Coal policy must be revised: ICS

The present coal policy must be revised if the government wants its plan to prioritize the building of new coal-fired power plants should not be hampered, the Bisnis Indonesia newspaper reported in its Tuesday edition.

Indonesian Coal Society (ICS) director Singgih Widagdo said the government?s plan to convert the diesel-fired power plants, which have 8,900 megawatts (MW) capacity, into coal-fired plants and build 8,000 MW-capacity new coal-fired plants requires huge quantity of coal.

?For the 8,000 MW new coal-fired plants, at least 27 million tons of coal is needed. This total does not include the current total consumption, which is at present around 30 million tons,? Singgih said.

Looking at the future demand for coal, which will be massive for the usage at the power plants, in the coming five years, Singgih said, the government must revise its coal policy.

?In order to safeguard the rising national coal supply, the government must rethink about the policy on royalty payment in kind, which became in-cash after a long time in line with the Presidential Decree No. 75/1976,? Singgih said.

This revision, according to Singgih, is very important, given the government's share in every coal mining company, which will form as the national coal stock.

?Certainly, it has to take the royalty payments to be made to the regions into consideration,? he said.

Another step that has to be taken by the Ministry of Energy and Mineral Resources is that the calculation of royalty for low-calorie coal must be made clear to have certainty. Because in the future, the consumption of low calorie coal will increased tremendously.

?The calculation of royalty will become an incentive for the both new investors and bank syndicates. If the total royalty is known, they can calculate the investment value coal costs right from the beginning,? he said.

Singgih also called for establishment of special consortium involving small-scale coal suppliers to safeguard the national coal supply. (*)