Power to be the main driver of coal demand growth in Indonesia: Adaro

Coal demand in Indonesia will grow at a modest rate until 2008 but it will experience a significant jump from 2009 to 2012 thanks to the commencement of several new power projects, a senior executive of major coal producer PT Adaro Indonesia said on Monday.

?The future growth of domestic coal demand is going to be largely dependent on the development of new coal-fired power stations,? company?s marketing manager Alistair Grant said during the CoalTrans annual conference in Nusa Dua, Bali.

Grant said though insignificant, domestic coal demand would grow from the period of 2005-2008 thanks to the operation of several new power plants, that is the Tanjung Jati B power plant in Central Java, the Cilacap power plant, also in Central Java and the Tanjung Kasam power plant in Batam.

Tanjung Jati B, which is expected to start operation late this year, is expected to increase demand to 2 million tons annually in 2006, from 200,000 tons this year. Demand from Cilacap and Tanjung Kasum will increase to 2 million tons and 300,000 tons annually in 2006.

Demands from the power industry would increase 31.1 million tons in 2006, from 27.2 million tons this year and 24.3 million tons in 2004. The demand will continue to grow to 33 million tons in 2007 and 33.5 million tons in 2008, according to Grant.

Demands from cement producers, another main buyers of coal, will be relatively flat. The demand will reach 7 million tons in 2008, from 6 million tons last year. Coal demand from other industries, including pulp and paper industries, will also be marginally higher at 6.8 million tons in 2008, from 5.6 million tons in 2004.

The increase in the coal demand from cement and other industries over the next three years was merely because the increase in the capacity of the existing plants, rather than the commencement of new plants, Grant said.

In total, domestic coal demand will reach 47.3 million tons in 2008, up from 35.9 million tons in 2004, according to Grant.

From 2009 through 2012, domestic coal demand will start to jump thanks to the commencement of several coal-fired power plants, according to Grant.

There would be an additional coal power generation capacity of 4,700 megawatt (MW) during the period, which needs 18.1 million tons of coal, he said.

He noted however that Indonesia would not face a shortage of coal supplies as a result of the jump in the coal demand, as in 2012 Indonesia?s coal output is predicted to top 200 million tons per year. (Alex)

No.	Power Plant	Location	Capacity (MW)	Possibly Startup	Coal requirement (million tons)
1.	Tanjung Jati A	Central Java	1320	2009	4.5
2.	Parit Baru	West Kalimantan	110	2009	0.4
3.	Mulut Tambang	South Kalimantan	110	2009	0.4
4.	Amurang	North Sulawesi	50	2009	0.2
5.	Serang	Banten	450	2010	1.7
6.	Paiton 3 & 4	East Java	800	2010	3.0
7.	Sibolga	North Sumatra	200	2010	0.7
8.	Makassar	South Sulawesi	130	2010	0.5
9.	Tarahan	Lampung	200	2010	0.7
10.	Tanjung Jati C	Central Java	1320	2011	4.5
11.	Cilegon	Banten	400	2012	1.5