Wanted: Bright ideas to fire up power grid
John McBeth, Straits Times 17 Jul 08;
BACK in 2002, a banking friend became so alarmed by a story I wrote warning of a looming electricity crisis across Java that he went out and bought an industrial-sized US$8,500 (S$11,400) generator. It fills half of his driveway.
In the years since, power utility Perusahaan Listrik Negara's (PLN's) laudable dispatch centre has somehow managed to keep the lights on, most notably in Jakarta's more affluent districts like Pondok Indah, where he lives.
In fact, outages have been so rare there that he has had to use the generator on only six brief occasions.
But I've yet to hear the end of it, even though - as a veteran of Manila's power-less days of the early 1990s - I am thankful I, too, bought a generator, albeit a much smaller one.
Now, with the Indonesian capital facing an unprecedented fortnight of rolling blackouts, the banker may be about to get some real use out of his mini-power station - if not today, then at some point just down the road.
A long-planned gas supply interruption has forced two of the city's stations to switch to oil, with a resulting downgrade in their generating capacity. That, it seems, has been enough to tip the 18,500MW Java-Bali grid over the edge.
So far, energy-saving measures imposed on PLN's larger customers have staved off the worst of the latest crisis.
But for how long and at what cost?
'There isn't any more elasticity in the system,' said one power expert. 'There's simply nothing left.'
Nor is there a quick fix.
Coming barely five months after storms interrupted coal supplies to a string of major power plants, the blackouts - and the prospect of more in the future - represent what central bank governor Boediono warns is a real threat to Indonesia's growth ambitions.
But long before the current squeeze, industrial users were already protesting over unannounced power cuts, which have thrown production schedules into chaos and caused havoc with the electronics that run assembly lines.
Mr Boediono said at a foreign press lunch last week that he hopes the situation will stabilise by the middle of next year, but he added: 'If we can manage for the next year or two, we will be okay.'
Vice-President Jusuf Kalla has said much the same.
In fact, the only new power plant expected to come onstream in Java next year will be a small 300MW unit - part of the government's long-delayed 10,000MW coal-fired 'fast-track' programme, unveiled in 2006, which involves cut-price Chinese developers.
Most of the programme's 10 Java projects are either still at the planning phase or in the early stages of construction. A further 25 smaller stations are planned for the equally power- starved Sumatra and other main Indonesian islands.
Project managers claim that West Java's 600MW Labuan plant is 64 per cent complete. Yet PLN only last month announced plans to borrow US$288.5 million from Bank Negara Indonesia to help pay for it.
While the 990MW Indramayu plant on Java's north coast appears to be more advanced, with one of the three 330MW units due to be commissioned in September next year, a progress report seen by The Straits Times suggests that it is well behind schedule as well.
China's designs for the 300MW-capacity stations may be simple, but turbine costs have doubled since 2006 and the units require bigger boilers to burn lower-quality Indonesian coal. Also, soil stability problems at some locations have meant deeper foundations and more delays and higher expenses.
Hopelessly optimistic, PLN had originally wanted to bring all the stations on line by next year. But endemic institutional foot-dragging and unforeseen financial issues have put paid to that. Industry sources say some of the plants will not be ready for seven or eight years.
The same delays apply to a parallel 10,000MW private power project. Marubeni's 660MW Cirebon station on the north Java coast is still two years away from completion, while two other plants that will add 2,000MW to the grid have yet to break ground.
Apart from that, little has even reached the blueprint phase. Said a Western power executive: 'There's a lot of outside interest, but no one is willing to step up to the plate until they see some real go-forward on existing projects.'
Now that the fast track has become the slow track, it would have been better for PLN to opt for modern, large-scale plants, instead of building a string of cheaper stations with old technology and few pollution safeguards that will be more costly to run in the long term.
The biggest problem is the state-run utility's seeming inability to take a proactive stance. Officials are reluctant to make difficult decisions because of fears that any false step could come back to haunt them in the form of corruption allegations.
In a number of non-PLN cases, bureaucrats have been jailed for incurring losses, even though the prosecution acknowledged that they did not benefit personally from their transgressions.
Then there is the laborious government decision-making mechanism under which power projects must pass through layers of committees and two different ministries before they get the seal of approval.
PLN had hoped the twin programmes would allow it to retire old thermal plants, but with the economy growing at more than 6 per cent, that is looking increasingly unlikely.
In the meantime, its bottom line is being killed by the fact that oil still makes up 36 per cent of its energy mix, followed by coal (33 per cent), gas (18 per cent) and hydro (10 per cent), in a country rich in alternative sources of power generation.
Weighed down by crude oil prices that have risen 88 per cent over the past year, PLN says it will need 72.6 trillion rupiah (S$10.7 billion) in government subsidies next year, compared with the 60.2 trillion rupiah budgeted for this year.
Long-term planning has never been one of Indonesia's cultural strengths, but what puzzles many in the power industry is the government's failure to pay more urgent attention to the country's vast geothermal resources.
Currently, geothermal sources contribute only 800MW, or 3 per cent, to PLN's generating capacity when experts estimate there is a potential of more than 27,000MW - much of it on volcanic Java.
