Indonesia Coal Mining Company Set to Build Mine-Mouth Power Plants
Publicly listed coal miner PT Bukit Asam (PTBA) is set to build new mine-mouth power plants in a move to support the government’s ambitious plan of developing huge electricity projects.
PTBA corporate secretary Joko Pramono said his company would develop up to 4,400 megawatts (MW) mine-mouth power plants near its mining site in Sumatra.
“It will be the company’s participation in the government’s plan to develop 35,000 MW of power capacity,” Joko said.
The government is targeting to have an additional electricity capacity of 35,000 MW within five years, a programme that is expected to support growing energy demand along with economic growth in the country.
Joko added that the project gave the opportunity for his company to develop its power plant portfolio.
“Moreover, the issuance of the Energy and Mineral Resources Ministerial Regulation which allows direct purchase of electricity produced from mine-mouth plants will ease the process,” Joko said.
As part of its support for the realisation of the 35,000 MW programme, the Energy and Mineral Resources Ministry recently issued a regulation stating that state electricity firm PLN can directly purchase electricity produced by other players without having to seek approval from the energy and mineral resources minister as long as the price agreed to is within the range of prices stipulated in the regulation.
Out of the total 35,000 MW plan, as much as 10,000 MW will be developed by PLN and the remainder will be developed by private players.
Mine-mouth developments are also expected to support the ambitious electricity programme.
Moreover, mine-mouth power plants are also seen to give more advantages as they are developed near mining sites, meaning lower transportation costs to transfer the coal to buyers and that the electricity generated can directly be transmitted through a transmission line.
In the country, electricity transmission lines are currently managed by PLN.
The ministry’s mineral and coal development programme director, Sujatmiko, said that PLN was considering an option in which power plant developers could also develop transmission lines. When the transmission is finished, PLN would acquire it and connect it to its network.
“PLN will be happier if the developer also develops the transmission because the company is having difficulty developing the lines massively in a short period as the company has been burdened by its lending,” Sujatmiko said.
So far, PTBA has developed a number of mine-mouth power plants from which power is bought by PLN.
It finished the development of the 2×110 MW Banjarsari mine-mouth last year and is currently working on an interconnection line to connect the plant to PLN’s transmission station.