The 10.000 MW Power Plant Under Threat Without DMO Of Coal

The success of a 10.000 MW power plant will be a pawn in a gambling by the SBY-JK government. Up to now, there are no barriers in the investment and space availability. The biggest threat comes from the uncertain supply of coal, since a bigger amount of the energy source is still dedicated for export market.

Sapto Triono Widiastoto, the Secretary of the Committee for the Acceleration of Electricity Development, The State Electricity Company (PLN), said that the project is schemed to reduce the dependency on oil as energy source. When the project was instigated in 2006, the government were relying on the abundance of low-grade coal. Nowadays, even the low-ranked coal are almost nowhere to find since they were already exported. That include those from companies who were at the outset had committed to supply the government with low-grade coal.

Even when the government had threatened the companies to pay a penalty for their inconstant supply of coal, the benefit earned from selling the commodity abroad is apparently still much bigger, that they would willingly pay the mere penalty. This, according to Sapto, could be hindered only through a Domestic Market Obligation (DMO) scheme of coal.

He further mentioned that the current national requirement for coal is about 40 million tons per year. The 35 million tons would be used for the generation of the 10.000 MW power plant, which owes 80% of the total energy sources to coal. For this year only, the government had committed to purchase high-rank coal at the market price of US$ 140.00 per ton. Sapto explained that his side would really hope that the government could implement the DMO scheme as soon as possible.

It is revealed that the government had planned that scheme be implemented as early as next month (September 2008), and that the Indonesian Coal Mining Association (APBI) has showed its support to the government’s plan.