Selanjutnya
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF FINLAND
CONCERNING
THE PEAT UTILIZATION PROJECT
IN CENTRAL KALIMANTAN IN 1985-1987
Whereas, in the discussions held during the mutual visits of
the Finnish and Indonesian delegations in 1983 and 1984
the
Finnish Assistance to Indonesia in assessing the feasibility
of peat and biomass as a source of energy for rural electrification has been tentatively agreed upon; and
Whereas, after the identification mission carried out
in
May 1984, the two Governments have mutually decided to continue their cooperation in this field;
Now therefore, the Government of Indonesia and the Government
of Finland have agreed as follows;
ARTICLE
THE
I
PROJECT
1. The Peat Utilization Project, Phase I
(hereinafter referred
to as the Project) shall be implemented in Bereng
Bengkel,
Central Kalimantan during 1985-1987, comprises the following
activities :
1.1. Training, both in Finland and at site, of the Indonesian
personnel to enable them to be in charge of the
peat
production after the end of the Project.
. .. ;; ...
2
1.2. Commencement of the peat production, including preparation of a survey of peat resources, planning as
well as preparation of production fields.
1.3. Preparation of a feasibility study in order to assess
the economic and technical feasibility of an electricity generating plant using peat and/or wood waste as
fuel.
1.4. Supplies of the necessary production and transport
machinery and equipment.
2. The Project shall be implemented in accordance with the
Plan of Operations attached hereto as Annex 1.
ARTICLE
II
EXECUTIVE AUTHORITIES
1. The Government of Finland, designates
the
Ministry for
Foreign Affairs as the Executive Authority responsible for
the implementation of its obligation under this Memorandum
of Understanding.
The Ministryfor Foreign Affairs of Finland, represented in
Indonesia
by the Embassy of Finland.
2. The Government of the Republic of Indonesia
designates
Ministry of Mines and Energy as the Executive Authority
responsible for the implementation of its obligation under
this Memorandum of Understanding.
ARTICLE
III
CONTRIBUTION OF THE GOVERNMENT OF FINLAND
1. The Government of Finland shall contribute funds
towards
the costs of the Project, on a grant basis, up to maximum
of five million five hundred thousand Finnish Marks
(FIM. 5.500.000).
. .. // ...
3
Out of this amount two million five hundred thousand
Finnish Marks
(FIM. 2.500.000) are available in
the
calender year 1985, and subject to parliamentary approval
in Finland two million five hundred thousand Finnish Marks
(FIM. 2.500.000) in 1986 and five hundred thousand Finnish
Marks
(FIM. 500.000) in 1987.
2. For the implementation of the Project, the Ministry
for
Foreign Affairs of Finland shall conclude a contract with
the Finnish implementing agency for the Project, J-P Energy
Oy
(hereinafter referred to as the Finnish Implementing
Agency).
3. The Finnish contribution referred to in paragraph 1 above
shall be used to compensate the costs accrued to the
F1nn1sh Impiementing Agency from carrying out the Project
as well as the costs of the monitoring and evaluation
of
the Project in the framework of the Project Budget attached
hereto as Annex 3.
ARTICLE
IV
CONTRIBUTION OF THE GOVERNMENT OF INDONESIA
1. The Government of Indonesia will take the necessary
measures to ensure the smooth and expedient implementation
of the Project.
2. The Government of Indonesia shall be responsible for its
obligations as set forth in the Plan of Operations and in
the list of equipment to be provided by the Government of
Indonesia, attached hereto as Annexes 1 and 4.
3. All financial and any other obligations arising from the
implementation of the Project over and above the Finnish
contribution referred to in Article III above shall
be
undertaken by the Government of Indonesia.
. .. I I . ..
4
4. Implementing Agency in Indonesia for this Project is the
Directorate of Coal, Directorate General of Mines.
ARTICLE
V
STATUS OF THE EXPATRIATE PERSONNEL
AND THE IMPLEMENTING AGENCY
1. The Government of Indonesia in accordance with the
prevailing laws and regulations, shall :
1.1. exempt the approved expatriate personnel and the
Implementing Agency from income tax or any direct
taxes on Project salaries and allowances.
1.2. grant exemption from taxes, customs duties and other
charges on import of all materials and equipment
imported into Indonesia for the Project under this
Memorandum of Understanding as well as personnel
effects of the approved expatriate personnel.
2. In accordance with the prevailing laws and regulations,
the Government of Indonesia shall impose no currency or
foreign exchange restrictions on funds introduced
into
Indonesia for the use of the Project or the approved expatriate personnel, and allow the exchange and exportation
of such funds.
3. In respect of the approved expatriate personnel working
in Indonesia under this Memorandum of Understanding the
Government of Indonesia shall
3.1. grant free of charge and without undue delay multiple
entry and exit visas and other necessary permits and
authorizations to the approved expatriate
personnel
and their families;
... I I . ..
5
3.2. in the event of arrest or detention for any reason
whatsoever of the members of the approved expatriate
personnel or their families, or of criminal proceedings
being instituted against them, immediately notify the
Embassy of Finland;
3.3. hold the approved expatriate personnel harmless
against any liability in case of damages caused by
the expatriate personnel in the course of their
duties in Indonesia unless such damage has arisen
from the gross negligence or wilful misconduct or
criminal act of the Finnish personnel;
3.4. in the event of an International crisis affecting
the safety of foreign nationals in Indonesia accord
the same repatriation facilities to the prevailing
regulations.
ARTICLE
GENERAL
VI
PROVISIONS
1. The Executive Auhtorities shall ensure that the resources
made available for the Project are exclusively utilized
for the needs of the Project in a manner enabling the implementation of the Project in the most effective way.
2. The material and equipment provided by the Government of
Finland under this Memorandum of Understanding shall
available for the unrestricted use of the Project
remain the property of the Government of Finland
and
during
the Project implementation, and shall be tran sferred
the Government of Indonesia upon the completion
be
of
to
the
Project.
. .. I I . ..
6
3. The Government of Indonesia shall ensure that the activities
under this Memorandum
of
Understanding
as well
as
the
approved personnel working in Indonesia for the Project and
their families are accorded a treatment of a manner no less
favourable than that accorded to activities of development
cooperation with any other country or development cooperation
personnel assigned to Indonesia by any other country.
4. The Executive Authorities shall act in cooperation in the
monitoring and evaluation of the Project.
5. All information and data received by a Party from the
other Party for the implementation of the Project shall be
confidential if so indicated by the other Party or if it
is such by its nature.
6. Any dispute arising out from the interpretation of application of this Memorandum of Understanding shall be settled
amicably by consultation or negotiation between the
two
Governments.
7. This Memorandum of Understanding may be amended or
modified by mutual negotiations between the two Governments;
such amendment or modification shall be made in writing.
ARTICLE
VII
ENTRY INTO FORCE; VALIDITY AND TERMINATION
1. This Memorandum of Understanding shall enter into force
on the date of signature by both Parties and remain in
force until the completion of the Project.
. .. ;; ...
7
2. This Memorandum of Understanding may be terminated by
written notification by either party to the other and
such a termination shall have effect at the expiration
of three months from the date of such notification.
Done in Jakarta on this
tenth
day of
1986 in duplicate in the English language.
February
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF
THE REPUBLIC OF INDONESIA
THE REPUBLIC OF FINLAND
ｾｒ＠
Signed
NURHADI
Signed
ERIK J¢INRICHS
·.
..
ANNEX 1.
'
P E A T
U T I L I Z A T I 0 N
P R 0 J E C T
. PLAN OF OPERATIONS FOR 1985-1987
)
)
1.
I
SUMMARY
The economy of Indonesia depends today heavily on petroleum products;
exports of oil is the main source of revenue and foreign exchange of
Indonesia. In addition, oil accounts for some 80 % of the total energy
production in Indonesia.
Indonesia is accordingly seeking to optimiz
the use of her abundant natural resources in order to diversify the
Indonesian energy base. Another object for developing energy resources
outside the island of Java, where two thirds of the 140 million of
Indonesia's
inhabitants live,
is combined with
the Government's
transmigration . program which seek to overcome
the imbalance of
settlement existing in Indonesia.
)
This peat project is one step in the developing of Indonesia's energy
base and the Bereng Bengkel area near Palangkaraya in Central Kalimantan
has been selected as the Project site since the electricity consumption
·in this area allows the utilization of the peat resources in the near
future.
The Project has been divided into two phases.
Phase I consisting of
peat
production
development,
training
of
Indonesian
personnel,
feasibility study for Phase II and reporting Phase II is preliminarily
allocated to consist of construction and demonstration of peat utilizing
power plant.
Phase I will last from early Autumn 1985 til early 1987.
Decisions of Phase II will be made, partly based on results and findings
of Phase I.
Phase I will be carried out by JP-Energy Oy, Helsinki, Finland.
The
work will be carried both in Finland and Indonesia, where two peat
production specialists will stay for approximately one ( 1) year.
The
work will be carried out under the supervision of ｆｉｾｄａ＠
and in close
cooperation with the Indonesian party.
)
2.
II
BACKGROUND
1 •1
Energy Sector
Indonesia has Jarge conventional energy resources in the form of oil,
natural gas, coal, hydro and geothermal.
It has also plenty of new and
renewable energy resource such as peat and wood wastes.
However, the
availability of indigenous oil has resulted in a petroleum - dependent
energy sector as can be seen from t he table 1.
The table · shows the
development of commercial energy mix during the five-year development
plans (Repelita).
Table 1.
'
Commercial energy supply mix at the ends of Repelita II, III
and IV (10 6 BOE)
)
Repelita II
Repel ita III
Repelita IV
1978/79
1983/84
1988/89
Natural gas
24.5 (15 . 3 %)
3 7 . 2 (1 7 . 7 %)
55.2 (18.9 %)
Coal
0.65 (0.4 %)
1.1 (0.5 7.)
28.2 ( 9. 7 %)
Hydropower
3.85 (2.4 %)
7.76 (3. 7 %)
24.3 ( 8. 3 %)
0.37 (0.2
l. 96 (0. 7 %)
Energy source
Geo thermal
7.)
Oil
131. 0 ( 81. 9 i,;)
163.7 (77.9 %)
182.4 (62.4 %)
Total
160.0 (100.0 7.)
210.1 (100.0 %)
292.2 (100:0 7.)
Rapid increase of energy demand, global_ economic reces sion and decrease
in oil export have, however, resulted in the need for diversifying the
energy sec tor of Indonesia.
Especially this means the substitution of
oil consumption with other domestic energy sources, which would leave to
the larger share of oil products for export.
This targe t can be seen
a l so from the estime.ted supp l y mix at the end of ongoing Rep eli ta IV
(table 1) where t he share of oil is 62.4 per cent instead of 78 per cent
of present situation.
The main energy sources substitu tin g oil are natural gas, coal and
hydropower.
At the local leve 1 a nd rernot e areas also peat and wood
wastes can have an important role.
---
1.2
Power Sector
In the power sector, the demand for electricity is increasing faster,
than the demand for total energy resulting in the annual growth rate of
about 20 per cent. About 70 per cent of electricity is generated from
the plants owned by PLN (state enterprise for electricity). The main
PLN generation is locating in Java (about 75 per cent) where there
exists also transmission grid. Outside Java the production is based
mainly on diesel plants. There are also plenty of captive diesel plants
owned by industry.
Table 2 shows
It shows that
of hydropower
is decreasing
the power expansion plan for Repelita IV (ending 1988/89).
the total capacity is increasing very rapidly. The shares
and coal-fired plants are increasing and the share of oil
from 86 to 56 per cent.
In regions outside Java the consumption is increasing even more rapidly
than in Java. Table 3 shows the estimated development in PLN regions
III-VI which are interesting when the utilization of peat and wood
wastes are considered. Regions IV are on Sumatra including among others
the provinces Riau and Jambi respectively. Region V consists of West
Kalimantan and Region VI includes Central, South and East Kalimantan.
Table 2
Power expansion plan for Repelita IV
Type of plant
Total additional
capacity (MW)
Total capacity in 1988/89
(MM)
(%)
1 425
952
21.3
Diesel
969
1 893
20.6
Geothermal
220
250
2.7
Coal-fired
830
1 830
20.0
Oil-fired
630
2 186
23.8
996
10.9
Hydropower
Gas turbine
Small diesels
Minihydro
132
50
*) included under diesel plants
- *)
- *)
55
0.7
4.
Table 3
Estimated PLN demand and generation development
III-VI during Repelita IV.
in regions
Region III
Region IV
Region V
Region VI
83/84
88/89
83/84
88/89
83/84
88/89
83/84
88/89
206
959
339
1096
86
239
253
678
Losses (%)
27
22
23
20
23
21
23
20
Peak (MW)
60
238
85
256
22
56
68
226
Load factor (i.)
54
59
59
61
58
61
55
58
65
128
82
245
28
109
119
313
25
25
Sales (GWh)
Capacity (MW)
diesel
steam, oil
steam, coal
hydro
minihydro
gas turbine
10.8
100
130
10.8
16
1
1
49
49
100
30
30
.,.
1 .3
Peat Resources
The total peatland area in Indonesia is estimated to be 26 million ha,
which accounts after Canada, USSR and USA the fourth largest peatland
area in the world . However, geologically speaking very little is ｫｮｯｷｾ＠
about peat deposits and presented 26 million ha is more a soil type than
raw material for energy production. Most knowledge about peat resources
have been got through investigations of soil-scientists for agricultural
purposes .
Using available material and investigations it is estimated that peatland area containing more than one meter thick peat is about 16.5 million ha.
When thinking utilization of peat for energy production, at
least two meter thick peat is needed.
Shell International has calculated that about 8 million ha of peat deeper than 2 m could be the total
ppeat resource for energy production (table 4).
That corresponds 65
BBOE.
For comparison the known reserves of Indonesian oil are about
10 BBOE.
Table 4
Deep peat in Indonesia (103ha)
Sumatra
Kalimantan
Irian Barat
Total
Source:
1)
Very deep
peat
Medium deep
peat
Peat mixed
with other
soil types
4 - 6 m
2 - 4 m
2 - 4 m
3072.0
222.0
1468.0
4762.0
0
324.0
2870.5
3194.5
42.5
0
845.0
91.0
3163.0
1
1300.0 )
4338.5
Total
8801.5 1 )
. Euroconsult (1983)
Including 711.5 in Irian Barat where depth is uncertain.
As it can be seen from the table, peat resources are locating mainly in
Sumatra (50 per cent) and in Kalimantan (40 per cent). In those islands
peat can have a very important local role substituting mainly diesel oil
in electricity production.
However, more detailed explorations must be
carried out before establishment of peat industry.
Some preliminary surveys have already carried out by the Ministry of
Mines and Energy and b y Ministry of Public Works (transmigration areas).
Als o a pilot project for peat production and utilization is starting in
ｒ｡ｳｹＭｾ＠
near Pontianak in ｾ･ｳｴ＠
Kalimantan by the Dutch aid.
.I
1.4
Background for Peat Production Development in Indonesia
In order to develop peat industry in Indonesia, it is ･ｳｮｴｾ｡ＮＡ＠
to
clarify uncertainties concerning peat production and utilization. Peat
production and utilization technology developed by peat harnes sing
countries may need modifications when adapting it to Indonesian conditions.
Finland has developed its up-to-date peat industry mainly during last 15
years.
In this respect Finland has excellent know-how when plannin b of
peat utilization and developing of technology suitable for diffe ren t
conditions.
In the following a short description is given on the present production and utilization of peat in Finland :
6.
3
Annual peat ｰｲｯ､ｵ｣ｴｩｾｳ＠
about 10 million m , and it is expected to
reach 25-30 million m by the end of this decade.
Peat has so far
been produced mainly as milled or sod peat, the former being the m.o st
important
(87
per cent)
as
energy
peat
product.
Different
technologies have been developed for peat production, including also
small scale production of sod peat.
Peat is utilized mainly as milled and sod peat as fuel.
Several
technologies can be used for burning it depending on the size of the
boiler: suspension, grate, cyclone and fluidized bed combustion.
About 30 power stations in Finland are able to burn milled peat as
main fuel and, additionally, about 20 industrial grate boilers can
burn peat among wood fuels.
Peat briquettes and peat coke are also
used to a lesser extent.
Peat pelleting technology has also been
developed to a commercial phase. Also peat gasifier technologies are
developed both for heating plants and for diesel engines.
Transfering some Finnish peat tehcnology to Indonesia will be valuable
before making decisions about establishment of commercial peat industry
in Indonesia.
In exploration of peat in Indonesia, the similar peatland survey methods
can be used as in Finland.
Until ｮｯＧｾ＼ﾷ＠
mainly preliminary surveys of
peatlands have been carried out. Detailed surveys are, however, needed
for exact calculations of peat reserves in certain areas and for planning of peatland preparation and final production. Training of Indonesian geologists and engineers .would promote this work.
Peat analyzing
and classifying methods, which are commonly used, should also be adapted
to Indonesian conditions.
·
At this moment it is not so important to know total amount of Ind onesian
peat reserves. More important is to know technically and economi cally
exploitable peat reserves.
The only way to clarify that is to . start
pilot production of peat on different peatland types by di ffe rent me thods and continue that way to commercial production.
After that the
criter.ia for selecting economically and technically feasible peat production areas can be determined.
Indonesian has got from tra nsmi gr a tion pro gramme s a lot of experiences
about draining and drying of wet s oi l s with hi gh wood content, which
kno'l
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF THE REPUBLIC OF FINLAND
CONCERNING
THE PEAT UTILIZATION PROJECT
IN CENTRAL KALIMANTAN IN 1985-1987
Whereas, in the discussions held during the mutual visits of
the Finnish and Indonesian delegations in 1983 and 1984
the
Finnish Assistance to Indonesia in assessing the feasibility
of peat and biomass as a source of energy for rural electrification has been tentatively agreed upon; and
Whereas, after the identification mission carried out
in
May 1984, the two Governments have mutually decided to continue their cooperation in this field;
Now therefore, the Government of Indonesia and the Government
of Finland have agreed as follows;
ARTICLE
THE
I
PROJECT
1. The Peat Utilization Project, Phase I
(hereinafter referred
to as the Project) shall be implemented in Bereng
Bengkel,
Central Kalimantan during 1985-1987, comprises the following
activities :
1.1. Training, both in Finland and at site, of the Indonesian
personnel to enable them to be in charge of the
peat
production after the end of the Project.
. .. ;; ...
2
1.2. Commencement of the peat production, including preparation of a survey of peat resources, planning as
well as preparation of production fields.
1.3. Preparation of a feasibility study in order to assess
the economic and technical feasibility of an electricity generating plant using peat and/or wood waste as
fuel.
1.4. Supplies of the necessary production and transport
machinery and equipment.
2. The Project shall be implemented in accordance with the
Plan of Operations attached hereto as Annex 1.
ARTICLE
II
EXECUTIVE AUTHORITIES
1. The Government of Finland, designates
the
Ministry for
Foreign Affairs as the Executive Authority responsible for
the implementation of its obligation under this Memorandum
of Understanding.
The Ministryfor Foreign Affairs of Finland, represented in
Indonesia
by the Embassy of Finland.
2. The Government of the Republic of Indonesia
designates
Ministry of Mines and Energy as the Executive Authority
responsible for the implementation of its obligation under
this Memorandum of Understanding.
ARTICLE
III
CONTRIBUTION OF THE GOVERNMENT OF FINLAND
1. The Government of Finland shall contribute funds
towards
the costs of the Project, on a grant basis, up to maximum
of five million five hundred thousand Finnish Marks
(FIM. 5.500.000).
. .. // ...
3
Out of this amount two million five hundred thousand
Finnish Marks
(FIM. 2.500.000) are available in
the
calender year 1985, and subject to parliamentary approval
in Finland two million five hundred thousand Finnish Marks
(FIM. 2.500.000) in 1986 and five hundred thousand Finnish
Marks
(FIM. 500.000) in 1987.
2. For the implementation of the Project, the Ministry
for
Foreign Affairs of Finland shall conclude a contract with
the Finnish implementing agency for the Project, J-P Energy
Oy
(hereinafter referred to as the Finnish Implementing
Agency).
3. The Finnish contribution referred to in paragraph 1 above
shall be used to compensate the costs accrued to the
F1nn1sh Impiementing Agency from carrying out the Project
as well as the costs of the monitoring and evaluation
of
the Project in the framework of the Project Budget attached
hereto as Annex 3.
ARTICLE
IV
CONTRIBUTION OF THE GOVERNMENT OF INDONESIA
1. The Government of Indonesia will take the necessary
measures to ensure the smooth and expedient implementation
of the Project.
2. The Government of Indonesia shall be responsible for its
obligations as set forth in the Plan of Operations and in
the list of equipment to be provided by the Government of
Indonesia, attached hereto as Annexes 1 and 4.
3. All financial and any other obligations arising from the
implementation of the Project over and above the Finnish
contribution referred to in Article III above shall
be
undertaken by the Government of Indonesia.
. .. I I . ..
4
4. Implementing Agency in Indonesia for this Project is the
Directorate of Coal, Directorate General of Mines.
ARTICLE
V
STATUS OF THE EXPATRIATE PERSONNEL
AND THE IMPLEMENTING AGENCY
1. The Government of Indonesia in accordance with the
prevailing laws and regulations, shall :
1.1. exempt the approved expatriate personnel and the
Implementing Agency from income tax or any direct
taxes on Project salaries and allowances.
1.2. grant exemption from taxes, customs duties and other
charges on import of all materials and equipment
imported into Indonesia for the Project under this
Memorandum of Understanding as well as personnel
effects of the approved expatriate personnel.
2. In accordance with the prevailing laws and regulations,
the Government of Indonesia shall impose no currency or
foreign exchange restrictions on funds introduced
into
Indonesia for the use of the Project or the approved expatriate personnel, and allow the exchange and exportation
of such funds.
3. In respect of the approved expatriate personnel working
in Indonesia under this Memorandum of Understanding the
Government of Indonesia shall
3.1. grant free of charge and without undue delay multiple
entry and exit visas and other necessary permits and
authorizations to the approved expatriate
personnel
and their families;
... I I . ..
5
3.2. in the event of arrest or detention for any reason
whatsoever of the members of the approved expatriate
personnel or their families, or of criminal proceedings
being instituted against them, immediately notify the
Embassy of Finland;
3.3. hold the approved expatriate personnel harmless
against any liability in case of damages caused by
the expatriate personnel in the course of their
duties in Indonesia unless such damage has arisen
from the gross negligence or wilful misconduct or
criminal act of the Finnish personnel;
3.4. in the event of an International crisis affecting
the safety of foreign nationals in Indonesia accord
the same repatriation facilities to the prevailing
regulations.
ARTICLE
GENERAL
VI
PROVISIONS
1. The Executive Auhtorities shall ensure that the resources
made available for the Project are exclusively utilized
for the needs of the Project in a manner enabling the implementation of the Project in the most effective way.
2. The material and equipment provided by the Government of
Finland under this Memorandum of Understanding shall
available for the unrestricted use of the Project
remain the property of the Government of Finland
and
during
the Project implementation, and shall be tran sferred
the Government of Indonesia upon the completion
be
of
to
the
Project.
. .. I I . ..
6
3. The Government of Indonesia shall ensure that the activities
under this Memorandum
of
Understanding
as well
as
the
approved personnel working in Indonesia for the Project and
their families are accorded a treatment of a manner no less
favourable than that accorded to activities of development
cooperation with any other country or development cooperation
personnel assigned to Indonesia by any other country.
4. The Executive Authorities shall act in cooperation in the
monitoring and evaluation of the Project.
5. All information and data received by a Party from the
other Party for the implementation of the Project shall be
confidential if so indicated by the other Party or if it
is such by its nature.
6. Any dispute arising out from the interpretation of application of this Memorandum of Understanding shall be settled
amicably by consultation or negotiation between the
two
Governments.
7. This Memorandum of Understanding may be amended or
modified by mutual negotiations between the two Governments;
such amendment or modification shall be made in writing.
ARTICLE
VII
ENTRY INTO FORCE; VALIDITY AND TERMINATION
1. This Memorandum of Understanding shall enter into force
on the date of signature by both Parties and remain in
force until the completion of the Project.
. .. ;; ...
7
2. This Memorandum of Understanding may be terminated by
written notification by either party to the other and
such a termination shall have effect at the expiration
of three months from the date of such notification.
Done in Jakarta on this
tenth
day of
1986 in duplicate in the English language.
February
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF
THE REPUBLIC OF INDONESIA
THE REPUBLIC OF FINLAND
ｾｒ＠
Signed
NURHADI
Signed
ERIK J¢INRICHS
·.
..
ANNEX 1.
'
P E A T
U T I L I Z A T I 0 N
P R 0 J E C T
. PLAN OF OPERATIONS FOR 1985-1987
)
)
1.
I
SUMMARY
The economy of Indonesia depends today heavily on petroleum products;
exports of oil is the main source of revenue and foreign exchange of
Indonesia. In addition, oil accounts for some 80 % of the total energy
production in Indonesia.
Indonesia is accordingly seeking to optimiz
the use of her abundant natural resources in order to diversify the
Indonesian energy base. Another object for developing energy resources
outside the island of Java, where two thirds of the 140 million of
Indonesia's
inhabitants live,
is combined with
the Government's
transmigration . program which seek to overcome
the imbalance of
settlement existing in Indonesia.
)
This peat project is one step in the developing of Indonesia's energy
base and the Bereng Bengkel area near Palangkaraya in Central Kalimantan
has been selected as the Project site since the electricity consumption
·in this area allows the utilization of the peat resources in the near
future.
The Project has been divided into two phases.
Phase I consisting of
peat
production
development,
training
of
Indonesian
personnel,
feasibility study for Phase II and reporting Phase II is preliminarily
allocated to consist of construction and demonstration of peat utilizing
power plant.
Phase I will last from early Autumn 1985 til early 1987.
Decisions of Phase II will be made, partly based on results and findings
of Phase I.
Phase I will be carried out by JP-Energy Oy, Helsinki, Finland.
The
work will be carried both in Finland and Indonesia, where two peat
production specialists will stay for approximately one ( 1) year.
The
work will be carried out under the supervision of ｆｉｾｄａ＠
and in close
cooperation with the Indonesian party.
)
2.
II
BACKGROUND
1 •1
Energy Sector
Indonesia has Jarge conventional energy resources in the form of oil,
natural gas, coal, hydro and geothermal.
It has also plenty of new and
renewable energy resource such as peat and wood wastes.
However, the
availability of indigenous oil has resulted in a petroleum - dependent
energy sector as can be seen from t he table 1.
The table · shows the
development of commercial energy mix during the five-year development
plans (Repelita).
Table 1.
'
Commercial energy supply mix at the ends of Repelita II, III
and IV (10 6 BOE)
)
Repelita II
Repel ita III
Repelita IV
1978/79
1983/84
1988/89
Natural gas
24.5 (15 . 3 %)
3 7 . 2 (1 7 . 7 %)
55.2 (18.9 %)
Coal
0.65 (0.4 %)
1.1 (0.5 7.)
28.2 ( 9. 7 %)
Hydropower
3.85 (2.4 %)
7.76 (3. 7 %)
24.3 ( 8. 3 %)
0.37 (0.2
l. 96 (0. 7 %)
Energy source
Geo thermal
7.)
Oil
131. 0 ( 81. 9 i,;)
163.7 (77.9 %)
182.4 (62.4 %)
Total
160.0 (100.0 7.)
210.1 (100.0 %)
292.2 (100:0 7.)
Rapid increase of energy demand, global_ economic reces sion and decrease
in oil export have, however, resulted in the need for diversifying the
energy sec tor of Indonesia.
Especially this means the substitution of
oil consumption with other domestic energy sources, which would leave to
the larger share of oil products for export.
This targe t can be seen
a l so from the estime.ted supp l y mix at the end of ongoing Rep eli ta IV
(table 1) where t he share of oil is 62.4 per cent instead of 78 per cent
of present situation.
The main energy sources substitu tin g oil are natural gas, coal and
hydropower.
At the local leve 1 a nd rernot e areas also peat and wood
wastes can have an important role.
---
1.2
Power Sector
In the power sector, the demand for electricity is increasing faster,
than the demand for total energy resulting in the annual growth rate of
about 20 per cent. About 70 per cent of electricity is generated from
the plants owned by PLN (state enterprise for electricity). The main
PLN generation is locating in Java (about 75 per cent) where there
exists also transmission grid. Outside Java the production is based
mainly on diesel plants. There are also plenty of captive diesel plants
owned by industry.
Table 2 shows
It shows that
of hydropower
is decreasing
the power expansion plan for Repelita IV (ending 1988/89).
the total capacity is increasing very rapidly. The shares
and coal-fired plants are increasing and the share of oil
from 86 to 56 per cent.
In regions outside Java the consumption is increasing even more rapidly
than in Java. Table 3 shows the estimated development in PLN regions
III-VI which are interesting when the utilization of peat and wood
wastes are considered. Regions IV are on Sumatra including among others
the provinces Riau and Jambi respectively. Region V consists of West
Kalimantan and Region VI includes Central, South and East Kalimantan.
Table 2
Power expansion plan for Repelita IV
Type of plant
Total additional
capacity (MW)
Total capacity in 1988/89
(MM)
(%)
1 425
952
21.3
Diesel
969
1 893
20.6
Geothermal
220
250
2.7
Coal-fired
830
1 830
20.0
Oil-fired
630
2 186
23.8
996
10.9
Hydropower
Gas turbine
Small diesels
Minihydro
132
50
*) included under diesel plants
- *)
- *)
55
0.7
4.
Table 3
Estimated PLN demand and generation development
III-VI during Repelita IV.
in regions
Region III
Region IV
Region V
Region VI
83/84
88/89
83/84
88/89
83/84
88/89
83/84
88/89
206
959
339
1096
86
239
253
678
Losses (%)
27
22
23
20
23
21
23
20
Peak (MW)
60
238
85
256
22
56
68
226
Load factor (i.)
54
59
59
61
58
61
55
58
65
128
82
245
28
109
119
313
25
25
Sales (GWh)
Capacity (MW)
diesel
steam, oil
steam, coal
hydro
minihydro
gas turbine
10.8
100
130
10.8
16
1
1
49
49
100
30
30
.,.
1 .3
Peat Resources
The total peatland area in Indonesia is estimated to be 26 million ha,
which accounts after Canada, USSR and USA the fourth largest peatland
area in the world . However, geologically speaking very little is ｫｮｯｷｾ＠
about peat deposits and presented 26 million ha is more a soil type than
raw material for energy production. Most knowledge about peat resources
have been got through investigations of soil-scientists for agricultural
purposes .
Using available material and investigations it is estimated that peatland area containing more than one meter thick peat is about 16.5 million ha.
When thinking utilization of peat for energy production, at
least two meter thick peat is needed.
Shell International has calculated that about 8 million ha of peat deeper than 2 m could be the total
ppeat resource for energy production (table 4).
That corresponds 65
BBOE.
For comparison the known reserves of Indonesian oil are about
10 BBOE.
Table 4
Deep peat in Indonesia (103ha)
Sumatra
Kalimantan
Irian Barat
Total
Source:
1)
Very deep
peat
Medium deep
peat
Peat mixed
with other
soil types
4 - 6 m
2 - 4 m
2 - 4 m
3072.0
222.0
1468.0
4762.0
0
324.0
2870.5
3194.5
42.5
0
845.0
91.0
3163.0
1
1300.0 )
4338.5
Total
8801.5 1 )
. Euroconsult (1983)
Including 711.5 in Irian Barat where depth is uncertain.
As it can be seen from the table, peat resources are locating mainly in
Sumatra (50 per cent) and in Kalimantan (40 per cent). In those islands
peat can have a very important local role substituting mainly diesel oil
in electricity production.
However, more detailed explorations must be
carried out before establishment of peat industry.
Some preliminary surveys have already carried out by the Ministry of
Mines and Energy and b y Ministry of Public Works (transmigration areas).
Als o a pilot project for peat production and utilization is starting in
ｒ｡ｳｹＭｾ＠
near Pontianak in ｾ･ｳｴ＠
Kalimantan by the Dutch aid.
.I
1.4
Background for Peat Production Development in Indonesia
In order to develop peat industry in Indonesia, it is ･ｳｮｴｾ｡ＮＡ＠
to
clarify uncertainties concerning peat production and utilization. Peat
production and utilization technology developed by peat harnes sing
countries may need modifications when adapting it to Indonesian conditions.
Finland has developed its up-to-date peat industry mainly during last 15
years.
In this respect Finland has excellent know-how when plannin b of
peat utilization and developing of technology suitable for diffe ren t
conditions.
In the following a short description is given on the present production and utilization of peat in Finland :
6.
3
Annual peat ｰｲｯ､ｵ｣ｴｩｾｳ＠
about 10 million m , and it is expected to
reach 25-30 million m by the end of this decade.
Peat has so far
been produced mainly as milled or sod peat, the former being the m.o st
important
(87
per cent)
as
energy
peat
product.
Different
technologies have been developed for peat production, including also
small scale production of sod peat.
Peat is utilized mainly as milled and sod peat as fuel.
Several
technologies can be used for burning it depending on the size of the
boiler: suspension, grate, cyclone and fluidized bed combustion.
About 30 power stations in Finland are able to burn milled peat as
main fuel and, additionally, about 20 industrial grate boilers can
burn peat among wood fuels.
Peat briquettes and peat coke are also
used to a lesser extent.
Peat pelleting technology has also been
developed to a commercial phase. Also peat gasifier technologies are
developed both for heating plants and for diesel engines.
Transfering some Finnish peat tehcnology to Indonesia will be valuable
before making decisions about establishment of commercial peat industry
in Indonesia.
In exploration of peat in Indonesia, the similar peatland survey methods
can be used as in Finland.
Until ｮｯＧｾ＼ﾷ＠
mainly preliminary surveys of
peatlands have been carried out. Detailed surveys are, however, needed
for exact calculations of peat reserves in certain areas and for planning of peatland preparation and final production. Training of Indonesian geologists and engineers .would promote this work.
Peat analyzing
and classifying methods, which are commonly used, should also be adapted
to Indonesian conditions.
·
At this moment it is not so important to know total amount of Ind onesian
peat reserves. More important is to know technically and economi cally
exploitable peat reserves.
The only way to clarify that is to . start
pilot production of peat on different peatland types by di ffe rent me thods and continue that way to commercial production.
After that the
criter.ia for selecting economically and technically feasible peat production areas can be determined.
Indonesian has got from tra nsmi gr a tion pro gramme s a lot of experiences
about draining and drying of wet s oi l s with hi gh wood content, which
kno'l