The Jakarta Post reported that Indonesian government plans to build new power plants in Batam in Riau Islands, with total capacity of 4,000 MW. Most of the electricity would be exported to Singapore.
Mr Widjajono Partowidagdo energy and mineral resources deputy minister said that the plan is aimed at reducing gas exports to Singapore, which have caused difficulties for local industries in fulfilling their gas requirements.
He added that "The idea is that we build 4,000 MW power plants in Batam. As many as 3,000 MW of electricity produced by the power plants will be distributed to Singapore, while the remaining 1,000 MW can be used for Batam so that we do not need to send more gas to Singapore."
He continued that the power plants would most likely utilize coal as the primary energy source because Indonesia had abundant reserves with limited domestic absorption.
He said that the gas that had previously been allocated for generating electricity in Singapore would then be utilized to fulfill soaring demand from industries in Java. He added that "We hope that the power sales agreement with Singapore can be signed in 2012 or 2013, so before 2014 we can start the construction of the power plants. We will build the power plants gradually with the first to be set up with a total capacity of 1,000 MW. Not all gas for Singapore will be stopped. Only the gas that is used for electricity will be shifted to Java, while for industries, we will still deliver, especially if we are already tied by contracts."
Regarding sources for funding, the deputy minister believed that as long as the two countries agreed on power sales, many private investors would line up to build the planned power plants. He said the government may not contribute because it had very limited budget.
He added that "The distance between Batam and Singapore is only 16 kilometers. If we can find the money, the project is absolutely possible."
Newly appointed president director of state electricity utility PLN Mr Nur Pamudji said that his company fully supported the government’s plan on the 4,000 MW power plants.
He said PLN would agree on whether the power from the power plants would be exported or utilized locally by islands nearby Batam. He added that "We are actually already planning to connect an electricity network between Batam and Bintan to become a larger grid system."
Batam currently has a total power capacity of 320 MW with the peak burden of only 265 MW. PLN currently operates 5,233 power plants across the country with a total capacity of 24,960 MW, of which 22% or 1,151 plants are fueled by natural gas.
PLN is set to receive around 800 million standard cubic feet per day of gas 2011, far below its demand of 1,800 million standard cubic feet per day. Mr Pamudji said next year the firm would receive an additional 250 million standard cubic feet per day so that the total allocation would be 1,050 million standard cubic feet per day.
In order to seek further supply, the company had previously studied the possibility of importing liquefied natural gas from Iran, Australia and Papua New Guinea. It said, however, that imports would only be a last resort if supplies from domestic producers could not be sourced.
(Sourced from www.thejakartapost.com)
