Semen Indonesia plans Padang power plant

State-run cement producer, PT Semen Indonesia, is considering building a 100MW coal-fired power plant to supply its facilities in Padang, West Sumatra, the construction of which is expected to start next year.

Semen Indonesia president director, Dwi Soetjipto, said the company was undertaking a study on the plan, particularly on the capacity level of the power plant. Once the plant is completed, it will supply the company's Padang cement facility, which will see an increase in electricity consumption following the start of operation of the 3Mta Indarung VI kiln line in 2016.

Dwi said: "Our facilities in Padang need about 150MW. Once the new factory starts operations, the total power needed might rise to 200MW, so I think it won't be too much to construct a new 100MW plant," he said. "We are focussing on building a plant to support the operation of our [cement] facilities, but if there is surplus of power from the plant we might also distribute it to local residents."

He added that power plant construction usually cost the company about US$150/MW in investment. The plant will use low-grade coal with a high sulphur content. Dwi said building infrastructure was becoming more pressing for the publicly-listed giant, with higher power plant costs due to the rise in production and the increase in electricity prices bringing additional costs for the cement industry.

As of 1 May, the government raised electricity prices by either 38.9 per cent or 64.7 per cent, depending on businesses' power consumption. The increases, however, will be phased in gradually every two months until the end of the year.

Semen Indonesia, according to its published annual report, saw its energy usage rise by 13.2 per cent YoY to 2.52mMW/h in 2013. Its electricity costs during the year rose by 30.1 per cent YoY to IDR1.88trn. The company's electricity costs made up about 39.8 per cent of the company's total costs last year.