Govt to obligate coal contractors to supply domestic power plants

The government is planning to issue a decree to obligate coal contractors to prioritize the local power plants over foreign buyers beginning next year.

Director general of geology and mineral resources at the ministry of energy and mineral resources Wimpy S. Tjetjep told Petromindo.Com last week that the policy was aimed to ensure local power plants have enough coal for their operation.

?All coal companies, which produce coal of the quality needed by Suralaya and Paiton, will be obliged to first supply Suralaya and Paiton before exporting their coal,? Wimpy said, referring to the giant coal-fired power plant complexes located respectively in Suralaya, West Java and Paiton, Probolinggo, East Java.

?The policy will be stipulated either in a presidential decree or a ministerial decree,? Wimpy added.

The Suralaya power plant, which has a total power generating capacity of 3,400 megawatt (MW), is owned by PT Indonesia Power, a subsidiary of state electricity company PT PLN.

The Paiton power plant complex is home to a number of power generating units owned by Indonesia Power, PT Paiton Energy Co, and PT Jawa Power.

Indonesia Power has two power generating units with a combined capacity of 800 MW in the complex, while Paiton Energy has two generating power units with a combined capacity of 1,230 MW and Jawa Power produces 1,220 MW from two power generating units.

Paiton Energy is owned by a joint venture of American firm Mission Energy, Japanese firm Mitsui and local firm PT Batu Hitam Perkasa, while Jawa Power belongs to a joint venture of German firm Siemens AG and local firm PT Bumipertiwi Tatapradipta.

The Suralaya power plant is mostly supplied with coal by state-owned coal company PT Bukit Asam, while the Paiton power plants are supplied by PT Adaro Indonesia.

Wimpy made the statement following a coal crisis, which was recently close to forcing the Suralaya power plant to stop operation.

Bukit Asam and other coal companies were reluctant to sell their products to Suralaya because Indonesia Power quoted too low prices for their coals. The company thus preferred to export their products.

The Suralaya power plant came back to normal operation recently after the ministry ordered several coal companies to sell the government?s share in their coal output to the power plants. (Alex/Godang)