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Adaro Power

Making Progress Downstream


The government’s aggressive efforts to develop different parts of Indonesia to pursue economic equality will increase household consumption and economic activities. Together with population, this will boost demand for electricity. For AEI, this is opportunity to both contribute to the country’s development and to generate a stable income from a business that can provide captive market for its coal, because coal’s reliability and affordability will keep it as a vital component of Indonesia’s energy mix. AEI’s power business pillar led by PT Adaro Power (AP) has been working on several strategic power projects and is getting ready to strengthen its foothold in the country’s power generation sector.

In the most recent Electricity Supply Business Plan (Rencana Usaha Penyediaan Tenaga Listrik or RUPTL), PT Perusahaan Listrik Negara (PLN) projects an average annual power demand growth rate of 4.9% in Indonesia in 2021 – 2030. While still lower than the projected power demand growth rate of the previous RUPTL, this still translates to planned additional capacity of 40.6 GW, whereby 51.6% or 20.9 GW would be derived from renewables, and 64.8% from the planned 20.9 GW of renewables will come from Independent Power Producers, making this RUPTL the “greenest RUPTL” to date.

Understanding the RUPTL has enabled AP to plan its growth opportunities to imitate Indonesia’s energy mix. Because Indonesia intends to add more renewable power capacity to reach the targeted Net Zero Emission in 2060, AP, together with potential partners, has been actively exploring opportunities to expand power generation options from other energy sources, such as gas and renewables, to support the country in transitioning into greener energy generation. AP believes that Indonesia’s transformation transition to new and renewable energy as well as acceleration of green technology-based economy will become a positively crucial change in the country’s economy.

With COVID-19 pandemic in its second year, AP had to ensure its operations would run without any pandemic related disturbances to keep to the scheduled commencement of its new facilities. Therefore, in conducting operations, the company applied strict health protocols enforced by both the government and its parent company AEI. Furthermore, the company ensures that its employees, employees’ families and business partners, including those of its subsidiaries, both at the site office and Jakarta office are vaccinated, as seen in the increasing vaccination rate.

PT Makmur Sejahtera Wisesa (MSW)

MSW marked the Adaro Group’s first downstream step into the power sector. It built, owns, and operates AEI’s first power project, a 2x30 MW power plant in Tabalong, South Kalimantan, which powers Adaro Indonesia’s operations. MSW power plant uses circulating fluidized bed (CFB) technology, suitable for the combustion of higher moisture coals like AI’s E4000 as it reduces nitrous oxide emissions due to the low combustion temperature and uses electrostatic precipitators to eliminate ash emissions.

In 2021, MSW continued the electrification program for Adaro Indonesia mine, increasing the number of electric pumps to 52. In addition, MSW produced 71,164 MWH of electricity and reached actual availability factor of 88.3%.

PT Tanjung Power Indonesia (TPI)

PT Tanjung Power Indonesia is a consortium company owned by AP (65%) and PT East-West Power Indonesia (35%), a subsidiary of Korea East-West Power Co Ltd., to build and operate a 2x100 MW coal-fired power plant in the Tabalong regency, South Kalimantan, and to sell electricity to PLN under a Power Purchase Agreement (PPA) for a period of 25 years from the COD.

In its second fully operational year, TPI achieved an average actual availability factor of 92.88% against the target of 80%, and produced 1,383,483 MWH of electricity for PLN Kalimantan. Throughout the PPA, the company will continue to provide electricity to PLN for South Kalimantan, Central Kalimantan and East Kalimantan regions.

 

PT Bhimasena Power Indonesia (BPI)

PT Adaro Power, together with Electric Power Development Co. Ltd. (J-Power) and Itochu Corporation, established PT Bhimasena Power Indonesia in 2011 to develop a 2x1,000 MW coal-fired power plant in the Batang regency of Central Java. Upon completion, this power plant will be one of the first and largest in Southeast Asia to use ultra-supercritical (USC) boiler technology.

BPI reached financial close for this project in June 2016 with the total project cost estimated to be US$4.2 billion, and received a commitment for project funding of approximately US$3.4 billion from the Japan Bank for International Cooperation and several commercial financial institutions. BPI will provide electricity to PLN for 25 years based on a Power Purchase Agreement (PPA), the first actualized public-private partnership project in Indonesia under the guarantee of the Government of the Republic of Indonesia together with the Indonesia Infrastructure Guarantee Fund (IIGF), and part of the Masterplan for Acceleration and Expansion of Indonesian Economic Development.

As at the end of 2021, the construction progress at PT Bhimasena Power Indonesia’s 2x1,000 MW power plant in Batang, Central Java has reached 96.9%.

Renewable projects

Because Indonesia starts transitioning to new and renewable energy generation, AP has been actively looking into renewable power projects in order to have a balanced energy mix in its portfolio and reduce its carbon footprint. In the past year, AP continues to study various sources of renewable power such as biomass, wind power, hydro power and waste to energy, as well as successfully expanded the capacity of its Solar PV at Kelanis Dedicated Coal Terminal to 598 kWp, which reached COD on 27 December 2021. This solar PV is estimated to have the capacity to produce 749 MWh per year, which in turn will reduce Adaro Indonesia’s consumption of diesel fuel by around 200 thousand liter/year or around USD $130 thousand/year, not to mention carbon emission reduction by around 500 tonnes/year.

The success of the Kelanis Solar PV has further encouraged AP to continue working to develop renewable projects both in order to meet the electricity needs of Adaro Group’s operational activities, as well as to meet PLN’s electricity generation target via IPP and to reduce consumption of fuel and CO2 emission.

Last modified on June 13, 2022, 11:02 am | 134628