Coal reserves feared not enough to meet future demand from power plants
Tuesday, March 8 2016 - 01:08 AM WIB
The Indonesia Coal Mining Association (ICMA) feared that the country?s current coal reserves will not be enough to meet future demand from new coal-fired power plants currently being developed.
A total of 20,000 MW of coal-fired power plants will be developed over the next five years. This is part of the 35,000 MW targeted by the government to be developed until 2019.
ICMA Chairman Pandju Sjahrir said on Monday that the country?s coal reserves per end 2015 wre estimated at 7.3 billion-8.3 billion tons, much lower than the 32.3 billion (2014) estimate made by the Ministry of Energy and Mineral Resources.
Pandu said that based on the latest joint survey with PricewaterHouseCoopers (PwC), there?s indication that the country?s coal reserves have been declining at an annual rate of 29-40 percent, which means that the reserves will be depeleted in 2033-2036.
Meanwhile, he added, the liftime of the new power plants is between 25-30 years since the start of the commercial operation. Indonesia may eventually have to import coal from Australia to meet demand from power plants in the future if no new reserves are found.
Pandu explained that the current drop in coal price has dicouraged miners to carry out exploration activities to find new reserves. The coal downturn has also prompted the miners to cut down stripping ratio, making future coal production in areas with high stripping no longer economical.
Pandu said that the government needs to provide incentives to encourage new exploration activities such as by changing the current pricing system. He pointed that the government coal reference price should no longer include international indices.
Editing by Reiner Simanjuntak