PLN to operate mine-mouth plants in S. Kalimantan

State-run electricity utility PT PLN announced on Monday that Indonesia's third mine-mouth coal-fired power plant located in Asam-Asam, South Kalimantan, with a capacity of 2x265 megawatts (MW) would start operation in the fourth quarter of this year.

?The construction of mine-mouth power plants aims to provide electricity to the mining sites? surrounding areas. The current need isn?t really high,? he told reporters after a discussion session held by the Bimasena Mines and Energy Society in Jakarta

Indonesia currently has two mine-mouth power plants in Ombilin; West Sumatra, and Bukit Asam. South Sumatra, each having a capacity of 2x100 MW. The two plants have been in operation for around 15 and 10 years, respectively.

Indonesia, the world?s largest exporter of coal and liquefied natural gas (LNG), is. pushing efforts to meet energy need of around 79 million people---a third of its total 237-million population---who have no access to electricity as infrastructure bottlenecks remain a big hurdle to Indonesia ?s rapidly growing economy.

PLN has plans to build other mine-mouth power plants in Sumatra with combined capacity of 7,300 MW by 2020, in an attempt to optimize coal usage and accelerate economic development in the producing regions.

In June, the power company will begin the tender process for three mine-mouth power plants: South Sumatra 9 (2x600 MW), South Sumatra 10 (1x600 MW) and Jambi (2x400 MW). The three plants are projected to go on-stream in 2016 with a total investment of Rp 26 trillion.

?We expect to announce the winners of the tenders by the end of the year, ?Pamudji was quoted by The Jakarta Post as saying.

The three power plants will consume 18.9 million tons of coal per year comprising 8.7 million tons for South Sumatra 9, 4.38 million tons for South Sumatra 10, and 5.84 million tons at Jambi, according to PLN?s calculations.

This year, PLN has secured 67 million tons of contracted coal supply for the company and for independent power producers (IPPs), higher than the real consumption estimate of around 54 million tons.

The consumption estimate comprises 25.6 million tons of coal with a calorific value of 5,100 kilocalories per kilogram (kcal/kg), 22.3 million tons at 4,200 kcal/kg and 6.2 million tons at 6,100 kcal/kg.

?The contract must he higher than the real demand to make it more secure,? said Helmi Najamuddin, PLN division head for coal. PLN and IPPs will only pay for coal which is consumed, he added, citing an average price of Rp 725,000 per ton pegged for 2012.

?We have allocated Rp 35 trillion to purchase coal this year, "Helmi said. (*)