign firms whose mines start production under the newly-enacted mining act are
required to transfer to Indonesian domestic firms 20% of their companies shares six years after the
commencement of their commercial production, with the ratios to be raised to 30% in the 7th year, 37% in the 8th
year, 44% in the 9th year and 51% in the 10th year. The priority parties to which capital is to be transferred are
the national government, local governments, state-run corporations, local governments related corporations and
general domestic firms in this order.
. A Law on Low-rank Coal Users Incentives Incl. Coal-fired Power Plant at Mines
In its efforts to prompt the use of domestically produced low-rank coals, and on the belief that coal-fired power
plants, if built at mines, could increase added values of coals, the Indonesian government enacted a law on
incentive coal supplies in such cases. According to it, under the 2011 Statute No. 1348 promulgated by the
General Bureau of Minerals and Coals, with a calorific value of 3,000 kcal/kg drawn as the boundary, coal prices
at mines are decided as described below:
Coals over 3,000 kcal/kg;
To be set pursuant to the coal benchmark price (HPB). (However, because the benchmark price is in
FOB/Vessel terms, the price at mine must be adjusted by subtracting the costs of transportation, loading and
transshipment on the open sea from the benchmark price.)
Coals under 3,000 kcal/kg;
Mining cost + margin (25% of the mining cost)
In other words, a power plant at mine can take coals for a price pursuant to the coal benchmark price if the
calorific value is over 3,000 kcal/kg, or a price equivalent to the mining cost plus a 25% margin in case of coals
under 3,000 kcal/kg. The cost, which covers overburden cost, mining cost, transport cost, crushing cost, land
cost, reclamation cost, maintenance cost and taxes, among others, is determined by the Ministry of Energy and
Mineral Resources and subject to the ministrys reviews from time to time.
Coal prices at mine changed drastically on the date of September 22, 2014, of which details are shown in
53
Tab.1-14.
Changing points: The new pricing system for low-rank coals (raw coals) destined to IPP business, coal
reforming business, coal gasification business and in-plant power generation, all in operation at mine, were
renewed on September 22 this year, with their data shown in the table below. Particularly notable is the
calorific-value restriction of over 3,000 kcal/kg and bindings below are lifted.
54
US$2.41/BCM
US$1.71/BCM/km
3) mining cost
US$1.7/ ton
4) transport cost
$0.28//km
6) process cost
US$1.98/ ton
7) depreciation cost
US$1.17/ ton
8) reclamation cost
US$0.27/ ton
9) security cost
US$0.07/ ton
US$0.21/ ton
US$1.99/ ton
US$2.07/ ton
US$0.11/ton
14) tax
20.30%
15) margin
25%
The above-mentioned rates are set based on the best practice (in terms of, not average values, but the best
performance among major shippers and others) in Indonesia and subject to reviews from time to time in reflection
to changing economic environment and so on. Meanwhile, this formula is applicable only to the newly
commissioned projects from September 22 and on, and the raw coal prices for existing projects are determined
based on conventional formula.On the other, in regard to mineral products tariffs, taxable target-range/conditions
(ex. corporate tax, VAT), land lease and bidding system (for land use for mining operations) in nationally
preserved regions, relevant government offices have been preparing necessary procedures, which are now at the
final stage with their outcomes imminent.
For the Ministry of Energy and Mineral Resources, the promotion of low-rank coal reforming business is
among its priorities to be solved at the earliest possible opportunity, and the ministry intends to continue relevant
information exchanges. The table above, to be posted as a coal pricing guideline, shows that individual mines
wont suffer nothing by comparison even when calculating their mining cost with this formula.Newly inaugurated
President Joko Widodo (popularly known as Jokowi) cut oil subsidy from 8,500 INR to 6,500 INR/liter from
November 18, 2014 and on. Because the subsidy cut is very likely to cause soaring oil product prices ahead,
among the cost items listed above, those involving oil product consumption are expected to go up too.
55
supplying fuels to energy-thirsty Asian power plants region-wide, and the other is major coal mining companies
are increasing their production in hopes to secure profits to cover falling coal prices worldwide. As a result,
albeit the will of the national government, Indonesia has become the top coal-exporting country in the world.
So far the Ministry of Energy and Mineral Resources projected total output in FY2014 at 421 million tons (flat
at the previous years level) on the assumption that a host of export restrictions could produce some effects.
Actually, however, FY2014 is likely to end in massive production increases by mining companies.
HBA for Indonesian coals with a calorific value of 6,322 GAR turned to be US$72.45 in July this year, down
US$1.19 from the HBA price in June. To cover the price down, the top six mining companies planned to boost
their production by 11.7%, which resulted in output increases. In June this year, the Indonesian Association of
Coal Producers warned that, if HBA continued to hover under US$73/ton, a large number of mining companies
should be forced to close their mines. The Association also insisted that, as a measure to cope with such a
situation, the government should offer mineral products tax revenues as the benefits to closed-mine employees.
Examinations of foreign coal markets around the world unveil that prices are on the decline. New Castle coal
benchmark price dropped some 20% from the years beginning to about US$69.90/ton now. The price is the
lowest in the last nearly five years. Obviously cheap crude oil worldwide can be cited as a major cause, and an
exit of the tumbling coal price trend is not seen yet.
56
57
coal
mine
Fig,1-23
truck
Truck
barges
liver
port
barges
open
sea
vessels
to
abroad
coal
terminal
vessels
to
abroad
barges
to
domestic
Indonesian mines are often situated in mountainous areas. Because large trucks are banned to drive on public
roads in Indonesia due to ill-installed traffic conditions, river-based transportation is forming the mainstream.
As for Fig. 8,trucking from a coal mine to a barge is required to use an exclusive road for coal transport, where
driving are large trucks generally capable of loading as much as 30 tons of coals.
Fig,1-24
After hauled by truck to a river port, coals are kept at a stockyard of the port, then forwarded to a barge by such
means as a belt conveyor for loading. In general a barge means an iron box of 300 feet X 100 feet in size which
is capable of housing some 8,000 tons of coals. With that type of barge coals are transported via river to the
open sea. Barge information is provided in Tab.1-15, which specifically offers general descriptions of two barge
specialist companies in Kalimantan.
58
RUSIANTO
AGUS STALINE
Quantity
No. of barges Tugboats
in service
Boat
Barges
Tug
Horsepower
specifications Gross tonnage
Maintenance cost
Rp/year
Maximum draft
35
147296
Rp
Fuel cost
Construction cost
Maintenance cost
Rp/year
7~10 bil.
Approx. 1.5 bil. Around 10% of
construction cost
INR
112171
Max. 3083
l/h
Construction cost
1,0002,000
DWT
m
Remarks
35 Captive (with 12 boats
for chartering)
GT
m
Quantity
HP
Barge
Loadage
specificaitions Total length width
depth
Remarks
5
15 bil. 300Ft-barge
(Singapore-made)
No maintenance for 5
years after
commissioned.
Fig,1-25
(Left: Coals loading onto a barge by belt conveyor; Right: An overall view of a barge tugged by a tug boat;
Bottom: An overall view of a barge and a tug boat)
59
Coals loaded onto a barge are transported to a river mouth, then bound for consuming-areas. When exported
to far distant outlets, there are two ways; transshipped from a barge to a vessel offshore or directly loaded to a
vessel at a coal terminal. As mentioned before, transportation by barge is possible to around Thailand.
Fig,1-26 is a satellite imagery showing coals, stored at a river-mouth stockyard, are forwarded by a conveyor belt,
thus loaded onto a vessel near the river mouth. It is the way of direct loading from an inland coal terminal to a
vessel.
Fig,1-26
As shown in
60
Tab.1-13 presented before, the government publishes coal selling prices in FOB/vessel terms offshore but does not
unveil incurring costs, such as truck-based primary transportation costs and barge-based secondary transportation
costs. Based on the results of its hearing surveys made to coal mines so far, we calculated these costs. Though
the mines, or the information sources, should be left unnamed, transportation costs are found as shown in
Tab.1-16.
transportation means
30-ton truck
0.15
tkm
belt conveyor
3.30
8,000 Tonbaji
0.05
tkm
2.00
By now, President Jokowi showed a will to carry out port, railway and electricity-related infrastructure projects
nationwide and, particularly, hammered out a policy to slash distribution costs by concentrating its efforts on
marine distribution infrastructure projects because Indonesia is an archipelago country consisting of 18,000-less
islands. In addition, announced was introduction of such mass transportation systems as subways into the six
cities, which include Jakarta, Semarang, Bandung, Surabaya (Bali), Medan (Sumatra) and Makassar (Sulawesi).
In regard to expropriation of land, which posed a bottleneck of investment, the President showed an attitude to
break a stalemate, if any, through the Presidents positive involvement by himself, while referring to his successful
1
The News Week, a US weekly, carried an article entitled A Disease of the post-China Indonesian Economy, which was
summarized below.:
With its growth halted by the Asian currency crisis in 1997, the Indonesian economy has been depending on subsidies, of which
costs have been just swelling to date. The growth rate in the first quarter of this year turned to be 5.2%, a four-year low. The ratio
of fiscal deficits to GDP is nearing 3%. Above all, fuel subsidies account for nearly 16% of government spending today. The
generous subsidies squeeze government budgets, leaving little room for funding infrastructure projects. While international
organizations urge the country to increase infrastructure investments by raising fuel prices, over 100-million Indonesians (out of its
total population of 250 million) are living for less than US$2 a day. Already in the past, fuel price increases in an attempt to curb
subsidies have invoked protest demonstration and social unrests, which triggered the toppling of long-standing dictatorship
governments. Drastic reforms can prove fatal. (Source) News Week, dated August 12, 2014
61
experience of loop-highway construction during his days as the Governor of Jakarta Province by overcoming
land-expropriation troubles by repeating dialogues with opposing residents. In specific terms, revealed are the
measures to install infrastructure and improve investment environment, such as one-stop service center where all
procedures required for foreign investment can be taken and the rule that basic business permits should be judged
within three days.
In November 2014, firmly taking a swift step to ax the so-far generous fuel subsidies, among others, the
President set to move toward infrastructure construction and improved investment climate, which can be cited as
Indonesias long-standing challenges. Besides, to dissolve account-balance deficits in structural terms requires
efforts to bring up an exports-oriented manufacturing industry of labor intensive type.
On the other hand, as for the financial market, banks tight liquidity and resultantly rising interests, as well as
the accumulation of domestic financial assets are worried as serious subjects to be solved. Among others,
mal-distributed economic activities pose a serious bottleneck on supply side. That is, the countrys production,
employment and consumption concentrates on Java, particularly its western area (in and around Jakarta) which
covers a mere 7% of the nations lands. From investors perspectives, Java can be counted as forming an
efficient market, but to expand industry and jobs throughout Indonesia, characterized by vast lands, is an
ambitious challenge in political terms too.
b) Exchange Risks
Around 2000 Indonesia suffered political and social unrests and, as a result, the Rupiah exchange market was
infected with a roller-coaster volatility. However, from 2004 onward, when the Yudohoyono administration was
inaugurated, the Rupiah market has turned stable, backed by stabilized social conditions and restored confidence
among investors.
In 2009 the Rupiah plunged briefly due to the Lehman shock but restored to the pre-shock
level by yearend. Thus, the Rupiah exchange market remained stable during the last decade except a brief
moment immediately after the Lehman shock. This is attributable to a few factors. First, unlike the Asian
countries based on an exports-reliant growth model, Indonesia takes a local demand-led model. Second, political
and economic conditions have been stabilized under the Yudohoyono administration. Third, the current-account
surpluses increased thanks to growing exports, notably coal and palm oil.
Although the Rupiah, very volatile against the dollar and the yen, seems to be highly risk-ridden, Indonesia
depends nearly 70% of its GDP on domestic demand, thus being less vulnerable than other ASEAN members to
economic volatility in the West. However, an examination of Indonesias cross-border imports/exports reveals
that the value of IDR against the dollar plunged by 34% in the last four years. Though export terms in dollars
are turning favorable, some firms indebted in dollars are suffering so big exchange losses that should carefully be
watched.
Meanwhile, as late as December 2014, IDR marked a 16-year low, an about 11% drop from this years highest
recorded in April, and the Japan-affiliated manufacturers reliant on imported feedstock are now forced to have
some measures to tackle their cost increases. Because it results from the strong dollar worldwide, local
62
economists, while asserting the rate can fall to the 13,000~15,000 IDR, take an optimistic view that the US
economic recovery should have positive effects on the Indonesian export industries.
c) Natural Disasters
Because Indonesia, just like Japan, is situated on the Pacific-Rim volcanic belt, the country is natural
disasters-prone, such as earthquakes, tsunamis, volcanic eruptions and floods. According to a JAIC report, just
in the ten years from 1999 through 2008, natural disasters killed some 180,000 citizens, with an additional about
8.4-million suffered, and caused economic damages as serious as amounting to US$10 billion. Indonesia is an
earthquake-stricken country hit by earthquakes of over the magnitude 4 class as frequently as 400 times a year on
average. Furthermore, Indonesia has 129 active volcanos. Of them, including Mt. Merapi (in central Java), 17
volcanos are showing rumbles. Also the country is hit by frequent tsunamis resulting from earthquakes and
volcanic eruptions. Big earthquakes of the magnitude 7~8 class occur as frequent as once a year, with the latest
one, scaled at magnitude 8.6, braking out in April 2012 offshore North Sumatra. The area hit by the latest big
quake is the same as the one devastated by the Great Quake Offshore Sumatra in 2004 of which victims numbered
as many as some 300,000 including the missing.
In the meantime, some areas of Indonesia belong to the Asian monsoon belt, where heavy raining during rainy
seasons often causes floods and submersion-linked damages every year.
January 2013 escalated into as serious state as causing the plural number of municipal authorities, including the
Metropolitan Jakarta, to proclaim a state of emergency.
(Source) JICA, Introduction to Japans Economic Cooperation to Indonesia in Various Fields (Field of Disaster
Prevention)2
d) Policy Changes
In the past Indonesia has propelled its economy with oil exports and oil-related industries as the prime mover.
Then, in more recent years, the country has been bolstering its economic growth by developing manufacturing
and service sectors. The Indonesian government has mapped out a host of aggressive industry-development
policies, including plans for manufacturing clusters, which involve electrical machinery, auto parts, textiles,
agricultural/fishery processed products, etc., to be installed in such areas as Java, North Sumatra and Sulawesi.
Key economic measures of the former President Yudohoyono were the decisive promotion of free trade and the
invitation of foreign firms.
For instance, his administration entered into the EPA (Economic Partnership
Agreement) with Japan and realized the conclusion of China ASEAN FTA (Free Trade Agreement) with China.
Likewise, concerning AFTA (ASEAN free trade area), proposed tariff cuts within the area were achieved as
scheduled. Given the improved climate for corporate management, a growing number of Japan-affiliated firms
have been launching into Indonesia to set up production centers or expand their basis there.
The advent of Mr. Jokowi, installed as the new President in October 2014, was a breakthrough event in the
Indonesian politics, still overshadowed by the long-standing elitism. It was a grass-root movement involving
more than a million volunteers in total that supported his presidential campaign. Yet, because the Indonesian
2
Source: JICA, Introduction to Japans Economic Cooperation to Indonesia in Various Fields (Field of Disaster Prevention)
63
Democratic Party of Struggle (PDI-P), where he started his political career, occupies only 20%-short at parliament,
the President is likely to face rough going in his parliament management and there is no knowing what will come
for his fiscal reforms. At any rate, in order to establish a redistribution system, a crucial challenge for Indonesia,
it is essential that Jokowi proves to be a competent President. Aside from a high pile of subjects, ranging from
repulsions of the vested-interests class against the President-led reforms to much-needed infrastructure projects,
typically roads and ports, there is no question that the new administration will cause a stir to the Indonesian
political culture.
Jemash Iskamiya, an Indonesia-based international terrorist group, is said to be tied with Al Qaida, the terrorist
group responsible for the September 11 terrorist attacks, which means the existence of threats of terrorism remains
unchanged today. In addition, in Indonesia, militant separatists in Ache and Papua, where they have been
demanding their independence from Indonesia for years, are feared to cause social unrests, such as riots and
terrorism, within the provinces. Thus, Indonesia is confronted with not merely a menace of international terrorist
groups but also a threat of domestic separatist terrorism.
As for riots, the Jakarta riot in 1998, which destroyed the Chinese town in Jakarta, was an incident which
reminded many of that the Indonesian economy was still controlled by the Chinese merchants. Indonesia has the
largest number of the Chinese residents in the world. Though discrimination within the government and in the
society has been blurring gradually, no doubt this kind of threats persist even now. And yet, given such
developments as a Chinese-language media, previously prohibited, came officially on stage, a Chinese-Indonesian
was elected as the Deputy Governor of Metropolitan Capital Jakarta, and Chinese-Indonesians were appointed as
the State Ministers, democratization has steadily got rooted.
Lately, due to skyrocketing crude oil prices in 2012 squeezed, fuel subsidies squeezed the government budgets,
and a 33% hike in the fuel price announced by the government provoked a violent demonstration joined by more
than 80,000 citizens. But, it had little influence on citizens life partly because not a few participants in the
protest march were paid-protestors for 500 Rupiah/day each,
Source : The Ministry of Foreign Affairs, Website on Overseas Security (Guide to Security for Japanese Residents, Jakarta Japan
Club)
64
[Strengths]
[Weaknesses]
economic shocks
economic shocks.
General election in
[Opportunities]
[Threats]
Central Bank.
asset-management investments.
discourage investors.
2014.
Continued Abenomics can strongly lead to capital inflows
into emerging countries.
65
Krakatau POSCO
Pertamina
Krakatau Steel
Asahimas Chemical
This area, where Krakatau Steel Co., the largest steelmaker in Southeast Asia, is located, forms Krakatau Steel
Industrial District. Aside from Krakatau Steel Co. and Krakatau POSCO Co., many plants run by such
companies as Siemens AG, Asahimas Chemical Co., Chandra Asri Petrochemical Co. and Pertamina (state-owned
oil/gas corporation run by the government of the Republic of Indonesia) are integrated in this area and, thus, the
66
zone of this area has been developed well as an industrial district.In addition, as an industrial infrastructure,
Suralaya power plant, Krakatau Tirta industrial water treatment plant, (Ferry Terminal to cross to Sumatra) Merak
port, there is a Sunda Strait Bridge (plan).
67
Chapter2
Study Methodology
Fig. 2- 1
ANYER Factory
Status-quo of existing capacities (power plants, substations, grids) and electricity market
Financial/economic analysis
2FS target
The spot subject to the FS work is the site of ANYER plant owned by Asahimas Chemical Co. (ASC) (Desa
Gunung Sugih Jl. Raya Anyer Km 122 Cilegon 42447 Banten).
70
Fig. 2- 2
71
2Research system
Fig. 2- 3
Research System
Director General
Jiro Uchida
Director
Seiji Tada
Research Department
(Research Advisor)
Hiromasa Iwasa
(Research Advisor)
Tadao Ishikawa
72
Chapter3
Justification, Objective and Technical Feasibility of the
Project
76
Based on the decision, from 2014 through 2015, the tariff increases are scheduled as follows;
Power Contract Category 14 (over 30KVA)/some 60 companies: up 65%
Power Contract Category 13 (over 20KVA)/listed companies:
up 39%
For ASC (falling in Category 13), the tariff hikes are worried to produce grave effects on its business
operations.
After Expanded
Caustic soda
500
700
VCM
400
800
PVC resin
300
550
Illustrated below is the flow of manufacturing by ASC. It should be noted that production of caustic soda and
chlorine alike are very much electricity-intensive.
77
Fig. 3- 1
Because the electrolytic equipment to produce caustic soda and chlorine, the latter being PVC feedstock, is
characterized by heavy weight held by electricity cost, the above-discussed recent condition (rising
electricity-price problem) is now reckoned as a crucial subject that can pose so serious impediments to the
companys business development that it should be solved quickly and effectively.
For these reasons, ASC plans to offer its captive site for the proposed project of coal-fired power construction in
hopes to receive from the power plant, after it is built, less expensive power supply than that from PLN (state-run
electric utility).
78
79
b) Electricity Act
The Indonesian electric utility industry has been long regulated by the former Electricity Act enacted in 1985.
But, amid the worldwide streams of electricity liberalization, a new Electricity Act was enacted in 2002, but it
was short-lived.
The Electricity Act of 2002, nullified by the Court of Constitution in 2004, could not function virtually, which
subsequently allowed the former Electricity Act to revive.
Later, in 2006, a newly-drafted electricity bill was freshly proposed to the parliament, which was passed in
September 2009 and enacted under the official title of the Law No.30 of 2009 on Electricity (New Electricity
Act), which has been effective to date.
(The New Electricity Act referred to hereinafter chiefly means the Electricity Act of 2009 currently
enforced.)
The particulars to date are summarized below:
IPP participation permitted (1992)
Given the worldwide currents of deregulation since the 1980s, combined with tightening power supply,
Indonesia has also committed to liberalization of public utility businesses. In 1992, with a Presidential Decree
on Private Capital-based Electric Utility Industry (No. 37) issued, participation by IPPs, including foreign capital,
was approved.
Reforms of the electric utility industry initiated (1998)
Later, severely hit by the Asian currency crisis in 1997, the Indonesian rupiah plunged sharply and PLN, traded
with IPPs on the US dollar basis, was squeezed by exchange losses where the supply cost outstripped the selling
price. Under such circumstances, the Indonesian government announced in 1998 its policy to reform the electric
utility sectors structure, and thus initiated revamping of the electric utility industry.
80
In September 2009, the Law No. 30 of 2009 on Electricity (or the newly-drafted New Electricity
81
Tab. 3- 2
Note) Shown in each column are translated Japanese title of the statue, title of the statue (original title in
Indonesian language), translated English title of the statue, URL of the statue (in Indonesian language)
in this order.
Tentang Ketenagalistrikan
http://prokum.esdm.go.id/pp/2012/PP%2014%202012.pdf
Peraturan Pemerintah No.42 Tahun 2012
Government Regulation 42 of 2012
http://prokum.esdm.go.id/pp/2012/PP%2042%202012.pdf
Peraturan Pemerintah No.62 Tahun 2012
Government Regulation 62 of 2012
http://prokum.esdm.go.id/pp/2012/PP%2062%202012.pdf
Peraturan Presiden RI No.4 Tahun 2010
Untuk Melakukan Percepatan Pembangunan Pembangkit Tenaga Listrik Yang Menggunakan Energi
Terbarukan, Batubara Dan Gas
Presidential Regulation No. 4 of 2010
(Persero) Untuk Melakukan Percepatan Pembangunan Pembangkit Tenaga Listrik Yang Mengunakan
Batubara.
4
5
http://energy-indonesia.co m/07basicinfo/0140319inturn.pdf
http://www.esdm.go.id/regulasi.html
82
Tentang Penugasan Kepada PT Perusahaan Listrik Negara (Persero) Untuk Melakukan Percepatan
Pembangunan Pembangkit Tenaga Listrik Yang Menggunakan Batubara
Peraturan Presiden RI No.47 Tahun 2011
Tahun 2006 Tentang Penugasan Kepada PT Perusahaan Listrik Negara (Persero) Untuk Melakukan
Percepatan Pembangunan Pembangkit Listrik Yang Menggunkan Batubara
(In English)
Presidential Regulation No. 71 of 2006 on Assignment to PT. State Electricity Company (Persero) Acceleration To
Perform The Development of Power Plant Using Coal.
Presidential Regulation No. 59 Year 2009 on Amendment to Presidential Regulation No. 71 Year 2006 on Assignment
to PT State Electricity Company (Persero) To Perform Accelerated Development of Power Plant That Uses Coal
Presidential Regulation 47 of 2011 on the Second Amendment to Presidential Regulation No. 71 Year 2006 on
Assignment To PT PLN (Persero) To Perform Accelerated Development of Coal Power Plants that use
URL
http://prokum.esdm.go.id/perpres/2006/perpres_71_2006.pdf
http://prokum.esdm.go.id/perpres/2009/Perpres%2059%20tahun%202009.pdf
http://prokum.esdm.go.id/perpres/2011/Perpres%2047%202011.pdf
Tahun 2010 Tentang Daftar Proyek-Proyek Percepatan Pembangunan Pembangkit Tenaga Listrik Yang
Menggunakan Energi terbarukan, Batubara, Dan Gas Serta Transmisi Terkait
Minister of Energy and Mineral Resources Regulation No.01 of 2012
Energy and Mineral Resources No. 15 of 2010 on List of Projects to Accelerate Development of Power Plant That Uses
Renewable Energy, Coal, and Gas Transmission And Related
http://prokum.esdm.go.id/permen/2012/Permen%20ESDM%2001%202012.pdf
Peraturan Menteri ESDM No.04 Tahun 2012
Dari Pembangkit Tenaga Listrik Yang Menggunakan Energi Terbarukan Skala Kecil Dan Menengah Atau
Kelebihan Tenaga Listrik
Minister of Energy and Mineral Resources Regulation No.04 of 2012 about the Power Purchase Price by PT PLN
(Persero) From Power Plants Using Renewable Energy Small and Medium Scale Or Excess Power
http://prokum.esdm.go.id/permen/2012/Permen%20ESDM%2004%202012.pdf
Peraturan Menteri ESDM No.22 Tahun 2012
(Persero) Untuk Melakukan Pembelian Tenaga Listrik Dari Pembangkit Listrik Tenaga Panas bumi Dan harga
Patokan Pembelian Listrik Oleh PT Perusahaan Listrik Negara (Persero) Dari Pembangkit Listrik Tenaga Panas
Bumi
83
Minister of Energy and Mineral Resources Regulation 22 of 2012 on Assignment to PT State Electricity Company
(Persero) To Perform Purchase of Electricity from Geothermal Power Plants And Electricity By reference price Purchase
PT PLN (Persero) From Geothermal Power Plant
http://prokum.esdm.go.id/permen/2012/Permen%20ESDM%2022%202012.pdf
Peraturan Menteri ESDM No.28 Tahun 2012
Mineral Nomor 01 Tahun 2006 Tentang Prosedur Pembelian Tenaga Listrik Dan Atau Sewa Menyewa Jaringan
Dalam Usaha Penyediaan Tenaga Listrik Untuk Kepentingan Umum
Peraturan Menteri ESDM No. 01 Tahun 2006
Minister of Energy and Mineral Resources No. 01 Year 2006 on Procedures Power Purchase Or Lease And
Networking In Business Electricity Supply For the Public Interest
Minister of Energy and Mineral Resources Regulation No. 01 In 2006
http://prokum.esdm.go.id/permen/2007/permen-esdm-04-2007.pdf
http://prokum.esdm.go.id/permen/2006/permen-esdm-01-2006.pdf
Scale Medium
http://prokum.esdm.go.id/permen/2006/permen-esdm-02-2006.pdf
Peraturan Menteri ESDM No. 0010 Tahun 2005
84
Electricity supply services for in-house use (Article 9-b): In-house power generation
In the part below, based on statute/literature studies as well as first-hand information gained by interview
surveys made to the MEMR and PLN, the regulations applicable to IPP and PPU (other than PLN) are
outlined.
85
Tab. 3- 3
Utility
type
IPP
Action
needed/
Legal system
Explanations
or not
Sell (to PLN)
Allowed
Not
Bidding system
Long-term contract
and 5 (2009).
an essential requirement.
86
Allowed/
Utility
Action
type
needed/
Legal system
Explanations
retailing to consumers.
or not
allowed
allowed today.
Backup
WU acquisition
Not
needed
services
offered
to
consumers.
IUPTL acquisition
Needed
PPU
Allowed
MEMR.
is
set
calculation
based
on
and
cost
B-to-B
negotiations.
On contract term under MERM
ordinance, which of a single-year
or a long-term is specified remains
unclear.
PLNs agreement is a necessary
condition.
Retail (to consumers)
Allowed
governments approval.
whole
acquisition.
output
to
PLN
once,
Allowed
87
Allowed/
Utility
Action
type
needed/
Legal system
Explanations
or not
regulated by MERM ordinance No. 31
(2014).
interconnection.
Needed
No. 28 (2012).
If well-negotiated unofficially
beforehand, the above can be
gained in two months at the
shortest.
IUPTL acquisition
Needed
power
producers
No. 4 (2012).
MEMRs approval).
In-house
Allowed
A-single-year contract
In-house use
Allowed
Backup
Allowed
interconnection.
(2014).
Not
needed
IUPTL acquisition
Not
needed
1 When interconnecting power resources to PLNs grid, at least a month is necessary for KKO (grid impact
study).
2 WU (Wilayah Usaha): business area
3 IUPTL(Ijin Usaha Penunjang Tenaga Listrik) a permit for electric utility services required under the New
Electricity Act
4 IPP: Independent Power Producer
5
6 MEMR is currently examining a power wheeling mechanism which is applied to IPP, PPU and in-house power
producers when they offer power wheeling/retail wheeling to consumers by using (lending) PLNs grids.
88
a) Summary
Major contents of electric-utility regulations which are unveiled during our interview surveys to Indonesias
competent offices are summarized in the table below.
Tab. 3- 4
Type
Operator
WU
Single-
Supply to consumers
Remarks
Not allowed.
Handed
IPP
to PLN.
Not required
SPC
Bidding
Long-term contract
SingleHanded
PPU
covered by acquired
to purchase whole
WU is allowed (supply
output, if possible).
to consumers in any
MEMRs ordinance
under preparation.
allowed).
Required
SPC
With generating
Surplus output can be
In-house
Counted as
power
identical to
producers
consumers
capacity leased by
Fixed price
Annual contract
allowed.
sold.
Not required
operator.
b) The Ministry of Energy and Mineral Resources (MEMR): General Bureau of Electricity
The interview was made, basically in reference to the two cases cited below, in hopes to learn chiefly their
possibilities from the legal regulatory aspect.
Inverse-current-to-PLN available case (with surplus output available at IPP, PPU & in-house power
producers)
Inverse-current-to-PLN unavailable case (with surplus output unavailable at IPP, PPU & in-house power
producers)
In-house power producers (falling under Article 9-b of the New Electricity Act) are required to obtain the
specified permit under the New Electricity Act.
90
remains unconfirmed).
PLN welcomes IPP. As for in-house power producers and PPU, PLN is taking a please-do-it (as-you-like)
stance.
When the owner of power resource is a third party, typically SPC, WU acquisition is necessary if its power
output is sold directly to a consumer (plant). On the other hand, when the owner of power resource is a third
party, notably SPC, and power is produced there by leasing the generation capacity to the consumer (plant),
the case is treated in the same manner as ordinary in-house power generation. That is, leasing system is fully
viable.
WU acquisition, extremely hard in the past, is becoming easier today.
cases included WU acquisitions in not-yet-electrified areas (outside PLN service areas) and WU acquisitions by PLNs
subsidiaries.)
Meanwhile, direct supply from IPP to a consumer (so-called specified district supply in Japan), allowed as
special cases in the past, is totally ruled out today.
Power wheeling now under consideration by the MEMR (so-called PPS in Japan = retail wheeling, and power
wheeling) seems hard to be realized in the short run because PLNs grids have little room for that due to limited
reserve capacity.
Definitions of IPP, which should be detailed by some literature, chiefly include its output sold 100%
long-term power purchase agreement, and PLN-led biddings.
PLNs long-term supply service plan puts that, particularly in the years to 2017, power-resources supply is
expected to remain in an extremely tight condition.
d) PLNMarketing Division
Power output sold from PPU to ASC is allowed conditional on WU acquisition. But, from the PLN perspective
(or as a view held by the officer in charge), the systems described below are preferable to PPU-to-ASC direct
retailing.
(It should be noted the above-mentioned view is nothing but a privately-conceived view of the officer in charge.
Ultimately, it seems that the matter is settled by further negotiations with PLN.)
A. The whole output to be sold once from PPU (SPC) to PLN.
The selling price is based on the cost method (A+B+C+D) and settled by B-to-B negotiations between the
parties.
Acapacity investment cost, BO&M fixed cost, Cfuel cost, DO&M variable cost
By the way, the benchmark price applicable to surplus output sold by an in-house power producer to PLN,
set at 656 Rp/kWh, is equivalent to B+C+D mentioned above. (Any price outstripping the benchmark
needs a MEMRs approval.)
91
Note by E&T: The power selling price from PPU (SPC) to PLN, which is calculated by adding the
above-mentioned A to the benchmark, seems to become higher than 656Rp/kWh by the same margin as
the amount of A.
AS for the case where output is sold from PPU to PLN, the MEMR is now preparing for mapping out
relevant regulations (perhaps in the form of MEMR ordinance). It appears Mr. Eric of the MEMR is
familiar with specifics of the preparatory works. As for the standard term of power purchase agreement,
a single-year basis is likely but the possibility of a longer term cannot be ruled out.
As a condition to enable power purchase agreement from PPU (SPC) to PLN, it is necessary that PLN is in
need of the output.
B. Power output sold from PLN to ASC
The benchmark tariff is 1,191 Rp/kWh (identical to the selling price to ordinary consumers).
The benchmark price above can be lowered by B-to-B negotiations.
It is fully possible for SPC to lease its generating capacity and the like to ASC and ASC, in the capacity of an
in-house power producer, operates the generating capacity to produce power for its own use. From the context
of the Electricity Act, this case is given the same treatments as those applied to in-house producers. Surplus
output, if any, can also be sold to PLN (for 656 Rp/kWh as the benchmark; a MEMR approval required when
outstripping the benchmark).
WU, which is required for PPU, can be obtained in two months if well-negotiated unofficially beforehand with
the competent offices, such as the MEMW, PLN and local government (ex. Cilegon City Government).
Without a prior negotiation, WU acquisition can become more time-consuming.
Backup services
In case power-receiving capacity is 150MW, the minimum charge turns to be 980 mil. /month.
Though not confirmed during the interview, when more power is received than covered by the minimum
charge (firm), it is thought that the extra portion over the minimum charge is charged with a meter-rate
system, that is, the extra power received (kWh) x 1,191 Rp/kWh.
The meter-rate-based specific tariff during backups (and any case outpacing the aforementioned amount as
well) is calculated in the same manner as explained above, including the unit cost.
B. Non-firm interconnection (interconnected-only-in-emergency case:
In this case, the so-called temporary service cost is charged for the backups offered. However, those
who want a temporary service must notify PLN a month beforehand.
Accordingly, this case, though helpful in preset periodical inspections, is useless in dealing with such
unforeseeable events as abrupt mechanical troubles.
92
The minimum charge applied to this case, which is equivalent to a-million-kWh in service with the unit
tariff set at 1,650 Rp/kWh, is calculated with the formula below:
1,650 Rp/kWh 0.8 (coefficient) 1 mil. kWh/time
1,320 mil. Rp/time
The above is the minimum. When more power than a million kWh is received during backups, a
meter-rate-based specific tariff is charged as follows:
Calculated below is an annual backup charge which is figured out on the assumption that a unit out of
300MW-generators (150MW x 2 units) would be put to a periodical inspection every 6 months, that is,
with a down time per unit amounting to 10 days/year 24 hours/day240 hours/year, backups required
for the two units would amount to 480 hours/year 150MW in total.
1,650 Rp/kWh 0.8(coefficient) 480 hours/year 150MW
95,000 mil. Rp/year
Compared with the annual minimum charge (980 mil. /year) calculated for the aforementioned Case A
(firm interconnection) where the power received amounted to 150 MW, the annual charge for this
temporary service (920 mil. /year) in Case B (non-firm interconnection) is found less expensive by about
60 million /year.
Others
Before having a new power resource interconnected with PLNs grid, it is required to undergo PLNs
assessment called KKO (an abbreviated Indonesian language which means an assessment to learn if or not
operable enough. Virtually it means a grid impact assessment).
When making a KKO, PLN employs a system simulator named Dispatcher (which probably is a software)
based on which a grid impact assessment is made. To complete a KKO requires a month at least.
When a third party, like SPC, offers distribution and retailing services to consumers in the capacity of PPU,
the both of IUPTL (standing for Ijin Usaha Penunjang Tenaga Listrik, or a permit for electric utility services
for public use required under the new Electricity Actand WU (business area).
e) Cilegon City: Mining Energy Division, Cooperative Bureau for Commerce & Industry
It appears fully possible for PPU (with WU and IUPTL as required) to offer supply services to the only one
consumer (on top of PLN) as its output taker.
From the Cilegon Citys perspective, PPU which contributes to PLNs grids in the form of inverse current is
much more preferable. Yet, regardless of PPU or in-house power producers, the City welcomes introduction
of generating capacities.
As for WU required for PPU, Cilegon City is ready to issue a recommendation in 3~4 days if all the documents
required are well prepared. The documents include a FS report on the PPUs power plant and a map (which
shows its location). These documents (FS report and map) are also required when applying for IO (Izin
Operasi: operation permit) of an in-house power producer (and PPUs IUPTL as well).
93
Fig. 3- 2 An Example of FS Report Required When Applying for WU, IUPTL & IO Permits/Recommendation
Note) FS Report on Indrama Petrochemicals in-house power plant (40MW) located in Cilegon City
A recommendation to be gained from Cilegon City (one of necessary conditions for WU acquisition)
The application forms and Cilegon Citys recommendation to be filed to the MEMRs General Bureau of
Electricity.
Meanwhile, as asserted by the PLN officer in charge of system planning, WU acquisition, which has been very
The retailing tariff from PPU (SPC) to consumers is settled in the flow described below (with neither
governments nor PLNs involvement at this stage).
Negotiations between SPC (PPU) and consumers
Consultation between SPC (PPU) and Cilegon CityAgreementOK
Cilegon City does not care at all even if this PPUs retailing tariff for its consumers is set much lower than
PLNs prevailing retail tariff for general consumers.
94
4) Demand Outlook
a) Indonesias electricity supply-demand outlook
As illustrated below, Indonesias electricity demand is likely to surge sharply from 189 TWh in 2013 to 386
TWh in 2002, up 8.4% a year on average.
Fig. 3- 3 Indonesias Electricity Demand Outlook (GWh)
ASCs maximum power load currently stays at around 185,000 kW, which is projected to increase to 275,000
kW after caustic-soda and other manufacturing capacities are expanded.
Electricity consumption outlook
ASCs electricity consumption currently amounts to 185MW8,200h/y1,517 GWh/year and is likely to jump
to 275MW8,200h/y2,255GWh/year after the manufacturing capacity expansion.
95
3) Procurement of fuel
In the following, I examine the coal mine where it can supply it to in a target project.
96
PTBA
Adaro Indonesia, PT
Allied Indo Coal, PT
Arutmin Indonesia, PT
Berau Coal, PT
Indominco Mandiri, PT
Kartim Prima Coal, PT
Kideco Jaya Agung, PT
Multi Harapan Utama, PT
Tanito Harum, PT
First generation
1
Antang Gunung Meratus,PT
Bahari Cakrawala Sebuku, PT
Borneo Indobara, PT
Jorong Barutama Greston, PT
Kartika Selabumi Mining, PT
Mandiri Intiperkasa, PT
Marunda Graha Mineral, PT
Riau Bara Harum, PT
Trubaindo Coal Mining, PT
Second
generation
2
Asmin Coalomdo Tuhup
Bangun Banua Persada Kalimantan, PT
Baramarta, PD
Bara Sentosa Lestari
Batu Alam Selaras PT
Baturona Admulya
Baramulti Suksessarana, PT
Dhama Puspita Mining
Firman Ketaun Perkasa. PT
Guning Bayan Prartama Coal PT
Insani Bara Perkasa, PT
Intitirta Perima Sakti, PT
Indexim Coalindo
Interex Sacra Raya, PT
Kadya Caraka Mulia, PT
Kalimantan Energi Lestari. PT
Lianggan Cemerlang, PT
Lana Harita Indonesia, PT
Mahakam Sumber Jaya, PT
Multi Tambang Jaya Utama. PT
Nusantara Temal coal, PT
Perkasa Inakerta, PT
Pesona Khatulistiwa Nusantara PT
Pendopo Energi Batubara PT
Sumber Kurnia Buana, PT
Santan Batubara PT
Senamas Energindo Mulia PT
Singulurus Pratama Coal PT
Tanjung Alam Jaya, PT
Teguh Sinar Abadi, PT
Wahana Baratama Mining, PT
Third generation
3
Constructer
Total
KPIUPother
KPIUP
IUP
Total
IUP
6
(1,000 ton)
2005
8,606
2006
9,292
2007
8,555
2008
10,099
2009
10,830
2010
11,919
2011
2012
12,389
13,728
26,686
169
16,757
9,197
5,752
32,000
18,217
2,060
2,100
34,368
51
16,234
10,533
10,302
35,301
18,900
1,074
2,710
36,037
85
15,394
11,811
11,455
38,754
20,541
1,080
2,690
38,482
72
15,735
13,052
10,797
36,288
21,900
1,872
2,557
40,590
0
19,298
14,336
12,396
38,154
24,692
1,528
3,239
42,199
47,667
46,779
20,426
17,383
14,252
39,951
29,049
1,832
3,513
22,832
19,444
14,765
40,452
31,395
1,311
2,469
27,379
20,999
12,031
39,217
34,649
1,174
3,284
112,938
129,473
137,847
140,755
154,233
168,605
180,335
185,512
1,029
3,000
3,475
1,200
1,082
829
570
5,000
75
3,495
496
3,092
1,110
1,165
1,367
917
4,284
310
3,382
871
2,676
601
1,854
1,452
726
3,555
378
3,531
1,219
2,419
207
1,995
1,446
466
4,544
548
1,982
1,182
3,132
2,451
932
1,265
5,183
745
1,104
1,118
903
263
2,979
1,341
2,218
5,545
1,404
1,509
2,754
1,426
287
3,074
963
1,551
7,021
3,201
636
3,650
1,280
42
2,424
670
716
7,539
16,185
16,001
15,427
16,205
16,675
16,216
19,989
20,158
1,286
138
2,256
276
3,723
346
4,335
216
254
3,252
1,740
605
2,527
2,521
911
3,689
54
280
2,857
942
4,433
4
39
525
311
4,142
1,007
494
4,053
2,249
1,265
3,458
4,222
2,496
3,776
4,421
27
675
0
0
23
3,459
772
0
442
139
4,300
350
5,156
88
4,532
178
167
600
196
434
127
158
335
66
112
239
13
93
121
85
46
5,752
2,304
1,685
2,926
1,480
2,936
208
930
523
1,302
3,058
90
2,264
1,144
1,977
5,303
641
1,446
2,685
712
1,298
1,341
1,526
1,018
1,587
1,466
1,465
1,654
209
772
1,397
4,537
357
920
2,012
56
440
1,305
1,249
18
478
1,028
1,021
2,887
18,346
16,463
18,267
20,810
27,101
147,469
161,937
171,541
177,770
9,518
25,310
36,834
165,593
196,539
216,930
1,021
122
228
255
2,239
7,983
449
1,118
3,129
1,300
6
908
1,725
2,861
9,250
1,748
811
1,290
4,234
1,706
785
927
3,627
33,377
44,913
45,436
198,009
218,198
245,237
251,106
52,363
45,615
45,052
95,645
121,065
240,232
254,454
275,169
353,271
385,899
720
1,992
49
1,095
958
1,092
2,574
718
2,226
1,217
5
502
2,400
Total output, put at 380 million tons in Tab.3- based on as old statistics as a year earlier, exceeded 420 million tons in FY2013 and
is projected to increase further in FY2014. According to Reuters prompt report, Indonesias coal output in the first half of FY2014
is projected at 213 million tons/6 months, up 6.8% over a year ago.
97
So two cases below are considered here in consideration of stable supply possibility in
In case coal specs have already been specified, it might be possible to unroll the next works of originally
selecting coal brands. But, this time, it is decided to research on-going situations of a nearby power plant
running on 5,000 kcal/kg-coals, with resultant information of coals in use stated in this report.
It is because of a judgment that research results can not only show the most stable way of securing coals but
also identify the cheapest coal brands for the planned power plant if built with similar specs.
Unit volume 7
14Unit400MW 5Unit600MW
5,000kcal/kg
Unit volume 1
8Unit600MW
4,200kcal/kg
98
Boiler model: Semi-critical-pressure natural-circulation boilers (Nos. 1~7: Canada, No. 8: China).
Environmental equipment: Electric dust collectors alone (without de-sulfurization, de-nitrification). Heat
reuse of 150-flue gas currently under consideration
PLN consumes 16 million tons/year (procured) of coals, out of which 11 million tons/year procured by
Indonesian Power. As its manner of procurement, the company is committing to open tender. The
successful tender price last time was CIF US$6566/t.
Indonesian Powers coal procurement contracts consist of long-term (10 years) and mid-term (3 years)
ones, with the prices settled anew every year. Coal brands covered by the long-term contracts include 4
million tons/year from the state-run mine PTBA, 2 million tons/year from private mines run by Berau, and
a million tons/year from private Adaro mines. The remaining 3~4 million tons/year are covered by the
three-year contracts.
Coal procurement sources are shown in Tab.3-. While coals with 5,000kcal/kg in calorific value are
currently in use, the Unit No. 8 plans to use low-rank coals in the days ahead. It is because shrinking
availability of high-rank coals is likely.
Tab.3-7 A List of Indonesia Powers Coal Procurement Sources
Coal mine
calorific value
t/year
(Kcal/Kg) GAR
PTBA
Ratio
5,000,000
5,000
41.92%
1,500,000
5,000
12.58%
1,000,000
4,900
8.38%
PT. Adaro
1,500,000
5,000
12.58%
PT. Cenko
480,000
5,000
4.02%
480,000
5,000
4.02%
480,000
5,000
4.02%
1,200,000
5,000
10.06%
288,000
5,000
2.41%
PT Pln Batubara
Spot
Total (annual quantity)
11,928,000
100.00%
Max 0.4% Most crucial due to plant location near residential area.
99
spec
<5.000 Kcal/kg
>
48
<
28 %
Ash
(as received)
<
5%
<
0.4
> 1.150 C
>
<
Medium
<
Medium
Content
%
%
Size
98 % 70 mmUnder
< 50mm
10 % 2.38 mmOver
< 2.38 mm
Use
Length
Draft
(m)
Facility
m
(m)
Jetty 1
160
11.5
Conveyor
22000t/hr
Jetty 2
General Vessel
330
14.5
Conveyor
23500t/hr
SPOJ 1
Coal Barge
160
Conveyor
11000t/hr
SPOJ 2
Coal Barge
Extraordin
Bulldozers, etc.
ary pier
Other information
New President Jokowi decides to perform power development 35,000MW within 5 years, and has
published the additional power plants using coal-fired main. (Coal-fired power was adopted because
of its outstanding economics and price competitiveness.)
Gov. (PLN)
15,000M
IPP
20,000M
Total
30,000M
Sulalaya power plant is not equipped with coal-blending units, and blending works are done by coal
suppliers.
New-brand combustibility tests are outsourced to a third-party testing firm (Interteck), while JT
Boyd is employed for making research on mines (reserve evaluation)
100
Of the coal suppliers from which Indonesia Power purchases coals, the top four consist of a state-run firm and
CCoW mines. The state-run mine, or PT. Bukit Asam (known as PTBA) is situated in the province of South
Sumatra, and its coals are hauled by rail from the province to the southernmost point of Sumatra, then forwarded
by vessel to end users at home and abroad. It is because PTBA is state-run why PLN is taking coals largely from
PTBA. PT. Adaro, located in South Kalimantan, is the largest mine in output terms.
located in North Kalimantan.
In selecting coals to fuel Anyer coal-fired power plant, the purchase sources of Sulalaya power plant provide
useful references. Particularly, as long as buying from major CCoW mines (PT. Adaro, PT. Berau Coal, Kideco
Jaya Agung) a supply disruption is unlikely. On top of PT mines, Fig.3- shows locations of PT. Aruthomin.
However, PT. Bukit Asam (PTBA), the state-run mine, is omitted. It is because PTBA, responsible for supplying
to domestic power plants, is thought to be harnessed by tight production-supply.
Fig.3-5
101
kmUS10.5/t
same as in Case 1. It is noted some of the major mines extracted in Case 1 are also selling low-rank coals.
However, in regard to prices, few are stated in HPB price terms, from which it is judged that traded amounts are
much limited than 5,000cal/kg-coals.
Just like the case of 5,000kcal/kg-coals, stable plant operation is assured if the main fuel is bought from major
mines and, therefore, it is recommended as a basic policy to choose coal brands from the mines located within
1,000km and run by such miners as Adaro and Arutmin, while inputting inexpensive spot coals bit by bit.
Few coal brands of 4,200kcal/kg in calorific value are currently supplied to the market. But, because
4,200kcal/kg-coals are the coals of which use is set to be backed by all-Indonesian supports, including the
Ministry of Energy and Mineral Resources, the likelihood is that an increasing number of brands will become
available, thus offering richer options.
All the coal-fired power plants of which development have been under way under the responsibility of PLN within the framework
of the First CRASH Program (PLNs captive power plant construction plan puts its total generated output at 10,000MW to be built by
2009, but the capacity completed under the plan remains at about 5,300MW as of 2014) are required to use low-rank coals of under
4,500 kcal/kg in calorific value.
8
No. 8 Unit at Sulalaya Power Plant, taken up in Chapter 3 (3) 5) Case Study Information of Sulalaya Power Plant, was also
installed under the above-mentioned plan. (Meanwhile, the No.8 Unit, a China-made generating capacity of sub-critical type, is
reportedly suffering frequent ill-functions.)
9
Extracted from JCOALs data on coal mines.
102
Tab.3-10
Fact sheet according to the coal mine brand according to the calorific value
Cost Us/t
Rank
Main
Coal Mine
Brand
HPB
Barge to
Plant
Total
Area
Validity of
(ha)
License
License Type
Calorific V
Calorific V
cal/g(GAR)
cal/g(AD)
T,Moisture %
I,Moisture %
Resources(Mt)
Total
Volatile
Total Sul. %
Ash %
Matter %
(ADB)
Temp.
52.65
57.65
35,800
16-Nov-32
CCoW
5100
5900
26
14.5
1.5
43
0.15
50
Arutmin Indonesia
Arutmin 5000
49.97
5.5
55.47
70,153
2-Nov-32
CCoW
4,750
5,300
18
11
35
0.2
45
1100
Berau Coal
Sungkai
48.13
10.5
58.63
118,400
26-Apr-33
PKP2B
5,000
5,500
26
18
5.5
38
0.9
47
1050
PT.Bukit Asam
BA59
55
0.5
55.5
66,080
2-Mar-31
Government
Cost Us/t
5900
28
13.1
40.4
0.6
Rota North
54.36
7.5
61.86
50,400
14-Sep-32
CCoW
4870
55
59
2,809
1-Jan-24
IUP
4800-5100
54.2
62.2
21,270
19-Feb-48
CCoW
5000
Value A
5600-6000
Indicated
Inferred
Proven
2455
E5000
Measured
Probable
Possible
Production (Mt/year)
(HGI)
Adaro Indnonesia
24.9
Reserves(Mt)
518
556
47.2
189
20
1291
476
21
7295
1377
13.5
720
1248
277
3.1
0.11
221
760
395
192
459
25
44.1
61.4
18.2
N/A
18.31
23.47
N/A
24-27
13
15-17
1-1.2
147.1
70.1
20-22
18
5-6
0.6-1.5
200.83
413.58
Cost Us/t
Rank
Coal Mine
Brand
HPB
Main
Area
(ha)
Barge to
Plant
Validity of
License
Resources(Mt)
License Type
Total
Calorific V
Calorific V
cal/g(GAR)
cal/g(AD)
T,Moisture %
I,Moisture %
Production (Mt/year)
Total
Volatile
Total Sul. %
Ash %
Matter %
(ADB)
Index
(HGI)
Adaro Indnonesia
E4000
30
35
35,800
16-Nov-32
CCoW
4000
4850
40
27
37
0.15
60
Arutmin Indonesia
ECOCOAL
26
31
70,153
2-Nov-32
CCoW
3,859
4,793
32
16
35
0.2
50
IPC53
32
0.5
32.5
66,080
2-Mar-31
Government
4115
5300
34
15
39
0.5
32
37
1,894
1-Jun-36
IUP
4313
5300-5400
30-35
14-18
1-3
42
0.06-0.15
30
2.8
32.8
4,395
23-May-48
IUP
4017
5413
36.6
14.56
6.58
35-38
18
5-6
37.4
15.1
5.7
Reserves(Mt)
Temp.
Measured
Indicated
Inferred
Proven
1675
1100
518
720
1248
277
7295
Probable
305
47.2
189
20
1733
13.5
60
44-45
0.42
55.2
16.7
200.83
413.58
32
39
Possible
3.6
64.4
41.4
Under Construction
18.31
23.47
N/A
13
32
Under Construction
Sub
Lanna Harita Inonesia
Value C
32
40
21,270
19-Feb-48
CCoW
4200
TIA5300
26
5.5
31.5
3,074
16-Mar-25
IUP
3960
5370
40
0.6-1.5
0.15
1160
35
CV(GAR)=(100-TotalMoisture)/(100-InharentMoisture)CV(ADB)
HPB = FOB/Vessel
103
Fig.3-6
Kalimantan
Bituminous coal
Sub-bituminous coal
Sumatra
Lignite
Java
104
105
Definitions/Remarks
Technology of super-critical (SC) type of which main vapor temperature exceed 566.
To be built in large capacity and not practical in small one.
Technology with vapor pressure of over 22.1MPa and main vapor temperature of over
Sub-Critical (Sub-C)
Large
power plants employ USC and SC featuring good thermal efficiency, while Sub-C is
popularly in use in small plants.
Source: The Ministry of Environment, On-going Commercialization and Development Efforts of the State-of-Art
Generating Technologies BAT Reference Table (As of April 2014)
(Reference 2) Actual Records & Plans of Coal-fired Power Plants of USC Type in Japan (Examples)
Tab. 3- 12 Actual Records & Plans of Japans Coal-fired Power Plants of USC Type (Examples)
Operator
TEPCO
Chubu
Plant
Unit No.
Stage
Commissioned in
Output
Unit No.5
Running
July 2004
600,000 kW
Unit No.6
Running
December 2013
600,000 kW
Unit No.3
Running
April 1993
700,000 kW
Unit No.4
Running
November 2001
a million kW
Unit No.5
Running
November 2002
a million kW
Running
April 2002
600,000 kW
Running
July 2009
Hirono
Electric
Hekinan
Power
New
Electric
Unit
No.1
Power
Isogo
Development Co.
New
Unit
562,000
No.2
New
kW
(provisional)
Unit
Takehara
Abuilding
600,000 kW
2021(planned)
600,000 kW
2027 (planned)
600,000 kW
650,000 kW
650,000 kW
No.1
Electric
Power
New
Development Co.
Unit
No.1
Planning
(Assessment)
Takasago
New
Unit
No.2
Hitachinaka
Hitachinaka
Generation
Planning
(Assessment)
Planning
(Assessment)
Planning
Kashima Power
Kashima
Unit No.2
(Assessment)
Note) All of USC units in Japan, those currently running and planned alike, are thought to be designed for using bituminous
coals.
106
(Reference 3)
Indonesias Introduction of Coal-fired Power Plants of USC Type and Coal Ranks in Use: Actual Records & Plans
Introduction records
So far no USC units have been introduced yet.
Introduction plans
Shown in the table below are the plans to introduce USC units, each designed to be a million kW in
single-unit-capacity terms.
Tab. 3- 13
Plant Name
Output
Location
Utility
Use
Type
On stream
Operator
Unit No.1:
BPI (Bisemana
around
2 mil.
Batan Province,
kW
Batan
2016
Subbituminous
yearend
coals (from
Indonesia);
joint
Due
to
residents
Power
Central Java(226
(1 mil.
Remarks
opposition,
venture
delays
are
by
likely
in
IPP
Unit No. 2:
Indonesian
invested
around
mines)
EPDC,
Adaro
Power
and
ha)
kW 2)
mid-2017
Itochu, Inc.
Under exam.
starting
plant
operation
An ODA
Fed to
1 mil.
Indramaju, West
March
(Indonesian
Indramaju
kW
Java Province
2019
PLNs
low-rank coals
project (yen
PLN
loan
grids
very likely)
provided)
In addition to those cited above, PLN now puts Jawa-1Jawa-4Jawa-5Jawa-6, shown below, under
consideration. While their details are not available, all of these under consideration are planned to be of USC
type of a million kW in a-single-unit-capacity terms. -
107
Fig. 3- 7
Source: I Made Ro Sakya (PLN), Current Status and Future Development of Coal Thermal Power Plant in
Indonesia (2013.9)
Fig. 3- 8
Source: I Made Ro Sakya (PLN), Current Status and Future Development of Coal Thermal Power Plant in
Indonesia (2013.9)
Original Source: JICA CCT Study, October 2012, with updated projects and schedule by PLN
108
(Reference 4)
Indonesias Introduction of Coal-fired Power Plants of SC Type and Coal Ranks in Use:
Actual Records & Plans
Introduction records
Tab. 3- 14
Utility
Plant Name
Output
Location
On stream
Coals in use
Operator
Remarks
type
Paiton Energy:
Paiton III
Indonesias first
Invested by TEPCO,
SC plant(made
(additional
815,000
installed
kW
Subbitumin
Paiton
March 2012
ous coals
by Mitsubishi
International Power
Heavy
capacity)
Heat value
Chirebon
5,000kcal/k
Cirebon
660,000
Chirebon
July 2012
kW
District,
IPP
Electric
Indonesias
Power: Invested by
second SC plant
Marubeni and others.
Cilacap
Java
(estimated)
Adipala,
Heat value
Fed into
5,500kcal/k
PLNs
grids
Export Corporation
660,000
Baru/Adipal
Central
2014 (slated)
China National
kW
a
Indonesias
third SC plant
Java
109
a) Appraisal bases/preconditions
With this FS works (on project formation and others), the appraisal bases/preconditions tabulated below are
preset, based on which the most optimal types of utility and technology as of now, to be identified while taking a
host of restraints into consideration, are proposed.
Appraisal Bases
How
helpful
Indonesias
power
in
Explanations
easing
supply
&
For Indonesian
For
public interest
AGC/ASC
higher contribution.
demand
SPCs benefits (profits, etc.)
of
Energy
of
outstanding
Infrastructure/Systems
of
Energy
technologies/know-hows owned
by Japanese firms
Symbol that describes the "importance" column of the table above is one in which the study team was given by
the basis of the following.
A. How helpful in easing Indonesias power supply & demand
Importance to Indonesia of public interest:
"Energy supply and demand relaxation type infrastructure system dissemination promotion Business", has been
one of the aims "to contribute to the relaxation of the world's energy supply and demand, to achieve a secure
stable supply of energy to our country."
110
And mitigation of power supply and demand in Indonesia is a very urgent issue for Indonesia suffering from
power shortages, that contribute to Indonesia of public interest, not waiting for the word.
Importance to AGC / ASC:
The Indonesian power supply and demand is easing, it leads to management stabilization and rising cost
suppression of Indonesia domestic relations companies and suppliers that do not have their own power plants,
thus leading to management stabilization of AGC / ASC.
B. SPCs benefits (profits, etc.)
Importance to Indonesia of public interest:
If SPC benefit (income, etc.) translates into higher yields, make the investments to improve the return and
profitability of Indonesian institutions, also contribute to the expansion of tax revenue and employment.
Importance to AGC / ASC:
If SPC benefit (income, etc.) translates into higher yields, the management of the power generation business
stabilized by PPU, to contribute to the stabilization of power long-term stable supply and electricity charges of.
111
As noted from the table above, the degree of importance judged from the perspectives of Indonesian public
interest naturally differs from the degree of importance determined from the perspectives of the host firms for the
proposed project (AGC/ASC).
With this FS works, the importance for Indonesia public interest is taken as a matter of vital significance. Yet,
given the current situations where the host firms for the planned project are hit seriously by Indonesias surging
electricity tariffs, it is believed that solving the power cost problem swiftly in efficient and effective manners can
also contribute to Japans industrial policy (= to strengthen international competitiveness of the Japanese
manufacturing industry and smoothen global evolution). Hence, by attaching a great importance to ASCs
benefits (particularly economics) as well, this FS works are designed to offer a well-balanced solution (in terms of
utility and technology types) from the all-embracing aspect.
b) Business model
Concerning business model for the proposed project, it was planned at the onset that, in the capacity of IPP,
output equivalent to 300,000kW out of a total of 600,000kW generated should be supplied to ASCs local plant,
with the remaining 300,000kW sold to PLN.
However, later, when an interview survey was made to the Ministry of Energy and Mineral Resources (MEMR),
it became evident that IPP was required to sell the whole output to PLN without exception, thereby there was no
choice but to scrap the IPP model.
Instead, the MEMRs information provided during the interview suggested a possibility to adopt a business
model featuring PPU (Private Power Utility), the third electric utility form (after PLN and IPP) endorsed under the
New Electricity Act.
PPU, a kind of electric power supplier falling in Article 9-a (power supply services for public use), is private
entrants into the public-use power supply sector served chiefly by PLN.
This PPU model, if employed, would enable ASC to receive power supply from a third party, including SPC,
which is engaged in retailing at one hand and, at the other, allows power producers, like SPC, to sell part or whole
of their generated output to PLN.
Also available is a buy-back system, which enables a power producer once selling the whole output to PLN to
buy back part of output from PLN. In case part of output is sold, the selling price applicable to the SPCPLN
trading is settled by B-to-B negotiations, while the selling price applicable to the SPCASC trading is also
settled by B-to-B negotiations, but, must be approved by the local government.
In the meantime, when a third party, like SPC, intends in the capacity of PPU to offer distribution and power
retailing services to a consumer (ASC), WU acquisition is required under Article 10 (3)~(5) of the New Electricity
Act.
(WU stands for Wilayah (area) and Usaha (business) = Business Area). If well-negotiated with the
MEMR, PLN and the local government (Cilegon City) unofficially beforehand, WU can be acquired in two
months at the shortest.
112
power consumer should be sustainable in the long run, typically over 30 years.
c) Technology
Originally USC/600,000kW was assumed as a recommended technology system. But, as a result of
aforementioned particulars, the use of Indonesian subbituminous coals was taken as an essential precondition and,
accordingly, the FS works were made by examining not merely USC (Ultra Super Critical) but also SC (Super
Critical), Sub-C (Sub-Critical) and CFB (Circulating Fluidized Bed) as technology candidates.
The model that was considered most promising is shown below.
Scale (generated output & retailing/power-selling capacities)
Generated output:
450,000/600,000 kW
113
SWOFF
SWOFF
SWON
Backup
150
300MW
275MW
SWON
SWON
SWOFF
SWON
275MW
450
600MW
ASC
Power Load
PPU
Normal Operation
ASC
Power Load
PPU
Technology types
USC (Ultra Super Critical), SC (Super Critical), Sub-C (Sub-Critical) and CFB (Circulating Fluidized Bed)
have such features as tabulated below.
Tab. 3- 16
Type
Bituminous coals
Subbituminous
in use
coals in use
Gross thermal
Japanese manufacturers
ranks
Bituminous
efficiency (HHV)
and
Japan: 900,000a
subbituminous coals
MHPS
(Mitsubishi
Heavy
Industries/Hitachi),
lower
Toshiba, IHI
(Ultra
Super
600,000 kW
700,000
800,000 kW
Critical)
kW:
42.5% 600,000
limit
of
kW: 42%
output.
MHPS(Mitsubishi
Bituminous
and
Heavy
subbituminous coals
Industries/Hitachi),
SC (Super Critical)
Japan:
Toshiba,
600,000 kW
IHI;
kW: 42.5%HHV
limit
of
overseas
makers
output.
(particularly Chinese)
114
500,000
Cost
Type
Bituminous coals
Subbituminous
in use
coals in use
Gross thermal
Japanese manufacturers
ranks
efficiency (HHV)
IHI is outstanding in
Sub-C (Sub-Critical)
Over 200,000 kW
is popular.
both
technology
and
subbituminous coals
cost.
acceptable
Popularly over
Japan:
200,000
Among others,
200,000kW
kW41%
overseas ones
Sumitomo
150,000kW,
CFB
(Circular
Fluidized Bed)
for
etc.
for
Industries is outstanding
IPPs;
15,000~70,000kW
Heavy
Same as left.
in-house
A wide range of
in
rank
With
acceptable
power producers
coals
technology
cost
terms.
included,
(Under study)
can
be
candidates
(Remarks)
In case USC is employed, the lower limit of output from a proven unit (currently in operation), if fueled by
Indonesian subbituminous coals, stands at around 800,000 kW (Note: Indonesias plans suppose a single-unit
capacity of a million kW alone). Accordingly, a USC unit of 600,000 kW planned for this project cannot be
a proven level but a demonstration stage.
In case of SC, a single-unit capacity of 600,000 kW is practical when fueled by Indonesian subbituminous
coals. However, cost competitions are likely with overseas manufacturers, notably Chinese makers.
In case of Sub-C and CFB, 400,000~600,000 kW is practical with Indonesian subbituminous coals in use.
With these features taken into consideration, combined with the aforementioned appraisal bases, the FS works
undertaken this time puts forth the technologies and their specifications that are considered most optimal from
overall aspects.
The technologies and their basic specifications, which are reckoned most promising, are stated below.
Case 1
Technology: SC (Super Critical)
In general, the main steam temperature of supercritical (SC) is 566 or less, and the main steam
temperature of ultra-supercritical (USC) over 566 . The main steam temperature of this plant is
566 , so by definition this is supercritical (SC), but it is close to ultra-supercritical (USC).
Output: 600,000 kW x a unit = a total of 600,000 kW
PPU (SPC) retails 300,000 kW to ASC, and sells the remaining 300,000 kW to PLN.
Because ASCs power load lasts 24 hours in principle and remains stable relatively, the amount of power
sold to PLN stays constant except the periodical inspection time stated below. In other words, ASC can
be a reliable power supply source for PLN.
115
Backups during periodical inspection time: Backups equivalent to 300,000 kW (to cover ASCs power needs)
is offered by PLN.
Case 2
Technology: CFB (Circulating Fluidized Bed)
CFB may also be applied to sub-bituminous coal of Indonesia of low calorific value.
Output: 150,000 kW x 3 units = a total of 450,000 kW
PPU (SPC) retails 300,000 kW to ASC, and sells 150,000 kW to PLN
Because ASCs power load lasts 24 hours in principle and remains stable relatively, the amount of power
sold to PLN stays constant except the periodical inspection time stated below. In other words, ASC can
be a reliable power supply source for PLN.
Backups during periodical inspection time: During a periodical inspection, a unit (150,000 kW) alone is halted
and power sale to PLN is also suspended. In other words, ASCs plant load (300,000 kW) is covered with
the remaining two units (150,000 kW x 2 units = 300,000 kW).
116
Fig. 3- 10
Note: The power plant is slated to be built on the site enclosed with the dotted line.
Source: Google Map
The site (captive) slated for the new power plant by ASC is located on top right in the photo above and covers
an area of 40ha at maximum.
The 40ha-site include a small hill. With the hill left as it is, an effective area for
plant construction turns to be 15ha, which could be enlarged up to 40ha if the hill was levelled.
Incidental equipment for common use: Water treatment system, waste water treatment system, refueling
tank (for auxiliary oil for start-up)
Fuel storage equipment (coal stockyard): Of silo type capable of preventing increases in the moisture
content caused by rainfalls
Other equipment: Unloder, coal forwarding system
Of these, the area required for housing the generating equipment, etc. will be around 6ha in Case 1, and around
5ha in Case 2, in reference to exising cases. By virtue of designing, however, the both can be made more
compact.
It should be noted that for the ash dump, I entrust the coal ash processing to external contractors.
Fig. 3- 11
0m
100m
Thermal effluent
discharge device
Cooling seawater
pump
Chimney
Induced Draft Fan IDF
200m
Supercrtical
boiler
300m
Turbine
building
(Including
generator)
Turbine transformer
Electric
substation
equipment
400m
Wastewater
treatment facility
500m
0m
100m
200m
300m
118
400m
500m
600m
3- 12
0m
100m
Thermal effluent
discharge device
Cooling seawater
pump
200m
Chimney
Induced Draft Fan IDF
CFB boiler
300m
Turbine building
(Including
generator)
Turbine transformer
Electric
substation
equipment
400m
Wastewater
treatment facility
500m
0m
100m
200m
300m
119
400m
500m
600m
Fig. 3- 13
Note: The slated plant construction site is located chiefly in the left part of the photo.
Spurce: ASC, Company Profile
600,000 kW x 1 unit
to ASC: 275,000 kW
to ASC: 275,000 kW
Vapor amount
Case 1 (SC)
Case 2 (CFB)
1,810t/h(100% load)
475t/h/unit3(100% load)
246 kg/cm
174 kg/cm2
566
541
566
541
Thermanl efficieny
40.5%
37.6%
120
The unit designed for Case 1 is categorized as SC (Super Critical) because its main vapor temperature stands
below 566. Yet, given that the main vapor temperature and the reheat vapor temperature alike stays at 566,
the boundary distinguishing SC from USC, the unit designed for Case 1 is given the specifications that allow the
unit to be named a quasi-USC.
h) Water intake/discharge
Cases 1 and 2 alike use seawater as cooling water for their steam turbine condensers. Seawater is taken from
121
the sea fronting the plant, while used seawater with raised temperatures should be discharged from a fairly distant
point (about 1.5km away) from the intke in order to prevent recirculation.
The intake method is designed after an open channel system, with a conduit installed from the intake to inland,
and a pump house is provided nearby the power plant. The pump house is equipped with a screening system,
chlorine feeding system and so on.
Cooling water is pipelined whenever it is forwarded in the route of pump house~power plant~discharge point,
with the pipelines buried underground.
i) Specifications (a summary)
As a summary, major specifications are tabulated below:
Case 1
Case 2
SC (Super Critical)
150,000kW3450,000kW
25,000kW
25,000kW
300.,000kW
150,000kW
275,000kW
275,000kW
8,200hrs/yrated running
8,200hrs/yrated running
1,810.0t/h
475.0t/h/unit3
(100% load
(100% load)
246.0kg/cm2
174.0kg/cm2
566
541
566
541
11 Thermal efficiency
40.5%
37.6%
5,000kcal/kg (Indonesian
4,200kcal/kg (Indonesian
subbituminous coals)
subbituminous coals)
255 t/h
245 t/h
2,089,481 t/y
2,009,498 t/y
Type
2 Generated output
3
In-house consumption
Evaporation amount
122
4) Subjects accompanied when employing the proposed technologies/systems and their solutions
Adopting a supercritical pressure power generation technology, there is a big advantage such as high efficiency
of the plant can be achieved.
On the other hand, unlike the existing power plant, the automation of new plants, personnel training operation
and maintenance is extremely important. Therefore, installation of simulator of power generation equipment, is a
more substantial problem of measures of training equipment and operation and maintenance training.
Also, because the water quality management of boiler water is very important in supercritical pressure power
generation equipment, water quality management of training at the time of acquisition and operation of knowledge
about water quality management is also important.
The EPC turnkey contract, in equipment installation and commissioning, receive performance guarantee items
to be specified in the contract are met, after the implementation of the project who has examination that there is no
equipment defects, it is equipment delivery.
In order to perform this examination to ensure properly technology negotiations for EPC contractor, it is
necessary to have the advanced technology and knowledge of power generation facilities.
In addition, it is also considered that also various technical problems occur commercial operation started later,
these technical problems are properly resolved, in order to properly technology negotiated with EPC contractor,
technical assistance by the power generation facility specialists it is desirable to receive.
Currently, in Indonesia, the mainstream is coal-fired power generation of subcritical pressure, even those made
in China for many, many things that it is stopped in trouble.
Enhancement of O & M will lead to the improvement of the improvement and profitability of the equipment
utilization rate of power generation facilities, and lead to the improvement of the reliability of investment
institutions to SPC, including the JBIC.
123
Chapter4
Evaluation of Environmental and Social Impacts
Roadside
Industrial
zone
Residential
district
Commercial
district
Roadside
Industrial
zone
Residential
district
Commercial
district
Note) The mark put on Cilegon City was made by the Study Team when editing
Water pollution
10
Based on the Ministry of Environments Monitoring Program. Of the box diagram (showing data distribution of 248
counties/cities covered by the research), top and bottom of the box represent 75%-25% values, each, and the bar shows the maximum
value among the data. The data outside the range and marked with and represent singular values. High NO2
concentrations are observed in Jakarta and other metropolitan cities, including Cilegon were the project site is located.
126
On water pollution, out of organic polluting loads, 25~50% is allegedly attributed to industrial effluents, and
50~75% to living effluents. As for industrial effluents, such industries as textile, pulp/papermaking, plywood
and rubber can be cited as major sources. Large plants, typically those run by Japan-affliated firms, are
well-equipped with waste water treatment equipment which assures adequate management, while small- and
medium-sized local plants, in not a few cases, do not have such equipment and discharge their industrial effluents
into rivers without any treatment. As a result, pollution of rivers are getting worse due to heavy metals, etc.
In addition, with few sewage installed, living effluents are left free either penetrating underground or
discharged into rivers without any treatment, the both contributing to aggravating pollution of rivers and
underground water.
Usually, well water is used as living water. But, without purified, effluents penetrating
underground contaminate water, which is drawn from the well in some cases. This situation, combined with
contamination of river water, which is another living water source, highlights worsening water pollution as a
serious problem from hygienic aspect.
Waste management
Wastes are grouped into hazardous wastes (usually called B3 Wastes after the initial letters of three
Indonesian words each meaning dangerous, hazardous and toxic) and other wastes. It is the so-called B3 Wastes
that are becoming a big problem in Indonesia. In Indonesia few waste dealers are capable of offering perfect B3
Waste treatment. Accordingly, at present B3 Wastes are stored within ones site when they cannot be outsourced.
As for any industrial wastes other than hazardous materials, they are outsoured to professional collectors, by
whom they are either landfilled or incinerated. In regard to living wastes generated from households, they are
often thrown away to rivers and/or vacant lots as they are, thus posing a major cause of water pollution of rivers,
etc.
Greenhouse gas (GHG) emissions
In 2000 Indonesias total GHG emissions in net amounted to 1.37GtCO2e. Of it cited as the largest source is
defrosration, responsible for 48%, followed by fuel consumption at 21%, peat fire at 12%, wastes at 11%,
agriculture at 5% and industrial sector at 3%. When combined, emissions resulting from defrostration and peat
amounted to 0.821GtCo2e, which accounts for 60%, with the remainder staying at 0.556GtCo2e. This level of
emissions is so high that Indonesia is joining among the worlds top 10 countries as GHG emitters. Because of
fuel switching under way to carbon-rich coals, the growth of domestic GHG emissions is outgrowing the GDP
growth and the fuel consumption growth, and is positioned as a grave environment problem in Indonesia today.
In an attempt to deal with its GHG emission problems depicted above, the Indonesian government founded the
National Climate Change Committee in 2008. Given that the country pledges a 26% cut in GHG emissions by
2020, which would be further increased to a 41% cut under cooperation of industrialized countries, the countrys
environmental policy needs to be watched carefully.
127
Cilegon, where the site slated for the proposed project (within the site of Anyer Plant owned by Asahimas
Chemical Co.), is a coastal industrial city situated in the westernmost Banten State in Java island. It is the center
of Indonesias heavy chemical industry where many steelworks and petrochemical plants are located.
This area, where Krakatau Steel Co., the largest steelmaker in Southeast Asia, is located, forms Krakatau Steel
Industrial District. Aside from Krakatau Steel Co. and Krakatau POSCO Co., many plants run by such
companies as Siemens AG, Asahimas Chemical Co., Chandra Asri Petrochemical Co. and Pertamina (state-owned
oil/gas corporation run by the government of the Republic of Indonesia) are integrated in this area and, thus, the
zone of this area has been developed well as an industrial district.
Fig4-2
Krakatau POSCO
Pertamina
Krakatau Steel
Asahimas Chemical
128
In
other words, one of the superiorities inherent to the project is that it wont be bothered by any troubles arising
from residents moving, compensation talks, etc. because there are few residents whose office/living
environment would directly be affected by the project.)
Plant Operation-related Risk
Comparing PLNs commercial plant operation records with Japans in load factor terms, PLNs records
stay at around 80% compared with about 95% achieved by Japans (10 utilities total), which shows how to
secrure high load factor and good reliability is a matter of crucial importance.13
involved in cost and stable electricity supply which requires PLN to take adequate response in its
generating capacity construction efforts.
Environmental Pollution (GHG emissions, air pollution, etc.) risk
Compared with coal-fired generating capacities developed in Indonesia so far (PLNs existing and planned
coal-fiered power plants as well as coal-fired generating capacities in general installed by various business
entities including in-house generators), the generating capacity to be introduced under the proposed project
11
Given the very tight electricity supply-demand balance of Java-Bali system today, power infrastructure construction is one of the
countrys top priorities. (See Chapter 1 (2) 4) a)<Reference: Java-Bali Systems Reserve Capacity in Recent Days>)
12
The newly-inaugurated Jocowi administration decided power development of 35,000MW to be done under its medium-term
development plan (2015~19), and publicly announced construction of additional power plants, chiefly coal-fired ones (on the ground
that coal-fired plants were found best in economics and price competitiveness).
13
All the coal-fired power plants being developed by PLN under the 1st CRASH Program (PLNs captive power plant construction
plan puts its total generated output at 10,000MW to be built by 2009, with only about 5,300MW completed as of 2014) are required
to use low-rank coals of under 4,500 kcal/kg in calorific value. No. 8 Unit at Sulalaya Power Plant, taken up in Chapter 3 (3) 5)
Case Study Information of Sulalaya Power Plant, was also built under the aforementioned plan. The No.8 Unit, a China-made
generating capacity of sub-critical type, reportedly suffers frequent ill-functions. In addition, while PLN has been introducing
circulatory fluidized bed (CFB) boilers, which permit direct combustion of low-rank coals, foreign-made CFB boilers employed by
PLN have proved poor performances so far, registering a rash of events, including frequent accidental outages and extremely low
utilization factors.
As the principal factors behind the miserable records, some point out that such troubles should often arise from careless designing,
where prudent cares were paid little to the construction, and operating & maintenance technologies actually in use, on top of the
problems related to equipment design and quality of selected equipment due to lack of concerns to seek best-matching ones to
physical properties of coals in use.
129
not only features excellent efficiency but also assumes to be opertated by taking adequate measures to meet
stringent environmental standards. That is, without the project, the opportunity of realizing its comparative
advantages should be lost.14
14
On the calculations of CO2 emissions, see the next section (2) Improved Environment by the Proposed Project.
130
a) Indonesian Grid
Average emission factor of 2013 in Indonesia of system power (emissions per unit), according to the power
supply plan of PLN (RUPTL) 2013-2022 (Abridged), a 766 g-CO2 / kWh. However, this value is the total power
mean value, because it is not a value of the coal-fired, can not be used for comparison.
On the other hand, according to the CO2 Emissions from Fuel Combustion of IEA (2013 Edition), CO2
emissions per unit of Indonesia's coal-fired of 2011 is 1,065 g-CO2 / kWh.
TEPCO design, as well as Adaro, Inc.: E5000 & E4000 spec sheet), 55% (Case 1: 5,000kcal / kg), 50%
(Case 2: 4,200kcal / kg).
CO2 and molecular weight ratio of carbon = 44/12
CO2 emissions per unit (g-CO2 / kWh) = annual CO2 emissions (g-CO2 / year) annual power generation
amount of power (kWh / year)
As a result, CO2 emissions per unit of the subject project, case 1 (600 000 kW, SC) at 856 g-CO2 / kWh, case 2
(450 000 kW, CFB) has been estimated at 988 g-CO2 / kWh in.
When you compare it to the value of a), CO2 emissions per unit of the target project, compared to coal-fired
average of Indonesia, case 1 with a 20% reduction, was calculated to be 7% reduction in case 2.
In addition to the reference, "life cycle CO2 emissions assessment of Japan's power generation technology,"
Central Research Institute of Electric Power Industry According to (2010), pulverized coal-fired power of Japan
(Sub-C, SC, USC) and CO2 emissions from fuel combustion of unit is a 887 g-CO2 / kWh.
131
Annual CO2 emission reduction (t-CO2 / year) = average CO2 emissions per unit (t-CO2 / kWh) annual
amount of power generated target project of Indonesia coal-fired (kWh / year) - the target project (Case 1
annual CO2 emissions) (t-CO2 / year)
As a result, CO2 emission reductions due to the target project (case 1), 1,026,012 t-CO2 / year, ie has been
calculated to be about 1.03 million t-CO2 / year.
132
a) Permits/explanations
(1)EIA and
environmental
permits
Check Results
information disclosure.
socio-environmental matters).
(2)Explanations to
local stakeholders
(3)Examinations of
options
restaints
133
Check Results
Items
spraying).
zones
countrys standards
(2)Water quality
(3)Wastes
or disposed of.
(4)Noize/vibration
134
Environmental
Major Check Points
Check Results
Items
countrys standards.
135
c) Natural environment
Check Results
Items
(a) If the site is located with any reserve
(a): The planned site for this project does not include
(b): The planned site for this project does not include
impact on ecology
must be done.
(2)Ecological
system
for the project produces impacts on water
environment, typically rivers.
If measures are
136
d) Social environment
Check Results
Items
(a) If the implementation of the project causes
If so,
living.
when necessary.
(2) Life/living
If insufficient, any plan
137
Environmental
Major Check Points
Check Results
Items
on traffics when necessary.
as HIV).
(4)Landscape
are needed.
environment
public health), if response measures are
planned/implemented for project staffs in
software terms.
(d) If adequate measures are taken so that
guardmen involved in the project should not
infringe safety of project staffs and local
residents.
e) Others
Check Results
Items
(a) If measures are prepared to mitigate pollution
works, if any.
(1)Influence of
system) and, also, if measures are prepared for
construction works
mitigating such effects.
(c) If construction works can have adverse
effects onsocial environment and, also, if
measures are prepared for mitigating such
effects.
(a) In case of coal-fired power plant, if plan is
(2)Accident-
preventive measure
(3)Monitoring
(4)Others
139
As already mentioned, compared with coal-fired power generating capacity currently available in Indonesia
(PLNs existing coal-fired power plants and other coal-fired power plants of various types planned generally by
any other projects), the power plant designed under this project will be equipped with highly efficient facilities
which are environment-benign thanks to a host of advanced eco-systems, each capable of offering adequate
measures to meet stringent environmental standards. In this sense, if the former option is taken, a strong
likelihood is that the country will loose a big chance to realize such comparative advantages inherent to this
project. Moreover, as aforementioned, the site slated for this project is located within ASCs captive plant site, of
which peripheral coastal areas are already well-developed as industrial districts, whereby opposition by local
residents (due to such problems as their affected occupational/living environment and land expropriation troubles)
is least likely to pose serious impediments. And yet, construction of coal-fired power plants in this country can
be counted as risk-ridden by nature as depicted above.
As for the latter option, this project is proposed only after meticulous efforts with which a host of candidate
technologies were put to examination in hopes to identify optimal one under the constraints in this country and, in
that process of examination, a plural number of options were put to comparison in order to evaluate their
merits/demerits from various angles including their likely impacts on environment.15
of detailed design, careful examination is planned to learn what impacts can be produced on environment by each
of the component technologies adopted in this project because of their characteristics, which are found
outstanding essentially.
For instance, problems are noted little in regard to likely impacts on reserves, local residents,
among others.
15
140
Tab.4-6
Category
Basic law
Ordinance
Presidential decree
Procedures
and
Environment
Monitoring
Procedures
(NO.KEP-12/MENLH/3/1994)
Ministerial ordinance
Source: Study Team based on The Ministry of Environment Various Materials on Indonesias AMDAL Laws,
materials furnished by Indonesias Environment Ministry, the EIA Div.
16
Enforced under the Law No. 4 of 1982, and drastically amended under the Law No. 23 of 1997. Amended in 2009, and the
resultant Law as amended was promulgated and enforced on October 3.
17
No. 51 of 1993, replaced by No. 27 of 1999 as amended, and by No. 27 of 2012 as amended.
141
b) Space planning
In Indonesia, space-planning laws has been prepared on the use and development of the countrys territorial
space. The first of the laws of this type weres the Presidential Decrees set forth in the 1980s, followed by the
enactment of the basic law entitled the Law No. 26 on Space Planning of 2007. Pursuant to the basic law and
its relevant laws and regulations, notably ministerial ordinances and presidential decrees, the national and local
governments (state and city/county) are preparing their basic plans for space utilization/development in their
juristictions, based on which they commit to zoning of reserves and development areas by purpose. Siting of
coal-fired power plant is also required to be coherent to space planning of the affected area, which is counted as an
essential precondition for AMDAL and issuane of environmental permits.
Tab.4-7
Category
Laws
Basic law
Ordinances
Presidential decree
Source: Study Team based on The Ministry of Environment Various Materials on Indonesias AMDAL Laws,
materials furnished by Indonesias Environment Ministry, the EIA Div.
Tab.4-8
Field
Air quality
Laws
Ordinance on the Prevention of Air Pollution (Ord. No. 41 of 1999) 18
Environment Ministrs Ordinance on Air Pollution Indicators (No. 45 of 1997)
Environment Ministrs Regulation on the Standards of Flue Gas from Fixed-Source
Boilers (No. 7 of 2007)
Environment Ministrs Regulation on the Standards of Flue Gas from Fossil Fuels-fired
Power Plants (No. 21 of 2008)
18
In 1993 the guidelines on the prevention of air pollution under the Environment Ministrys jurisdiction were specified by a
ministerial ordinance, based on which environmental standards are set.
142
Field
Laws
Environment Ministrs Regulation on the Implementation of Preventive Efforts for
Local Air Pollution (No. 12 of 2010)
Water quality
Ordinance on Water Management and the Prevention of Water Quality Pollution (No.
82 of 2001)19
Ordinance on the Prvention of Marine Pollution and Destruction (No. 19 of 1999)
Environment Ministrs Ordinance on the Standards of Industrial Effluents (No. 51 of
1995, No. 122 of 2004 as amended thereof)
Environment Ministrs Ordinance on the Guidelines on the Determination
of Water
Odor
Wastes
Source: Study Team based on The Ministry of Environment Various Materials on Indonesias AMDAL Laws,
materials furnished by Indonesias Environment Ministry, the EIA Div.
19
Relevant guidelines were specified by a ministerial ordinance, based on which environmental standards are set.
143
Flue Gas Standards for Fossil-fueled Plants (equipped with 24-hour monitoring system)
Max. allowance (mg/Nm3)
Index
Coal
Oil
Gas
750
650
50
750
450
320
100
100
30
Opacity
20%
20%
21
22
Source: Environment Ministrs Ordinance on the Standards of Flue Gas Standards from Fossil Fuelsfired Power Plants No. 21 of 2008 (Appendix 1B)
Effluents standards
Tab.4-10 Effluent Standards for Fossil-fueled Plants CPU (Centra lProcessing Unit for effluents)
Index
Unit
Allowance
6-9
mg/L
100
mg/L
10
mg/L
0.5
mg/L
0.5
Copper (Cu)
mg/L
Ferrous (Fe)
mg/L
mg/L
mg/L
10
pH
Zinc (Zn)
4-
Phosporous (PO )
1
When cooling tower blow Down flows through the liquid waste treatment ground ,
20
The Ordinance of the Prevention of Air Pollution (No. 41 of 1999) set forth air quality standards for 13 matters. The Environment
Ministers Ordinance (No. 45 of 1997) introduced pollution standard indexes. Also, the Ordinance on Water Management and the
Prevention of Water Quality Pollution (No. 82 of 2001) stipulated environmental standards of fresh water which are grouped into
four types by use, while water quality standards for seawater is regulated under the Environment Ministers Ordinances (Nos. 51
and 179 of 2004). The standards of effluents originating from fossil-fueled power plants are provided by the Environment
Ministers Regulation (No. 8 of 2009).
21
Gaseous volume is measured under standard conditions (atmospheric temperature at 25.0, atmospheric pressure 1 atm.)
22
Opacity is employed as a practical monitoring index.
23
On all allowances, it is required to achieve 95% of the specified levels at least within 3 days.
144
Unit
Allowance
6-9
Copper(Cu)
mg/L
Ferrous (Fe)
mg/L
pH
Unit
Allowance
6-9
mg/L
mg/L
mg/L
10
pH
Free chlorine (Cl2)
Zinc (Zn)
PO
When cooling tower blow Down does not flow through the liquid waste treatment ground
Unit
Allowance
6-9
mg/L
100
pH
Total suspending particulates(TSP)
Index
Unit
Water temperature
Free chlorine (Cl2)
1
mg/L
Allowance
40
0.3
When a water source of supply does not flow through the liquid waste treatment ground
Tab.4-15
Index
pH
Salinity concentrations
Unit
Allowance
6-9
When desalination processing waste water does not flow through the processing ground
145
Tab.4-16
Index
Unit
Allowance
6-9
pH
(2-)
SO4
When the drainage of the seawater wet process scrubber system is not called off in the processing ground
Unit
Allowance
6-9
mg/L
200
Ferrous
mg/L
Manganese
mg/L
pH
Allowance
mg/L
300
mg/L
110
Oils
mg/L
COD
15
When waste water containing oils does not flow through the processing ground
a) Applications/approvals
The power to implement environment impact assessment is endowed to the central governments ministry
having the jurisdiction over the project, as well as the state governments and special administrative districts across
the country, with each institution concerned expected to form its own Environmental Asseessment Committee
24
146
which is responsible for prior screening and reviews on the contents of EIA reports. Of them, the Central
Committee for Environmental Impact Assessment set at the national government level is chaired by the head of
the ministry having the jurisdiction over the project, while the committees at the local level are presided by state
governors. These EIA committees are two-tiered in general and consist of a standing committee and a
non-standing committee, with the former participated by the representatives of competent administrative
organizations, experts on environmental issues and environmental groups, and the latter by the representatives of
citizens two. The flow of application and permits is summarized below.
Screening
The entity which plans or implements a project files a project plan to the office having the jurisdiction thereof,
where it is put to screening to determine if environment impact assessment needs to be made on the planned
project (on which judgment/decision by the EIA committee is made within 30 days at latest).25
Scoping
In case the need for EIA implementation is decided, the project entity is required to submit AMDAL research
specifications (TOR) and implementation plan (KA-ANDAL), which are reviewed by local administrative staff in
charge within 30 days at latest.26
Approval of AMDAL
Continuing from the above, the project entity is required to prepare and submit an EIA report (ANDAL) and a
planning documents for environmental management plan and environmental monitoring plan (RKLRPL). On
these, the EIA committee judges/determines their compatibility to the prescribed requirements within 75 days at
latest. (When found compatible) the project can be approved by either the Environment Minister or the
Governor concerned.
25
Screening is made in pursuant to the list specified by the Environment Ministrys Ordinance No.3 of 2000 (amended by Ministrys
Ord. No.12 of 2001 and No. 11 of 2006). Under the law, the project entity isrequired, after screening, to prepare EIA research
spesifications (TOR) (scoping). Also, in 2012, an environmental license acquisition system was introduced and AMDAL was
amended as well (Ord. No. 27 of 2012), with which EIA procedures must comply.
26On the review process, conventional rules, stating that EIA Committee shall make the revies within 75 days at latest, was
streamlined by amendment of AMDAL in 2012 (Ord. No.27 of 2012).
147
148
Chapter5
Financial and Economic Evaluation
In dollars
(US$ Mil.)
197.8
439.9
232.8
130.1
289.3
153.1
47.4
105.4
55.8
Electric/control equipment
36.6
81.4
43.0
55.6
123.5
65.4
77.9
173.3
91.7
Sub-total
545.5
1,212.8
641.7
54.5
121.3
64.2
600.0
1,334.1
705.9
Total
In dollars
(US$ Mil.)
132.0
482.9
170.3
86.8
317.6
112.0
31.6
115.7
40.8
Electric/control equipment
24.4
89.3
31.5
37.1
135.6
47.8
34.2
125.1
44.1
Sub-total
346.1
1,266.2
446.6
34.6
126.6
44.7
380.7
1,392.8
491.3
8
9
152
Interest during construction was calculated on the assumption that a lump-sum loan (Case 1: 71.7% of the total
cost, Case 2: 59.3% thereof) would be provided in the first year of the construction period (3.0 years) under the
terms below.
JBIC investment finance:
Annual interest rate: Standard interest rate (LIBOR: US$, 6 months) 0.3768% + risk premium 5.0%* =
5.3768%
(*Note: Risk premium will be actually decided after evaluation in each individual case, here for the IIR
estimates, based on hearing results from the JBIC, was set here as 5.0%.)
Term of repayment: 15 years
Term of grace: 3 years
Repayment method: Principal paid back in equal installments
Others:
Annual interest: 8.00% (provisionally assumed)
Term of repayment: 15 years
Term of grace: 3 years
Repayment method: Principal paid back in equal installments
Tab.5- 3
In dollars
Total(US$Mil.)
600.0
1,334.1
705.9
US$ Mil.
1
Substation (additional)
1.5
18.9
3.0
Sundry cost1+2=5%
30.1
67.7
35.4
93.4
0.0
93.4
725.0
1,420.7
837.8
Total
US$1Rupia 12,600
153
Tab.5- 4
In dollars
US$ Mil.
1
In dollars
US$ Mil.
380.7
1,392.8
491.3
Substation (additional)
1.5
18.9
3.0
Sundry cost1+2=5%
19.1
70.6
24.7
53.8
0.0
53.8
455.2
1,482.3
572.8
Total
US$1Rupia 12,600
3) Running costs
The costs below were counted as running costs.
a) Cost incurring in operation and maintenance
b) Cost to purchase coals used as fuels
Annual coal requirements estimated in Chapter 3 x unit price of coals
Unit price of coals:
Based on the table A Data List by Calorific Value and by Brand presented in Chapter 3, the unit
prices below were employed as the representative ones.
Case 15,000kcal/kg 57.65 US$/t
Case 24,200kcal/kg 35.00 US$/t
c) Land costs: With construction site already available, no additional costs, incl. rent.
d) Various premiums: Included in the operation/maintenance cost.
e) Interest payment: Annual interest paid when paid back under the terms shown in 2).
f) Corporate tax rate: 25%
In dollars
US$ Mil.
In dollars
US$ Mil.
Operation/maintenance
8.1
204.5
24.3
Fuel
0.0
1,517.8
120.5
Land
0.0
0.0
0.0
Premiums
Include in 1
Include in 1
Include in 1
Interest payment
5.38%/8.00%
0.0
5.38%/8.00%
Corporate tax
0.0
25%
25%
US$1Rupia 12,600
154
In dollars
US$ Mil.
In dollars
US$ Mil.
Operation/maintenance
5.6
142.3
16.9
Fuel
0.0
886.2
70.3
Land
0.0
0.0
0.0
Premiums
Include in 1
Include in 1
Include in 1
Interest payment
5.38%/8.00%
0.0
5.38%/8.00%
Corporate tax
0.0
25%
25%
US$1Rupia 12,600
155
156
Tab.5- 7
Investme
Return
Running
Depreciati
Pre-tax
After-tax
Cash
profit
flow
8=6-7
9=8+5+4-1
Tax
Yea
nt
cost
back
on
profit
6=2-3-4-5
r
7
279.26
-279.26
279.26
-279.26
279.26
-279.26
245.48
144.80
53.63
20.94
26.10
6.53
19.58
94.15
251.35
148.26
53.63
20.94
28.51
7.13
21.38
95.96
257.35
151.80
53.63
20.94
30.97
7.74
23.23
97.81
263.50
155.43
53.63
20.94
33.50
8.37
25.12
99.70
269.80
159.15
53.63
20.94
36.08
9.02
27.06
101.64
276.25
162.95
53.63
20.94
38.72
9.68
29.04
103.62
10
282.85
166.84
53.63
20.94
41.43
10.36
31.07
105.65
11
289.61
170.83
53.63
20.94
44.20
11.05
33.15
107.73
12
296.53
174.91
53.63
20.94
47.04
11.76
35.28
109.86
13
303.62
179.10
53.63
20.94
49.95
12.49
37.46
112.04
14
310.88
183.38
53.63
20.94
52.93
13.23
39.69
114.27
15
318.31
187.76
53.63
20.94
55.97
13.99
41.98
116.56
16
325.92
192.25
53.63
20.94
59.09
14.77
44.32
118.90
17
333.71
196.84
53.63
20.94
62.29
15.57
46.72
121.29
18
341.68
201.55
53.63
20.94
65.56
16.39
49.17
123.75
19
349.85
206.36
20.94
122.54
30.64
91.91
112.85
20
358.21
211.29
20.94
125.97
31.49
94.48
115.42
21
366.77
216.34
20.94
129.48
32.37
97.11
118.06
22
375.54
221.51
20.94
133.08
33.27
99.81
120.75
23
384.51
226.81
20.94
136.76
34.19
102.57
123.51
24
393.70
232.23
20.94
140.53
35.13
105.39
126.34
25
403.11
237.78
20.94
144.39
36.10
108.29
129.23
26
412.74
243.46
20.94
148.34
37.08
111.25
132.20
27
422.61
249.28
20.94
152.38
38.10
114.29
135.23
28
432.71
255.24
20.94
156.53
39.13
117.39
138.34
157
Investme
Return
Running
Depreciati
Pre-tax
After-tax
Cash
profit
flow
Tax
Yea
nt
cost
back
on
profit
6=2-3-4-5
8=6-7
9=8+5+4-1
29
443.05
261.34
20.94
160.77
40.19
120.58
141.52
30
453.64
267.59
20.94
165.11
41.28
123.83
144.78
31
464.48
273.98
20.94
169.56
42.39
127.17
148.11
32
475.58
280.53
20.94
174.11
43.53
130.58
151.53
33
486.95
287.23
20.94
178.77
44.69
134.08
155.02
34
498.59
294.10
20.94
183.54
45.89
137.66
158.60
35
510.50
301.13
20.94
188.43
47.11
141.32
162.27
36
522.70
308.32
20.94
193.44
48.36
145.08
166.02
37
535.20
315.69
20.94
198.56
49.64
148.92
169.86
38
547.99
323.24
20.94
203.81
50.95
152.85
173.80
39
561.09
330.96
20.94
209.18
52.29
156.88
177.83
40
574.50
338.87
20.94
214.68
53.67
161.01
181.95
41
588.23
346.97
20.94
220.31
55.08
165.23
186.18
42
602.28
355.27
20.94
226.07
56.52
169.56
190.50
43
616.68
363.76
20.94
231.98
57.99
173.98
194.93
3,735.47
4,539.97
FIRR
11.5%
837.77
804.50
837.77
Return
Running
Depreciati
Pre-tax
After-tax
Cash
profit
flow
8=6-7
9=8+5+4-1
Tax
Yea
nt
cost
back
on
profit
6=2-3-4-5
r
7
190.93
-190.93
190.93
-190.93
190.93
-190.93
181.44
87.27
30.88
14.32
48.97
12.24
36.72
81.93
185.78
89.36
30.88
14.32
51.22
12.80
38.41
83.61
190.22
91.49
30.88
14.32
53.52
13.38
40.14
85.34
194.76
93.68
30.88
14.32
55.88
13.97
41.91
87.11
199.42
95.92
30.88
14.32
58.30
14.57
43.72
88.92
204.18
98.21
30.88
14.32
60.77
15.19
45.58
90.78
10
209.07
100.56
30.88
14.32
63.30
15.83
47.48
92.68
11
214.06
102.96
30.88
14.32
65.90
16.47
49.42
94.62
12
219.18
105.42
30.88
14.32
68.55
17.14
51.41
96.62
13
224.42
107.94
30.88
14.32
71.27
17.82
53.45
98.65
158
Investme
Return
Running
Depreciati
Pre-tax
After-tax
Cash
profit
flow
Tax
Yea
nt
cost
back
on
profit
6=2-3-4-5
8=6-7
9=8+5+4-1
14
229.78
110.52
30.88
14.32
74.05
18.51
55.54
100.74
15
235.27
113.17
30.88
14.32
76.90
19.23
57.68
102.88
16
240.89
115.87
30.88
14.32
79.82
19.96
59.87
105.07
17
246.65
118.64
30.88
14.32
82.81
20.70
62.11
107.31
18
252.55
121.48
30.88
14.32
85.87
21.47
64.40
109.60
19
258.58
124.38
14.32
119.88
29.97
89.91
104.23
20
264.76
127.35
14.32
123.09
30.77
92.32
106.64
21
271.09
130.39
14.32
126.38
31.59
94.78
109.10
22
277.57
133.51
14.32
129.74
32.43
97.30
111.62
23
284.20
136.70
14.32
133.18
33.30
99.89
114.21
24
291.00
139.97
14.32
136.71
34.18
102.53
116.85
25
297.95
143.31
14.32
140.32
35.08
105.24
119.56
26
305.07
146.74
14.32
144.01
36.00
108.01
122.33
27
312.36
150.25
14.32
147.80
36.95
110.85
125.17
28
319.83
153.84
14.32
151.67
37.92
113.75
128.07
29
327.47
157.51
14.32
155.64
38.91
116.73
131.05
30
335.30
161.28
14.32
159.70
39.92
119.77
134.10
31
343.31
165.13
14.32
163.86
40.96
122.89
137.21
32
351.52
169.08
14.32
168.12
42.03
126.09
140.41
33
359.92
173.12
14.32
172.48
43.12
129.36
143.68
34
368.52
177.26
14.32
176.94
44.24
132.71
147.03
35
377.33
181.50
14.32
181.51
45.38
136.14
150.46
36
386.35
185.83
14.32
186.19
46.55
139.65
153.97
37
395.58
190.27
14.32
190.99
47.75
143.24
157.56
38
405.03
194.82
14.32
195.89
48.97
146.92
161.24
39
414.72
199.48
14.32
200.92
50.23
150.69
165.01
40
424.63
204.25
14.32
206.06
51.52
154.55
168.87
41
434.78
209.13
14.32
211.33
52.83
158.50
172.82
42
445.17
214.13
14.32
216.72
54.18
162.54
176.86
43
455.81
219.24
14.32
222.24
55.56
166.68
181.00
3,868.88
4,332.10
FIRR
14.3%
572.80
463.22
572.80
159
3General appraisal
Calculation results put FIRR of the proposed project at 11.5% (Case 1) and 14.3% (Case 2).
These results considerably outstrip Indonesias long-term interest rate (7~9%), thus suggesting excellent
feasibility of this project.
As one of the reasons, it is attributable to that the project is free from the running cost incurring in land use,
because the site for power plant construction has already been secured by ASC. Among others, availability of
relatively inexpensive subbituminous coals abundant in coal-rich Indonesia can be cited.
On top of these, the project is expected to allow electric power procurement for much cheaper price than
offered by PLN and, through inverse current of power into PLNs grids which are badly in need of electricity, the
project can contribute to alleviating Indonesias tightening electricity supply and demand.
In the meantime, while the calculations were made by setting the PLNs purchase price cheap at 656 Rp/kWh
(approx. 6 cents/kWh) identical to that for in-house power producers surplus output, the price is actually settled
by bilateral negotiations with PLN. Considering the projects contribution to mitigating PLNs grid problems, a
likelihood is that a higher price can be settled by negotiations. If so, with FIRR standing higher than calculated
this time, this project is likely to demonstrate even more excellent feasibility in economic terms.
160
Chapter6
Planned Project Schedule
The execution schedule of the project is as follows. This project is construction of the power plant executed in
existing plant premises. Therefore, there is no problem of concerning making the site safe. In addition, there are
too neither of problems concerning the influence on an environmental society, too. In other words, it is judged that
achievement that is smoother than the construction of a new power plant is possible.
2015
1
2016
2
2017
2
2018
2
2019
2
detailed FS
Planning
detailed design
SPC Formation
Securing
resource
of
Financing
IUPTL & WU
Obtaining
permits
of
AMDAL
and
164
Chapter7
Implementing Organizations
Ministry of Energy
and Mineral
Resources
Cilegon City
Industry Coops
Local Bureau of
Environment
PLN
Approval of AMDAL
Management/supervision of environmental monitoring
Approval of service-area transfer involved when electricity supply
service is offered.
Conclusion of PPA (for selling electricity to PLN) when electricity
supply service is offered.
Source: Prepared by the fact-finding mission.
Japanese trading companies and electric utilities, among others, are assumed to be major contributories.
Meanwhile, through the provision of its site (contribution in kind), Asahimas Chemical is likely to seek a direction of
having influence on this project in the capacity of off-taker.
27
168
Table 7-2 Entities Participating in Project Development Stage and Their Roles & Responsibilities
Entities
Asahimas Chemical
SPC
Table 7-3 Entities Participating in Project Implementation Stage and Their Role& Responsibilities
Entities
Asahimas Chemical
Roles/Responsibilities
Participating in the project in the capacity of contributory in kind
(provision of land).
Concluding PPA with SPC as a major off-taker.
(After the plant commissioned) receiving electricity and paying its
tariff.
SPC
169
Chapter8
Technical Advantage of Japanese Companies
1) Investment
Projects that are subject to Overseas Untied Loan Insurance of project finance and NEXI by JBIC (Japan trade
insurance) are generally of the entire Japanese companies Invested has been demanded more than 30% of the total
amount of investment. Have been made also mention that effect at the time of hearing from JBIC.
As a candidate of Japanese companies that may be investor, Japanese power companies, trading companies, and
the AGC and the like are considered.
It should be noted that, as a candidate of Japan other than companies overseas investors, overseas power
investment company (IPP companies of Asia where Japanese companies have invested, etc.), be considered such
as Indonesia domestic operators.
2) Equipment supply
The domestic heavy electrical manufacturers, many companies that had a high level of technology and product
development capabilities that meet the advanced technology needs, environment compared to overseas
correspondence, energy conservation, and the competitiveness excellent technical aspects such as smaller and
lighter have.
Also super critical pressure (SC) power generation facilities, has been forming technology in harsh
environmental standards for many years in Japan, I have a wealth of delivery record. Recently has increased the
cost competition with overseas manufacturers (especially China), but the reliability of Japanese companies in the
technical high.
Looking at the track record orders of overseas Japanese manufacturers since 2011 related to supercritical
pressure (SC) coal-fired equipment, Japanese manufactures have been piled up orders steadly, such as Toshiba
from India and South Korea, Hitachi (now: Mitsubishi Hitachi Power Systems) from India, Mitsubishi Heavy
Industries (now: Mitsubishi Hitachi Power Systems) from Taiwan, etc.
On the other hand, CFB (circulating fluidized bed) boiler has been developed and commercialized originally by
Western companies, such as Foster Wheeler and Lulgi as two large companies, as well as Kvaerner, Battelle, and
Germany Babcock Wilcock etc.
Japanese companies are also manufacturing CFB boiler by receiving technical assistance from companies in
Europe and the United States. Major Japanese companies are Sumitomo Heavy Industries (technology partner:
Foster Wheeler), Mitsubishi Heavy Industries (same: Lulgi), Mitsui Engineering & Shipbuilding (same: Battelle),
FJK (same: Stein Mueller), etc.
Orders received by world two major companies (Foster Wheeler, Lulgi) for 1985-2006 years (amount of
172
evaporation 150t / h or more) is totally 116, while four major Japanese companies recieved 20 orders (amount of
evaporation 150t / h or more) from 1989 to 2007.
In this way, received orders of Japanese companies is less compared to two large companies overseas, recently,
such as orders for CFB coal-fired the Sumitomo Heavy Industries utilizing the low-goods coal from Antam in
Indonesia in 2013, steadily It has been active, according to the expert hearing, there is a reputation for technical
reliability of the height of Japanese companies.
Tab.8- 1
PLN
ASC
JBIC
AGC
SPC)
NEXI
EPC
Note: Shaded part of the orange: Areas involved is expected of Japanese companies or Japanese companies.
Light blue shaded part: Japan's public institutions.
173
2) Economic superiority
174
After a review of the JBIC, it was found that the above motion is directly limited to the export financing (export
credit). The handling of coal-fired in export credit, currently have been conducted to examine towards the revision
of the OECD export credit guideline (arrangement), it is expected that conclusion comes out in about a year. If the
ball lands in conclusion, the Japanese government and JBIC will basically follow this guidline.
On the other hand, investment finance is a different world from export finance, and the direct impact of the
Obama initiative is small. They said that there is no particular problem regarding the investment finance for
super-critical pressure (SC) and CFB. However, they said that more high efficiency for CFB will be preferred.
Whether this trend is to expand how the future, there is a continuing need to perform the attention.
However, amid the surge energy demand mainly in developing countries future, supply is stable, the country to
select the excellent coal-fired power generation in the economy as a national plan many, further expansion of coal
use is expected. For this reason, there is also energy situation of developing countries countries, the close the
option of introducing a coal-fired I considered difficult.
In Indonesia, has serious power supply and demand problem due to a lack of power supply, the construction of
coal-fired power generation using a rich coal of domestic, it is promoted by citing the country.
On the other hand, in order to obtain an understanding of investors and lending institutions to SPC also, with
high efficiency, low carbon emission type as much as possible, it may be desirable to introduce friendly coal-fired
to the environment.
175
176
177