August 27, 2009 / 6:57 AM / 10 years ago

Indonesia's PLN buys 1.9 mln T/year coal for new power plant

JAKARTA, Aug 27 (Reuters) - Indonesia’s state electricity firm PT Perusahaan Listrik Negara (PLN) has secured 1.9 million tonnes of sub-bituminous coal per year for its new coal-fired power plant in Central Java, an official said on Thursday.

PT Arutmin, a unit of Indonesia’s largest coal producer PT Bumi Resources Tbk (BUMI.JK), and PT Titan Mining Energy will each supply 950,000 tonnes of coal per year to Rembang power plant, which has generating capacity of 630 megawatts, Pudji Widodo, PLN’s head of coal energy unit said.

“First coal delivery started this week. They will supply the coal for 20 years,” Widodo said.

PLN bought sub-bituminous coal of 4,200 kcal/kg gross as-received (GAR) at 389,000 rupiah ($38.51) per tonne on cost, insurance, and freight (CIF) basis, he said.

Rembang power plant is one of 35 new coal-fired power plants being built under the government’s crash programme to add 10,000-megawatt of generating capacity and ease chronic power shortages.

Three new coal-fired power plants with total generating capacity of 1,960 MW are expected to start commercial operations later this year, including Rembang, which is expected to start in October.

PLN needs a total of 31.9 million tonnes of coal a year for the new coal-fired power plants and has secured 15.3 million tonnes of coal. It was also in the process of signing contracts for a further 13.2 million tonnes and is tendering for 3.26 million tonnes of sub-bituminous coal supply.

The government is currently drafting for the second programme which will add another 10,000 MW capacity from coal and renewable energy.

PLN has a monopoly in Indonesia and operates 25,000 megawatts of capacity, but most of its plants are old and output is far below capacity. PLN is under pressure to ramp up capacity and modernise its plants. It has switched to natural gas and coal to meet demand and cut consumption of crude oil. ($1=10100 Rupiah) (Reporting by Fitri Wulandari, editing by Sara Webb)

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