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Indonesian power plant construction underway

Semen Indonesia has announced that work on a new 30.6 Megawatt (MW) power plant has begun, as the country aims to reduce electricity costs.

The state-run cement producer is building the power plant at its cement factory in Tuban, East Java, at a cost of US $52.95 million; an investment that will see the plant make use of the heat generated from the factory.

The current timetable for construction of the waste heat recovery power generator (WHRPG) is scheduled to be 26 months, with the date of operation pencilled in for the second half of 2016.

New direction

It follows the signing of a memorandum of understanding last year between Semen Indonesia and Japan-based JFE Engineering Corporation for the construction of the WHRPG, and comes after Semen applied similar technology at its Indarung facility in Padang, West Sumatra, but on a smaller scale.

The Indarung power plant, which began operations in 2011, has a capacity of 8.5 MW, but the new facility will take things to the next level, according to Semen Indonesia president director Dwi Soetjipto, who said it will use waste heat from gas generated by cement production to fuel its operation.

He elaborated: "This will be the first project in Indonesia where waste heat in the whole area is utilised to supply the power plant."

Wide-ranging effects

As well as the cost savings, a key benefit of the new power supply will be an increase in production at the facility, significantly boosting the amount of cement that can be produced.

Such an increase will directly filter to members of the construction industry, who continue to stimulate Indonesia's construction industry through the building of new developments, while smaller developers could also see their overheads decrease as Semen Indonesia is able to pass on savings.

Future-proofing

Once the power plant is completed, Mr Soetjipto said Semen Indonesia will be able to supply about one third of the company’s energy needs at the Tuban compound, saving $13 million in electricity costs every year.

Currently its four existing factories in Tuban require as much as 140 MW from state electricity company PT PLN, with electricity costs remaining the biggest pressure on Semen Indonesia’s net profit  - something compounded by a projected rise in electricity tariffs in 2014.

In a bid to suppress electricity costs, many large Indonesian companies have begun to build power plants to combat rising expenses following increasing production and tariffs.

Earlier this year, Semen Indonesia began operation at the Tonasa V facility in Pangkep, South Sulawesi, which is equipped with a 2x35-MW coal-fired power plant to support its operations, and is also considering building a 100-MW coal-fired power plant to supply its facilities in Padang, in a further indication of major companies' intentions to shape their own destinies in the years ahead.


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