Monday, August 14, 2006

Sumatra power cuts: The Big Irony

Sumatra Island is home to vast energy resources. Natural gas, crude oil, coal, geothermal, tidal energy, you name it. So it's a big irony that the island has been suffered regular power cuts in many years. What's wrong?

Let's start with Aceh in the northern tip of the island. It sits over depleting natural gas, after three decades of massive extraction at ExxonMobil's gas fields to produce liquefied natural gas (LNG) for power generating companies in North East Asia, mainly Japan. Two gas-fed ammonia and urea plants (AAF is being liquidated and one of PIM's plants) have been dormant for many years on unavailability of natural gas supply.
Down to North Sumatra, there are some hydropower plants, but decreasing water debit had cost lower generating capacity for almost a decade as the surrounding natural forests have been destroyed significantly to supply the pulp plants nearby.
The area's electricity demand is somewhere between 1,300-1,500 MW, with Belawan gas-fired as the largest supplier (1,036 MW) and some small hydropower plants. Asahan Hydropower has 600 MW capacity, but mainly absorbed by Inalum (aluminium smelter) and suffered significant drop of water level. Some projects, including Bukaka's Asahan hydropower and Medco's Sarulla will take few years to come to light.
In West Sumatra, almost all hydropower plants have been suffered major drop of water
level and underdeveloped geothermal resources.
At the heart of the island, pipelines have transported natural gas to Singapore. Two pipeline projects are underway to transport more natural gas to Java island. Riau in central Sumatra is home to the largest crude oil production site which contributes more than 40% of the national output. Yet, Pekanbaru, the capital city of Riau recorded power cuts many times a day.
Down to South Sumatra is the home of natural gas, oil and coal production centers. But Palembang and its neighbour city Bandar Lampung have experienced similar power cuts with Pekanbaru.
On top of these, Sumatra would be the future source of what we call green energy or biofuel as most of crude palm oil (CPO) plantations are located in the island. The problem, we give so little attention to boost power generating capacities in this island. Our focus is clearly too much on Java island, an area heavily rely on Sumatra for energy sources and at the same time we neglect the island's demand for energy. As a result, Sumatra recorded power cuts in 78 days last year. It's decreased from 349 days in 2002. But it's still too often, isn't it?
To add people's missery, there are 10 power plants are inactive, mainly gas-fired, and most hydropower plants only operates at 60% of their installed capacity.
This week, Medco starts to supply additional 55 MW gas-fired capacity in Batam Island, but that would not be enough. Efforts to build coal-fired plants in the island have been slow on poor government responds. Well, how could we promote redistribution of economic growth and wealth if we keep neglecting this island?

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