Coal crisis forces PLN's subsidiary to close down one power unit

PT Indonesia Power, a subsidiary of state electricity company PT PLN, has been forced to take emergency measures, including closing one power unit, at its giant coal-fired power plant in Suralaya, West Java due to shortages of coal supplies.

Indonesia Power's corporate secretary Lilie Tjarlie said on Thursday the company had closed down one power unit with the power generation capacity of 600 megawatt (MW) at the Suralaya power plant and reduced the production of the other six units up to 50 percent.

The Suralaya power plant, billed as the largest power plant in South East Asia, has three power units each with the power generation capacity of 600 MW, and four power units each with the power generation capacity of 400 MW. It accounts for 30 percent of coal supplies to the Java-Bali power grid.

Lilie said the company now had only about 35,000 tons of remaining coal stock, which is enough for only one day of operation.

Sources earlier told Petromindo.Com that under the pressure of the ministry of finance, four coal companies, including PT Kaltim Prima Coal, PT Arutmin, PT Kideco Jaya Agung and PT Bukit Sunur, had agreed to supply the power firm with the government percent share in their coal output. Under the contracts, the government is entitled to receive13.5 percent of their coal output in tax and royalties.

But, Lilie denied the allegation, saying none of the country's coal producers have thus far showed interest to cover the shortfall in the coal supply to the power firm.

Lilie said that Indonesia Power might ask for high sulfuric diesel oil from state oil and gas company Pertamina, citing that some of Suralaya's power units can use the kind of fuel, instead of coal.

Indonesia Power is also asking the government's approval for the company to buy coal from the spot market at the international price of import the coal from Australia, she added.

Thus far, Indonesia Power has received its coal supplies mainly from state coal mining company PT Bukit Asam, but the latter has reduced its supplies due the alleged transportation problem.

Other companies are not interested to sell their coal to Indonesia Power due to the low price quoted by the power firm for their coal supplies.

Indonesia were only ready to buy at Rp 150,000 (around US$15) per ton, as against the market price of between $21 and $22 per ton. (Bodega)