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Blackout On Indonesia's Java Due To Coal Disruption

Date: 22-Feb-08
Country: INDONESIA
Author: Muklis Ali and Fitri Wulandari

The power crunch in Java and Bali, which started late on Wednesday, was the result of an electricity deficit of about 1,000 megawatts, an official at the state power monopoly said.

The outages are continuing into Thursday, even though the power deficit has been halved but the blackout could spread to other areas in Java if coal supplies do not pick up soon, said Mulyo Adji, PT Perusahaan Listrik Negara's (PLN) spokesman.

"Some power plants are running below capacity and some of them are going back to fuel oil. We have turned off supplies to several areas in Java as PLN has a power deficit," Adji said.

"Coal supplies to some power plants in Java have been stopped, as ships cannot go to ports because of big waves."

The coal disruptions add to problems faced by Indonesia's utility sector that is often hit by outages because of ageing power plant equipment and soaring demand due to its brisk economic growth. The last major blackout was in August 2005.

Officials say electricity demand is growing around 10 percent a year, outstripping power supply in a country of more than 220 million as investments in generating plants and transmission lines have lagged.

The coal shipment problems forced PLN to seek more oil products from PT Pertamina as a substitute, prompting the state oil firm to raise its imports for February.

Pertamina is seeking additional imports of 600,000 barrels of diesel and 370,000 barrels of fuel oil for February, its deputy director Hanung Budya said on Thursday.

"Because of additional demand from PLN after the coal supply problems at their power plants, Pertamina needs to supply more to PLN," Budya said, adding that the country's current national oil product stocks could support 18 days of consumption.

Pertamina processing director Suroso Atmomartoyo said operations of its refineries in Balongan and Cilacap on Java Island had not been affected and both were operating with their own power generators.

Energy Minister Purnomo Yusgiantoro said the government wanted PLN to keep 30-days of coal stocks, but there was no plan to ban coal exports.

The disruptions in Indonesia, the world's largest thermal coal exporter, came as Asian prices have spiked by more than half over the past month after China slapped a two-month ban on exports due to a power crisis, heavy rain shut down Australian mines and port problems disrupted South African shipments.

Indonesia's strong power demand is forcing Asia-Pacific's only OPEC member to tap other energy sources such as coal and natural gas in the face of rising crude prices and dwindling domestic oil reserves.

PLN has a monopoly over power supply in Indonesia and has 24,000 MW of generating capacity, but daily output is far below capacity. Some 30 percent of the plants use oil products such as diesel and fuel oil.

MINING COMPANIES UNAFFECTED

Despite the power shortage, operations of key miners in Java were unaffected as mining firms have their own power sources, while the impact on the capital, Jakarta, was minor and businesses had not been hit.

Mining activity at the Pongkor gold mine in West Java and smelting in precious metal refinery PT Logam Mulia in Jakarta -- both operated by state miner PT Aneka Tambang -- was normal, Bimo Budi Satriyo, Antam's corporate secretary, said.

Operations at Indonesian copper smelter PT Smelting in Gresik, East Java were also unaffected, as it has its own gas-fired power plant, said Dukut Imam Widodo, PT Smelting's general affairs manager.

Indonesia plans to step up power generation capacity to meet soaring demand by building new coal-fired and natural gas plants, but the projects need huge investments.

Other than ageing plants, the power sector has also been hit by high costs and low funds, as tariffs are highly subsidised and still among the lowest in the world.

Indonesia has not raised electricity tariffs for several years due to opposition from p

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