Few (or Many?) Unpatriotic People

Saturday is a perfect day to meet the neighbors and do small chat. This small chat has actually given me an insight from an “industry player”. The industry is power industry. As you might already know, PLN has the monopoly of the industry and according to what we face right know, they are in trouble. Indonesia is facing energy deficit period. The demand rises faster than PLN’s ability to generate power (but who knows the truth?).

This “deficit” issue has created some waves in the national level because the government decided to go for 10.000 MW coal fired power plants and then is planning for a nuclear power plant also. The discussion here is mainly concerning the first option (10.000 MW).

This neighbor of mine said that hydropower will not be the first priority of PLN if PLN still monopolize the business (despite huge hydro power potential in Indonesia – I mean huge). He is on the opinion of full market driven power industry (just like what is planned in the “dead” Law No.20/2002). Why? It is because hydropower needs only little operational cost. The water, you do not have to buy. There is no fuel transport etc. In short, hydropower is the cheapest to operate (except maybe compared to nuclear AFAIK). According to him, this condition is not good for the industry A.K.A. PLN because the company cannot “make” money out of the government’s subsidy.

Let’s see thermal power generation. I define thermal power plant as any generator that burn fossil fuel (coal, oil, gas etc.). Thermal generator needs huge amount of money to operate and maintain. The fuel is already costly and someone can “play” with his authority to get the best “deal”. Maintenance is also costly and for some cheaply constructed power plants, the frequency of maintenance might be higher than the high quality power plants. Thermal power plant has one big benefit. It is easily started, especially the gas fired power plants. This characteristic has made the gas fired power plants usually act as “peaker” or power plants that operate on peak hours only.

So, why the government wants to build 10.000 MW coal fired power plants? It is believed that Indonesia is coal rich country (high Sulfur ones). It is argued that high sulfur coal is not sellable to export market thus Indonesia should use it at home. From this point of view it is very clear that “only the bad ones are for our people”. The 10.000 MW project is huge and one can imagine how much coal is needed. This creates “project” for certain people in “certain” position. There are chance to make “money” from many vendors available in Indonesia.

But why Chinese products? Chinese can deliver the power plant fast. I once talk to an expert of BPPT, he mentioned that Chinese products (coal power plant) is always in custom mode. Although they have the same product number but the same part still have high probability to be not compatible to each other. It is not like buying a Japanese car. When the spark plug is broken, one can buy the same type and it is just plug and play. Chinese power plant is not like that. This condition creates a scenario of “high cost” maintenance, especially if one considers the quality of Chinese products. High quality European/Japanese power plant will need least maintenance and somebody cannot make “money” of it. Chinese products are also cheap. It is cheap in front but costly at the end.

So I suspect “money and greed” has driven this 10.000 MW policy. The decision maker is not realizing the financial burden afterwards. This will just make “corruption” and “power abuse” atmosphere thicker. The policy will not solve energy situation in Indonesia. It will just make the government position worse and the worst situation is bankruptcy. Few people has made the whole nations suffers and who get the benefits? The Chinese off course! Indonesia’s competitive position against China will be lower and lower and lower. Those people that pass this policy have no patriotic spirit at all.This country is already sick, but I still have hopes. How? Support renewable and keep on protesting on unfriendly and non pro-people policy. One more thing, support KPK in battling corruption.