WHY DON'T WE USE COAL TO PRODUCE CHEAP ELECTRICITY?

By Andi Abdussalam

Jakarta, Oct 5 (ANTARA)  - Indonesia has large coal deposits that can be used  as a cheap alternative energy to replace expensive fuel  oils so that the government no longer needs to spend huge amounts of funds to subsidize state-owned electricity firm (PLN)  which so far still uses costly oil to produce electricity for the people.          However, most of Indonesia's coal production so far is for exports and only about 25 percent is for domestic consumption. "Some of the coal production is exported so that supply for the need at home became small," Nurdin Tampubolon,  deputy chairman of the House of Representatives (DPR)'s Commission VI for energy affairs, said recently.          Next year, for example, only about 24.17 percent of the coal production in the country will be used for domestic consumption.  Based on data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia's coal production in 2011 is set at 326.65 million tons. But only 24.17 percent or 78.97 million tons are earmarked for domestic consumption.          Nurdin Tampubolon said that Indonesia actually had enough energy sources to meet the need of its electricity and industry at home. Indonesia is the biggest coal producer in the world with a huge amount of coal deposit which could be exploited for about 100 years.          According to the ministry of energy, Indonesia has at least 19 billion tons of coal deposits that may replace oil and gas as a source of energy in the future.          Only a small part of the coal deposits has so far been used while the country's coal production has reached over 250 million tons  per year.          The Ministry of Energy and Mineral Resources has predicted that Indonesia's coal production in 2011 would reach 326.65 million tons, up 24.45 percent from that a year earlier which stood at 262.48 million tons.          Based on ESDM Minister Darwin Saleh's decree August 31, 2010,  the coal production for next year is expected to came from 53 coal mining companies in the country. Of the 53 firms, 42 coal exploitation contract companies, one state-owned firm and 10 authorized coal mining enterprises.          The ministry also predicted that coal need for domestic consumption was about 78.97 million tons in 2011. The minimum need for coal at home was set at 24.17 percent of the targeted 362.65 million tons.          Of the total domestic consumption, the ministry predicted that generators' need  for coal in 2011 is about 66.28  million tons  while the need of the state-owned electricity firm PLN was set at 55.82 million tons.          Primary Energy Director of PLN Nur Pamudji said that the need for coal of PLN based on the energy ministry was in accordance with the state-owned power firm's request.          He said that of the allocation of 55.82 million tons, about 23.32 million tons would be used for PLN's 10,000 megawatt power generators and the remaining 32.5 million tons for generators other than the 10,000 MW power program. "This year, the need of PLN for coal reaches 38 million tons," he said.          Other allocation of Next year's coal production would be channeled to private power generators amounting to 8.97 million tons, PT Freeport Indonesia 0.83 million tons, PT Newmont Nusa Tenggara 0.47 million tons and PT Pusaka Jaya Palu Power 0.19 million tons.          In the meantime, metallurgy factories will need 0.43 million tons which consist of 0.14 tons for PT Inco and 0.2 million tons for PT Aneka Tambang.          Allocation for cement, fertilizer, pulp and textile factories will amount to 12.35 tons which consist of 8.86 million tons for cement factories, 0.92 million tons for fertilizer firm, 0.6 million tons for pulp and 1.97 million tons for textile and textile-product factories.          Of the 53 coal mining companies which were expected to produce the 326.65 million tons next year, publicly listed PT Batubara Bukit Asam  (PT BA) is expected to produced 15 million . The company's present capacity is around 12 million tons a year.          PT BA even intends to  become Indonesia's biggest coal producer in 2016 with its production to reach 70 million tons a year. Its president director, Sukrisno, said. He was optimistic the target would be met. It would beat PT Adaro Tbk.'s production which is around 45 million tons a year.          "With the additional coal shipping railway infrastructure and coal collection port we are optimistic we will become the biggest national player," he said at the signing of cooperate to develop the 270 kilometer long coal shipping railway from Tanjung Enim to Tanjung Api-Api recently.           Sukrisno said  his company's coal production this year was expected to reach 12 million tons. To meet coal demands in the national and international market the company had raised its coal output significantly,  Soetrisno said on the sidelines of the opening ceremony of Indonesian Fire and Rescue Challenge (IFRC) recently.     on Monday.          The project worth US$1.6 billion and financed by an Indian investor is expected to be able to increase coal shipping capacity significantly and operate in 2014 with a load capacity of 35 million tons a year.          Sukrisno said PT BA's coal reserves reached 6.5 billion tons. "We will continue exploring them while acquiring mining companies in Kalimantan," he said. ***2*** (T.A014/A/HAJM/13:58/f001 ) 05-10-2010 13:57:3