98
The Project for Promotion of Clean Coal Technology (CCT) in Indonesia Final Report 5-22 Figure 5.3-10 Trend of Low rank coal price index (ICI-4) Source: JICA Study Team 5.4 CO 2 Reduction Effect and Prospect for the Use of Various Systems (1) Prospect for CO 2 emission reduction by introduction of CCT DNPI states that in 2005, Indonesia's total GHG emission volume including forestry sector and emission sources such as peatland was about 2.1Gt-C(e), but it would reach about 3.3Gt-C(e) by 2030 under the BAU scenario (see below figure 19 ). Power sector in particular is expected to experience rapid increase in emissions. Even at present, while the forestry sector, which is the largest emissions resource for Indonesia, will reduce emissions by 20% and peatland emissions will only grow by 1.26X, power sector is expected to increase its emissions by 7.36X at 810 Mt-C(e) by 2030, overtaking the forestry sector. 19 DNPI, Indonesia’s Greenhouse Gas Cost Abatement Cost Curve, August 2010. The report was prepared by the Indonesian government with cooperation from public and private sector experts, and attempts to make a more accurate mid- to long-term forecast on GHG emission volume and reduction potential by reviewing the forecast in the second report to the UN and economic conditions, etc.

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Page 1: (1) Prospect for CO - JICA報告書PDF版(JICA Report PDF)

The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-22

Figure 5.3-10 Trend of Low rank coal price index (ICI-4)

Source: JICA Study Team

5.4 CO2 Reduction Effect and Prospect for the Use of Various Systems

(1) Prospect for CO2 emission reduction by introduction of CCT DNPI states that in 2005, Indonesia's total GHG emission volume including forestry sector and

emission sources such as peatland was about 2.1Gt-C(e), but it would reach about 3.3Gt-C(e) by 2030 under the BAU scenario (see below figure19).

Power sector in particular is expected to experience rapid increase in emissions. Even at present, while the forestry sector, which is the largest emissions resource for Indonesia, will reduce emissions by 20% and peatland emissions will only grow by 1.26X, power sector is expected to increase its emissions by 7.36X at 810 Mt-C(e) by 2030, overtaking the forestry sector.

19 DNPI, Indonesia’s Greenhouse Gas Cost Abatement Cost Curve, August 2010. The report was prepared by the Indonesian

government with cooperation from public and private sector experts, and attempts to make a more accurate mid- to long-term forecast on GHG emission volume and reduction potential by reviewing the forecast in the second report to the UN and economic conditions, etc.

Page 2: (1) Prospect for CO - JICA報告書PDF版(JICA Report PDF)

The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-23

Figure 5.4-1 GHG emissions forecast for Indonesia (source: DNPI)

In the same report, DNPI compares the power generation capacity by source, and under the BAU scenario, coal is expected to reach 645 TWh (66%) (see below figure). It clearly stated that coal-fired power generation is the cause of rapid increase in BAU-based GHG emission volume, and that there is possible reduction of 225Mt-C(e) for coal as of 2030.

Figure 5.4-2 Power generation capacity by source and GHG emissions growth from fossil fuel Source: DNPI

770 890 970

840 730 670

110 370

810

60

220

440

130

145

150

95

100

105

25

45

75

25

30

40

2005 2020 2030 Peat LULUCF2 Power Transport Agriculture Petroleum and gas Cement Buildings

4.97%

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-24

(2) CO2 reduction effect by introduction of CCT (a) CO2 reduction volume

Assuming that coal-fired power plants built after 2017 will all use USC with generation efficiency of 42%, and using the 3% difference between generation efficiency of 39% by SC to calculate the CO2 emission reduction effect, annual reduction of 1.57 Mt in 2020 and 6.68 Mt in 2025 will be possible. In addition, if we assume that part of the USC power generation in 2025 will utilize IGCC power plants, annual reduction of 8.32 Mt will be possible.

2017 2018 2019 2020 2021 2022 2023 2024 2025

5.6 Mil T/Y

22.5 Mil T/Y

67.6 Mil T/Y

50.7 Mil T/Y

39.5 Mil T/Y

78.9 Mil T/Y

95.8 Mil T/Y

0.38 Mil T/Y reduction

1.57 Mil T/Y reduction

2.75 Mil T/Y reduction

3.54 Mil T/Y reduction

4.71 Mil T/Y reduction

5.5 Mil T/Y reduction

6.68 Mil T/Y reduction & 8.32 Mil T/Y with IGCC

+1,000MW

+3,000MW

+3,000MW

+2,000MW

+3,000MW

+2,000MW

+3,000MW

Additional Capacity

Co2 Emission

IGCC

Figure 5.4-3 CO2 reduction volume by introduction of CCT Source: Prepared by the JICA study team

(b) Contribution to Indonesia's national target

As construction of new facilities requires lead-time, quantitative contribution to the Indonesian government's reduction target will be relatively small at the initial period of CCT introduction. Against the 2020 target of 0.038Gt-C(e) for the overall energy sector in RAN-GRK, the reduction volume by 2020 will only be 0.38Mt-C(e), or 1%. However, as an additional reduction volume that is not incorporated in the target, the 1% figure is notable.

From 2025 onwards, the effect of CCT on coal-fired power generation will become significant. Reduction target for 2025 is not published, but if we apply the 2030 reduction target for coal of

225Mt-C(e), partial introduction of IGCC can make 3.7%, and USC alone can make about 3% contribution. (c) Prospect for the improvement in economic efficiency through carbon offsetting

As discussed in Chapter 2, despite the continued effort to enhance international framework against climate change, the degree of uncertainty has not changed much even after the COP17/CMP7 conference which was held with just one year remaining until the expiry of the first commitment

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-25

period for the Kyoto Protocol. In light of this situation, the CO2 credit price has been steadily declining after the slight recovery in February after the Durban Agreement, and the reference emission price used for this report was €4.3420 (about ¥470).

With respect to the new coal-fired power plants using CCT promoted to contribute to the emission reduction target by 2020, it should be appropriate to proceed with the plan without considering the possibility for improved economic efficiency from credit price, if the opportunity cost21 is added to the credit price.

(3) Prospect for the use of various systems There is a possibility that within the next year or so, the review on the framework for the second

commitment period makes rapid progress resulting in sufficient international agreement and systems establishment. Under this scenario, the emissions market may gradually recover, and carbon offsetting may become favorable from economic perspectives for the coal-fired power plants using CCT. In reviewing the application of various credit systems on highly efficient CCT for Indonesian coal-fired power plants, following two basic requirements must be taken into consideration.

(a) Systems based on methodology at an internationally recognized level

Reason: Although the initiative of the host country is respected under NAMA, MRV (monitoring, reporting, and verification) based on international standards is a mandatory requirement. In addition, if internationally recognized level is not achieved, the credibility of the carbon credit, i.e., the value itself, may be impaired.

(b) Systems that enable approvals within a time frame that does not impair the economic efficiency of

the project (construction)

Reason: In the past CDMs, average time required for approval and registration procedures was about two years. If approval for carbon credit system, which is intended to support the economic efficiency of the projects, requires substantial time, NAMA's aim to realize sustainable economic development and reduction action may be harmed.

Based on the above requirements, we now review the applicability of (i) CDM systems that have been established and are expected to continue; (ii) bilateral negotiations; and (iii) bilateral credit systems that are currently undergoing vigorous review.

(i) CDM

Of the existing CDMs, ACM0013 (Consolidated baseline and monitoring methodology for new grid connected fossil fuel fired power plants using a less GHG intensive technology) is applicable, and requirements that must be reviewed for application to construction of highly efficient CCT coal-fired power plant in Indonesia are as follows: • The project activity involves construction and operation of grid connected new fossil

fuel fired power plants that uses power generation technologies that are more efficient 20 Based on the average for January-March 2012 secondary CER spot rate in Reuters (Point Carbon) market report. Nikkei

JBIC reference quote (as of March 29, 2012) has shown a similar trend at ¥431.3 (bid ¥461.2, offer ¥401.5). 21 In addition to the time and expenses required for the application procedures for UN or other relevant institutions, other

uncertain factors can be expected. As a result, the option not to take offsetting into consideration may become attractive also from the policy perspective of accumulating BAU based emissions reduction results as quickly as possible.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-26

than the technology expected to be used with the fossil fuel as power source without such project;

• Such project activity does not involve co generation power generation facility; • Fuel consumption and power generation data for recently constructed power

generation facility is available; • The baseline fuel is used within the regional area (to be defined in the methodology)

of the host country, or for 50% or more of the total power generation volume in the host country. To verify these conditions, recent three-year data must be used. Maximum power generation volume using the same fossil fuel for the three year period should be 50% or higher.

The only requirement currently not met is the fourth one, i.e., that coal be used for 50% or more of the total power generation in the relevant regional area (Java-Bali distribution system). However, considering the forecast that the coal-fired power generation capacity is expected to reach 61.7% of total power sources in 2015, it is only a matter of time to exceed the 50% threshold. However, aside from the applicability of the methodology, we cannot expect too much from application of CDM to highly efficient CCT coal-fired power generation unless there is a change in basic framework and approach towards CDMs in the post-Kyoto era considering the following issues: • Strong opposition against applying CDM to coal-fired power generation exists22,

mainly in EU;

• Considering the baseline approach for CDM, approval of two or more projects as different projects is unlikely for same CCT based coal-fired power generation. In addition, even if a policy decision is made to implement the CCT, it would be difficult to prove its additionality.

(ii) Bilateral credit system Bilateral credit system is a flexible mechanism that was basically approved at the Copenhagen Agreement, and various countries are reviewing its implementation. If implemented, developing countries and industrial countries can expect to establish a mutually beneficial relationship through promotion of technology transfer and creation of credit. Its features are as follows: • As it is based on agreement between two countries, a system that is suitable to the

systems and policies in place in the host country can be established. In case of highly efficient CCT coal-fired power generation, Japan's bilateral credit system can be used, as the reduction action will involve transfer of Japanese technology:

22 Based on the opinion that application of CDM to coal-fired power generation is inappropriate in relation to the

additionality requirement for CDM (whether or not it would have been implemented without CDM), as is the case with most energy saving projects. There is a recent movement to remove CER for coal-fired power generation and large-scale hydroelectric power generation from EU-ETS.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-27

• Certain system must be established for approval. However, as approval does not require direct involvement by the UN, relatively quick procedure can be expected.

• In light of the basic requirement "a," MRV at an internationally recognized level must be established for application of bilateral credit system.

As the international MRV guideline itself is still being prepared, we would propose preparation of the MRV referring to J-MRV004 methodology by JBIC (fossil fuel-fired power generation projects introducing low carbon power generation technologies), which focuses on coal-fired power generation that flexibly captures additionality while based on shared spirit with ACM0013 of CDM, as a reference.

<Requirements for application of J-MRV004> 23 • The project involves construction of a new fossil fuel-fired power plant or renovation

of existing power plant for introduction of low carbon power generation technology; • The power plant supplies power to the grid, and is not a co generation facility; • For existing power plants, in principle, same type of fuel will be used after the

renovation (excluding fuel conversion).

<Physical boundary of the project> The boundary for the project using this methodology shall be the relevant power generation facility

within the project site.

<Baseline emission volume>

a. Basic approach, assumption and rationale on baseline emission volume

[New Plants] Depending on the surrounding environment of the project, select from (i) to (iii) below (with (i) as default):

(i) Baseline emission factor shall be the average emission factor for all of the power plants in the country;

(ii) Baseline emission factor shall be the emission factor for the country as stated in the "J-MRV Guideline" attachment 3; or

(iii) Other appropriate emission factors may be adopted.

b. In case the country has limitations such as fuel, energy policy, or economy, baseline emission factor can be the average emission factor based on power plants using same type of fuel in the country. (i) In such a case, the business shall confirm the background for the choice of fuel

considering the above stated limitations;

23 “The Guidelines for Measurement, Reporting and Verification of GHG Emission Reduction in JBIC’s GREEN,” revised

in February 2011.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-28

(ii) Baseline emission factor shall be prepared by using emission factor for power plants using the same type of fuel based on data published by the International Energy Agency (IEA), etc.

(iii) Other appropriate emission factors may be adopted; (iv) If a power plant using the same type of fuel does not exist in the country,

appropriate baseline emission factor shall be determined by interviewing experts or researching documents, and considering the technology level and electricity conditions in the country or surrounding countries.

c. In case there is a minimum requirement such as the host country's standard on generation efficiency or CO2 emission units or an international de facto standard, baseline emission factor shall be determined taking them into consideration.

In addition, state that the reduction action using bilateral credit is distinguished from the quantitative reduction by the host country as Credit NAMA, in the same manner as for other reduction actions involving carbon credit.

5.5 Economical evaluation of CCT

(1) Conditions for economical evaluation The evaluation was based on following prerequisite

(a) In plant thermal efficiency calculation, boiler efficiency decrease due to moisture in coal was considered.

(b) Increase of special lignite coal firing system and boiler furnace size increase were considered due to following reason. The lignite coal calorific values are 2400/3000 kcal/kg24 and special design of boiler, such as coal drying process and increase of flue gas volume have to be considered.

(c) The construction cost of IGCC was not so different between 2400kcal/kg and 3000kcal/kg, since gasification furnace size is almost same. Manufacturer’s target cost was used for estimation of IGCC construction cost, because commercial operation of IGCC power plant does not yet start at this moment.

(d) A coal price at FY 2020 will be double of that at FY 2011.

24 The kind of coal is selected based on Indonesian Coal Index(IDI) in the Figure 5.3-9 and Table 5.3-1

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-29

Table 5.5-1 Prerequisite of Comparison for economical efficiency. (construction cost, Plant thermal efficiency, O&M cost and Coal unit price)

Precondition of cost comparison Sub Critical SC USC IGCC Coal Price

($/ton)

Gross Power 1,000MW 1,000MW 1,000MW 1000MW Class Y 2011 Y 2020

PlantEfficiency

4,200kcal/kg 36% 39% 42% 49% 53.8 107.6

3,000kcal/kg 33% 36% 39% 45% 31.4 62.8

2,400kcal/kg 30% 33% 36% 42% 21.7 43.4

Construction Cost

4,200kcal/kg 100%(Base) 106.5%. 108.5% 130.0% - -

3,000kcal/kg 107.0% 111.0% 115.0% 130.0% - -

2,400kcal/kg 110.5% 115.5% 119.0% 130.0% - -

Coal Consumption (kg/kWh.net) 100%(Base) 90% 84% 75% - -

O & M cost 2 .5% 3 % 3 % 3.% - -

Source:JICA study team

(2) Comparison of economical evaluation Economical evaluation was carried out by comparison of electric power generation cost per

kWh, taking difference of plant thermal efficiency, construction cost, consumption of coal and O&M cost of sub-critical, super critical and ultra- super-critical plant into consideration.

The plant facilities costs were estimated by using coefficient of payback, which is identical during project period, and interest rate of the calculation condition of the capital collection coefficient are as follows.

(a) Project period: 30 years

(b) Interest rate: 12 percents

The construction cost thus calculated, the fuel cost estimated based on the plant efficiency and coal price, and the O&M cost set by plant type were summed up to calculate the total cost of power generation. For IGCC, for which no actual operation data was available, the calculation was made based on the results of interviews with the manufacturers and targeting the period of 30 years to provide reference values to be compared with the calculation results of other plants.

3) Figures of comparison of economical evaluation are shown below (Figure 5.5-1). The upper left graph in the figure shows the plant efficiency by heat value of coal and the upper right graph shows differences in the power generation cost as of 2010. The lower left and lower right graphs show differences in the power generation cost caused by changes in the coal price for 2010 and 2020, respectively.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-30

5.3

5.4

5.5

5.6

5.7

5.8

5.9

5.3

5.4

5.5

5.6

5.7

5.8

5.9

5.3

5.4

5.5

5.6

5.7

5.8

5.9

Plant efficiency (gross, HHV) by Coal Type

25%

35%

45%

25%

35%

45%

25%

35%

45%

Sub-C SC USC IGCC

Sub-C SC USC IGCC

Sub-C SC USC IGCC

36%39%

42%

49%

33%36%

39%

45%

30%33%

36%

42%

4,200 Kcal/kg

3,000 Kcal/kg

2,400 Kcal/kg

Sub-C SC USC

Sub-C SC USC

Sub-C SC USC

5.88 5.82 5.65

5.70 5.59

5.49

5.64 5.56

5.44

2010 Generation Cost (US cent/kWh)

-2.9%

-2.2%

-1.8%

=△11.3 MUSD/Y

=△6.6 MUSD/Y

=△7.9 MUSD/Y

4,200 Kcal/kg = 53.8 US$/t

3,000 Kcal/kg = 31.4 US$/t

2,400 Kcal/kg = 21.7 US$/t

5.3

5.4

5.5

5.6

5.7

5.8

5.9

7

7.5

8

8.5

9

9.5

7

7.5

8

8.5

9

9.5

IGCC

IGCC

5.68

5.55

2010 Generation Cost (US cent/kWh)

7

7.5

8

8.5

9

9.5

 

9.218.82

8.44 8.43

8.668.25

7.95 7.88

8.468.06

7.74 7.55

Sub-C SC USC IGCC

Sub-C SC USC IGCC

Sub-C SC USC IGCC

2020 Generation Cost (US cent/kWh)

-4.3%-4.3%

-3.6%-3.6%

-4.0%-4.0%

=△25.3 MUSD/Y

=△19.9 MUSD/Y

=△21.3 MUSD/Y

5.3

5.4

5.5

5.6

5.7

5.8

5.9

5.3

5.4

5.5

5.6

5.7

5.8

5.9

Sub-C SC USC

Sub-C SC USC

5.88 5.82 5.65

5.70 5.59

5.49

5.64 5.56

5.44

-2.9%-2.9%

-2.2%-2.2%

-1.8%-1.8%

=△11.3 MUSD/Y

=△6.6 MUSD/Y

=△7.9 MUSD/Y

4,200 Kcal/kg = 53.8 US$/t

3,000 Kcal/kg = 31.4 US$/t

4,200 Kcal/kg = 107.6 US$/t

3,000 Kcal/kg = 62.8 US$/t

2,400 Kcal/kg = 43.4 US$/t

Figure 5.5-1 Comparison of economical efficiency Source: JICA Study Team

Economical evaluation (a) In case of coal price of 2011, although economical superiority of USC is confirmed in any coal

qualities, there are a little bit differences only. But in case of coal price of 2020, USC plant is economical, because the more coal price increases, the more plant thermal efficiency affects to the cost of generation

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-31

(b) As to IGCC, in case of the coal price of 2020, introduction of the commercial plant will be feasible, because economical superiority compared to USC was confirmed when low quality coal was fired in particular.

In comparison of 1,000MW class plant, construction cost of USC power plant is 24 million dollars / year higher, after annual expense conversion, than that of SC. And O&M Cost of USC power plant is also about 1 million US$/year higher. But compared with these cost increase, since fuel cost is 30 millions US$/year lower, USC power plant is economical than SC plant. Image of above comparison is shown in the Figure 5.5-2 and 5.5-3.

Initial Cost

+

-

Annual Fuel cost Annual BenefitAnnual

O&M cost

Pay back period

Cost

Diff

eren

ce (m

illion

USD

)

Initial Cost ÷ Annual Benefit

24 ÷ 29 ≒ 1 year

- 30 - 29

24

1

Comparison of the cost between SC and USC

+ =

Figure 5.5-2 Comparison of the Cost for USC and SC Source: JICA Study Team

Impact of generating cost difference of 0.1 cent/kWh.

= 0.1 (cent/kWh) × 950(MW) × 8760(h) × 0.8

Net Capacity Hours in a year

CapacityFactor

= 0.1 × 6,657,600,000 (kWh)

= 6.66 (Million US$ per year)

Annual Electric power generationCost

DifferenceAnnual Difference of generating cost = ×

※ Net Capacity = [Unit Gross Capacity] - [Auxiliary Power]= 1000MW × (1 - 0.05)= 950 MW

Figure 5.5-3 Impact for 1kwf of Generation cost Source: JICA Study Team

Problem of the Introduction of CCT 1) The impact for plant load factor and plant thermal efficiencies

The advantage of introduction of USC is fuel cost reduction more than the increment of

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-32

construction cost and a CO2 reduction effect. However, when decrease of plant thermal efficiency and the plant load factor by poor design, construction and aged deterioration, advantage of the USC introduction will be spoiled. Specifically, demerit of construction cost becomes 82US$/kW as shown in Table 5.5-2, when plant thermal efficiency decreased 1% than the base case. In other words, 1% of thermal efficiency is equivalent to 82US$/kW of construction cost. Furthermore, when a plant load factor decreased 10% than base case by outbreak of trouble and unachievable of rated output, equivalent construction cost is 76US$/kW. Therefore, when occasion of USC introduction, the assessments of degradation of plant thermal efficiency and plant load factor side as well as a comparison of the construction cost become indispensable. (refer to table 5.5-2)

Table 5.5-2 Cost impact Analysis by the decline of the plant load factor/ plant thermal efficiency.

Rated plantoutputs

Plant efficiency degradation

100% 99%(▲1%)

95%(▲5%)

90%(▲10%)

0% base 8 38 76

▲1% 82 90 120 158

▲2% 168 176 206 244

▲3% 259 267 297 335

Rated plantoutputs

Plant efficiency degradation

100% 99%(▲1%)

95%(▲5%)

90%(▲10%)

0% base 8 38 76

▲1% 82 90 120 158

▲2% 168 176 206 244

▲3% 259 267 297 335

Source: JICA Study Team

2) Action for realization of high efficiency and high load operation Figure 5.5-3 shows decrease of plant thermal efficiency of Coal-Fired power plants in Indonesia

and of Japan (CEPCO). CEPCO Hekinan unit #1 indicated in the figure is coal -fired conventional plant whose capacity is 1000MW and the efficiency of Indonesia consists of average data of sub-critical plants whose output are 300 MW.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-33

20

25

30

35

40

45

0 5 10 15 20 25

インドネシア300MW級

CEPCO碧南1号

(700MW)

Remarkable decreases in the efficiency of coal-fired power generation by aging

Years of operation

Effic

ienc

y(%

)

* Efficiency of each power plant inIndonesia plotted based on yearsof operation

300 MW facilities in Indonesia

CEPCO Hekinan unit #1 (700MW)

Figure 5.5-4 Thermal Efficiency of Coal-Fired Power Plants in Indonesia and of CEPCO Source:Survey by PT CDMINDONESIA

This figure shows that the decrease of plant thermal efficiency in Indonesia is almost 10% from the start of commercial operation in about ten years. On the other hand, the decrease of plant thermal efficiency in Japan (CEPCO) is 1-2%.

When introduction of USC technology of high efficiency, to get the merits such as economical efficiency and CO2 reduction effect, the actions about operation and maintenance that avoid decline of plant thermal efficiency and the plant load factor by aging becomes indispensable. In SC and USC plant operation, compared with sub-critical pressure plant operation, the following operation and maintenance management techniques are proposed. <Strict management of water quality>

Figure 5.5-5 shows structural differences between the sub-critical pressure plant drum-type boiler and the SC and USC plant one-through boiler.

Figure 5.5-5 Boiler structure differences by unit type Source:JICA Study Team

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-34

Unlike the drum-type boiler that can blow off impurities, all impurities contained in supplied water remain in the one-through boiler and become scale on the inner surface of the tube. The accumulation of scale will lead to a decrease in the efficiency of heat transfer, overheat the tube and eventually damage it. For the one-through boiler, it is therefore necessary to manage water quality more strictly than for the drum-type boiler. Figure 5.5-6 shows the scale attached to the heat transfer tube during the operations and Figure 5.5-7 shows a tube damaged by overheating.

Ordinary heat transfer tube Scale-attached heat transfer tube

Figure 5.5-6 Scale attached to a heat transfer tube

Source: JICA Study Team

Figure 5.5-7 Heat transfer tube damaged by overheating

Source: JICA Study Team

In the following, the drum unit and the one-through unit will be compared regarding the management of water quality for the water supply system, which is conducted to meet the following purposes:

1) Prevent the corrosion of the water supply system

2) Prevent the generation of scale inside the water supply system

3) Manage the performance of the deaerator

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-35

4) Carry out the final checking of the quality of water supplied to the boiler

Figure 5.5-8 and Figure 5.5-9 show the water quality management points and the injection points of

chemicals for the drum unit and the one-through unit, respectively.

Figure 5.5-8 Water management points and chemicals injection points of the drum unit

Source: JICA Study Team

RH

High-pressure turbine

Drum

Deaerator

Economizer

CP

BFP

HP-HTR

Low-pressure turbine

Condenser 1) 2) 3)

2)

5)

1)

2)

1)

2) 4)

◎ ◎

LP-HTR

◎ : N2H4 injection point

○ : Injection point for sodium phosphate (Na3PO4: Na2HPO4)

Installed devices:

1) pH meter

2) Electric conductivity meter

3) Silica meter

4) DO meter

5) Salinity meter

SH

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-36

SH

RH

高圧タービン

W・W

脱気器

節炭器

CP

BFP

HP-HTR

低圧タービン

復水器

LP-HTR

◎ : N2H4注入点

◇ : NH3 注入点

CBP ②

コンデミ

設置計器名

①pH計

②電気伝導率計

③シリカ計

④DO計

⑥鉄モニター

⑦ナトリウム計

⑧検塩計

⑤ヒドラジン計

Figure 5.5-9 Water quality management points and chemicals injection points of the one-through unit

Source:JICA Study Team

SH

RH W・W

2) 6)

2)

2) 4) 5) 6)

8)

1) 2) 5) 6)

6)

4)

5)

2)

1) 2) 4) 6)

7)

2)

6)

Economizer

Deaerator

BFP

HP - HTR LP - HTR

High-pressure turbine

Low-pressure turbine

Condenser

Con- Demi (Condensate Demineralizer)

CBP

CP

N2H4 injection point

NH3 injection point

Installed devices:

1) pH meter

2) Electric conductivity meter

3) Silica meter

4) DO meter

5) Hydrazine meter

6) Iron monitor

7) Sodium mater

8) Salinity meter

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Final Report 5-37

As for the management of water quality, the following criteria have been set according to the results of the property tests conducted for water treatment, manufacturers’ recommended values, and also to JIS values.

Table 5.5-3 Supplied water quality management criteria applied in the drum unit operation

Water to be tested Measurement

item Unit

Criteria

(Target)

Supp

lied

wat

er Deaerator outlet Dissolved oxygen mg/l 0.007 or below

Deaerator outlet or Economizer inlet

pH - 8.6 - 9.4 Electric

conductivity μS/cm 0.3 or below

Total iron mg/l (0.020 or below) Total copper mg/l (0.010 or below)

Source: JICA Study Team

Table 5.5-4 Supply water quality management criteria applied in the drum-type boiler operation

Water to be tested Measurement item Unit

Volatile substance treatment method

Oxygen treatment method

Sub-critical pressure

Super-critical pressure or

higher

Super-critical pressure or

higher

Supp

lied

wat

er

Deaerator outlet

Dissolved oxygen mg/l 0.007 or

below 0.007or below -

Deaerator outlet or

economizer inlet

Total iron mg/l 0.010 or below

0.010 or below

0.010 or below

Total copper mg/l 0.020 or below

0.020 or below

0.020 or below

Economizer inlet

pH - 9.2 - 9.4 9.3 - 9.7 8.5 - 9.0 Electric

conductivity μS/cm 0.25 or below 0.25 or below 0.25 or below

Total iron mg/l 0.010 or below

0.010 or below

0.010 or below

Dissolved oxygen mg/l 0.05 - 0.15

Source: JICA Study Team

As shown in the tables above, the number of measurement items is larger and the criteria that need to be set are stricter for the one-through unit than the drum unit. Also, the automatic analyzers used for the measurements need to be maintained and inspected in a planned manner.

To ensure strict water quality management, it is necessary to establish the appropriate system (for measurement items, measurement points, management values, consecutive monitoring, and the appropriate management of measuring instruments). CEPCO constantly monitors water quality for the condenser and water supply systems, and members in charge of power generation and maintenance are sharing the roles as detailed in Table 5.5-5.

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Final Report 5-38

Table 5.5-5 Role-sharing for water quality management in a power generation plant

Members in charge of power generation

• Constant monitoring by the use of the monitor • Hourly examination of the operation records (comparison with the management values) • Monitoring using Plant condition monitoring system • Daily inspection patrols (once per day) to check the soundness of measuring instruments on the site

Members in charge of maintenance

• Regular check and calibration of measuring instruments • Management of the inspection results

Source:J ICA Study Team

As one example, Table 5.5-5 shows Plant condition monitoring system, which is an online monitoring system to check the plant operation status based on the threshold values set according to the standards calculated in a statistical manner based on the actual operation data stored in the plant computer. In the event of deviations from the threshold values, warning messages will be given to notify the staff of abnormalities about the plant and individual machines. Figure 5.5-10 shows the conceptual diagram of the system.

Figure 5.5-10 Conceptual diagram of Plant condition monitoring system

Source: JICA Study Team

Figure 5.5-11 shows the flow of the monitoring operations conducted using Plamt condition monitoring system.

No. 1 Unit computer

No. 2 Unit computer

No. 3 Unit computer

No. 4 Unit computer

No. 5 Unit computer

Plant data (operation status

Plant data (operation status

values)

Actual operation

data

Long stored actual operation data

Computer used for administration

1) Online monitoring calculation

function

2) Guidance output function

3) Standard value

calculation function

Threshold value

Additional scope

Monitoring results

Directing the creation of standard

values

Abnormality monitoring

server

Abnormality monitoring

terminal

Abnormality?

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-39

Figure 5.5-11 low of monitoring operations conducted using Plant condition monitoring system

Source: JICA Study Team

Computer processing

Prep

arat

ion

Ope

ratio

n (d

aily

ope

ratio

ns)

Start of operation

Creation of the standard values

Setting of the monitoring conditions

Monitoring

Guidance output

Need to adjust the standard values/threshold

values

Manual processing

Online monitoring

Alert

Creation of the standard values 1) Set the actual operation data extraction

conditions as the basis to create the standard values

2) Specify the actual operation data extraction period and direct the creation of the standard values

Manual setting of monitoring conditions 1) Set the data variation range (threshold values)

for normal time based on the standard values 2) Set the conditions for

monitoring/non-monitoring by operation status

Decision-making in the event that an abnormality is detected 1) Decide whether the standard values/threshold values are

appropriate 2) Make analysis to decide whether it is an abnormality

symptom or not according to the abnormality-detected input point status and decide whether to continue or stop the operation based on the analysis results

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Final Report 5-40

The use of Plant condition monitoring system is expected to bring about the following effects:

(i) The plant condition monitoring operations that are now performed by operators will be automated, which will lead to the substantial reduction of labor.

(ii) In regard to the threshold values that make real-time changes according to the operation status, subtle changes will not be overlooked

(iii) Measurement and monitoring can be done at the minimum unit of one minute, which helps detect abnormalities earlier.

(iv) The input points of all the plants can be included in the monitoring target, which helps prevent omissions in monitoring.

Plant condition monitoring system not only monitors water quality but also detects even minor

abnormalities that might lead to plant failures in the future, and informs the operators of the fact at an early stage, thereby supporting the plant operations. CEPCO uses a range of monitoring tools including Plant condition monitoring system to manage the plant operation status.

<Advanced control technologies> In the drum-type boiler, the water inside the boiler is circulated by the use of difference in the

specific gravity of water. While there are limits on upsizing at high temperatures and high pressures due to slower responses and smaller difference in the specific gravity, it is relatively easy to control the system. In contrast for the one-through boiler, water supplied from the water supply pump is used as high-pressure steam and so it is possible to upsize the boiler and increases its efficiency. However, because the amount of stored water is small and large pressure changes tend to be made by load changes, it is necessary to apply advanced control technologies to the boiler. The one-through boiler does not have a drum and so the amount of heat stored in the boiler is small and it is necessary to keep a balance between the load and the water, fuel and air volume in a more accurate manner in order to keep the steam pressure, temperature and the excess air ratio at certain levels.

In order to develop engineers having these advanced operation skills and to help them maintain and improve the skills, CEPCO has established a training center to provide education and training by the use of simulators and other training facilities.

Figure 5.5-12 hows the equipment of the training center and Table 5.5-5 shows the training items implemented by the center.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-41

Simulator training on plant operations and troubleshooting

Panel of the heat transfer tube Learning the degradation management

points and receiving practical training for welding

Outer appearance of the training facilities

Figure 5.5-12 Equipment of the training center

Source: JICA Study Team

Table 5.5-6 Training items (examples)

Type of trouble by simulator Training with using actual thing

MFT behavior ・Cross-section models of various detectors, etc.

Turbine trip ・Turbine-related accessories, cross-section models of detectors, etc.

86 G behavior ・Protective relays

Directly-connected

M/C bus conductor trip

・Experiencing electric shocks by using the relevant equipment (for

those who have never experienced such shocks)

Water supply and fuel Tx failures ・Cross-section models of detectors and transmitters, etc.

Steam tube leakage ・Broken steam tube

Feed-water heater leakage ・Vertical-type heater model

Abnormal turbine vibration ・Main turbine and GT rotating blades

Source: JICA Study Team

As shown in Table 5.5-7, qualification tests are conducted by the level of skills to be acquired by operators

Multi-purpose equipment used for the training on overhaul inspections and for various tests

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-42

Table 5.5-7 Outline of the qualification system

Source:JICA Study Team

In order to maintain the stable operation of a highly automated plant and improve the plant load factor, it is necessary for the operators to have the ability to appropriately maintain and manage the measuring instruments and automatic valves, understand the control logic and make appropriate responses to problems. To this end, the operators need to receive education and training by the use of training equipment.

<Preventive maintenance technologies including remaining life assessment> Due to high-temperature and high-pressure steam, load imposed on parts will increase over years

and if the operations are continued without conducting appropriate inspection and maintenance work, the risk that equipment problems will give serious damage to the plant and lead to long suspension of operations or to high repair cost will increase.

There are a range of factors that cause the degradation of plant machines, including the following three major factors:

Creep and creep fatigue

Fatigue (low-cycle fatigue and high-cycle fatigue)

Thinning due to corrosion, abrasion and friction

Remaining life management/assessment is conducted to check the machine degradation level for two purposes: (1) to estimate the remaining life of machines more accurately for longer use of the machines; and (2) replace machines with new ones before the occurrence of machine failures. A range of assessment technologies have been developed and used for various degradation factors. The assessment methods for each degradation factor are outlined below:

(1) Creep and creep fatigue At high temperatures, metal materials on which load are constantly imposed will be deformed over

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-43

time and eventually be broken. This phenomenon is called creep damage. Creep fatigue is a combination of fatigue (as described below) and the creep phenomenon generated when metal receives stress repeatedly at high temperatures. In a thermal power generation plant, this phenomenon could occur for the boiler superheater, reheater, high-pressure turbine and other devices used at temperatures of 450 degrees Celsius or higher. Deformations and destructions are caused through different mechanisms depending upon the materials, operating temperatures and degrees of stress. The creep test method is, however, the same for all the mechanisms, which is roughly divided into the following three:

Non-destructive inspection

Destructive inspection

Analysis method

1) Non-destructive inspection Non-destructive inspection is conducted to check the degree of damage by referring to various

changes made to inside the metal materials in association with creep as parameters. Specifically, the microscopic changes of the materials as well as changes in the hardness and electric resistance values of the materials are used as parameters, and data obtained from the targeted machines are compared with the master curve created based on the experimental data for the assessment of the remaining life.

2) Destructive inspection Samples are collected from the targeted machines and tests are conducted on the test pieces to

estimate the remaining life, including the creep tests to indentify the creep rupture time and tests to estimate the mechanical strength such as tensile strength.

3) Analytical testing Based on the use conditions of the targeted machines (temperature and pressure) and the

degradation characteristics of materials (temperature and relationship between pressure and destruction), the remaining life of the machines will be indirectly estimated.

The precision of the destructive inspection is very high and is used for the evaluation of boiler tubes from which samples can be easily collected. The creep test, however, requires much time, and for other mechanical tests, test pieces need to be prepared. The destructive inspection is therefore more costly than the non-destructive inspection and the analysis method.

For non-destructive inspection, it is easy to collect data, but because the microscopic changes inside the metal materials must be used as parameters, it is difficult to quantify the damage.

(2) Fatigue In the remaining life assessment at thermal power generation plants, the low-cycle fatigue due to

thermal fatigue is regarded as a challenge. Thermal fatigue is related to machines with thick surfaces, such as boiler drums, metal accessories to the steam generating tubes, steam turbine rotors, major valves and cylinders. Due to temperature changes following the stop and startup operations, the machines receive stress repeatedly, and the fatigue will be accumulated to destruction. The remaining

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-44

life assessment is conducted by the non-destructive inspection and analysis method as in the case of creep fatigue. The non-destructive inspection is conducted to estimate changes in hardness, composition of the materials and microscopic cracks. The analysis method is adopted to calculate the stress caused by temperature changes following stop/startup operations or load changes, and to assess the level of fatigue based on the stress changes and the fatigue characteristics of the materials.

(3) Thinning by corrosions, abrasions and frictions Corrosions are caused by chemical reactions on object surfaces while abrasions are caused by

physical reactions on the surfaces. Frictions are similar to abrasions but occur when hard materials such as coal ashes collide at high speed.

Corrosions, abrasions and frictions are caused by various factors, and they are managed by measuring the thickness of the part in question, calculating the thickness decreasing speed, and predicting when the thickness will be decreased to the minimum required level. The thickness is measured by collecting samples and using an ultrasonic measuring instrument.

The following shows the tube thickness management system actually used by CEPCO. The system is used to regularly measure decreases in the tube thickness. Inputting the measurement data in the system will start the automatic estimation of the remaining life.

The tube thickness management system is used to measure the parts that might decrease in thickness, which are located inside the core systems to which water is constantly supplied during the operation time (specifically, eddying flows and joints such as elbows) and the downstream parts. The measurements are made to quantitatively check the corrosions such as flow-accelerated corrosions (FACs), collisions of droplets, and cavitations, which could occur inside the tubes from which a large amount of liquid might be ejected due to excessive thinning, thereby fostering preventive maintenance.

The following shows the measurement and assessment flow.

Figure 5.5-13 Outline of the tube thickness management system

Source: JICA Study Team

(i) Save the measurement records obtained by the use of the ultrasonic measuring instrument on the portable terminal

(ii) Transmit the data to PC quipped with the tube thickness management system

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-45

(iii) The recorded data will be automatically assessed.

<Assessment method>

Thickness decreasing speed =(Nominal thickness - Measured thickness) / total operation hours

as of the time of inspection

Remaining life = (Measured thickness – tsr) / Thickness decreasing speed

*For the parts for which measurement was not conducted, the remaining life assessment will be made based on the thinning rate of similar parts, but because there is a possibility of local thinning, measurement is conducted for all parts to check their actual rate of thinning at the timing when half of their estimated lives is over, and the inspection precision is thus increased. Also to prevent errors in the estimation of the thinning rate due to minor variations of the measurement points, measurement is always conducted for the thinnest part in the marking range. The part in the marking range is polished at the time of measurement and can therefore be identifiable as measurement points in the next time.

Figure 5.5-14 Outline of the measurement data

Source: JICA Study Team

By using this system, voluminous data can be managed for each part, and based on the calculated remaining life, the optimal inspection and repair interval can be decided.

It is important to indentify the vulnerable parts of the equipment, inspect them appropriately, and manage the degradation tendency based on the remaining life assessment method, thereby minimizing the plant problems eventually to reduce the repair cost and improve the plant load factor.

As for the methods required for the highly efficient operations as introduced above, it is very important to establish the system for the fail-safe implementation of the necessary measures. CEPCO has built the performance maintenance and management system as shown in Figure 5.5-15 to ensure

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-46

the appropriate operation of the plants. Also as required, representatives of each power plant are convened to a performance improvement meeting, where participants deliberate the performance management plans and evaluate and examine the performance results for the better management of their plants.

Figure 5.5-15 CEPCO’s performance management system

Source: JICA Study Team

(4) Proposal to a certain technology transfer The establishment of the operation management technique that mentioned above is

indispensable for introduction of USC, but the establishment of long-term and continuous technology transfer scheme to ensure not only education transient for a short term such as the training in the conventional technical grant country but also a technology transfer is necessary. In addition, the evasion of the technical risk becomes indispensable when IGCC will be introduced promptly.

On the other hand, as for gas turbine combined cycle power generation facilities which equip lots of high temperature parts and need more costs and maintenance frequency than conventional BTG plants, Long Term Service Agreement (LTSA) becomes main stream in which manufacturer secures technical risks such as check, maintenance of the critical part, response at the time of the trouble.

In periodical inspection by LTSA, the instruction and the responsibility by the manufacturer’s supervisors will contribute to a certain technology transfer to owner’s maintenance workers.

For USC, the IGCC project, it is recommended to consider adoption of LTSA positively. Transfer of the operation and maintenance management technology are expected through periodical inspection, urgent maintenance check, required unscheduled shutdown and the remote supervisory monitoring of the operation, the permanent residential supports by

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-47

manufacturer’s supervisors.

In order to enjoy the merits of introducing USC, IGCC and other highly efficient power generation facilities, it is necessary to have advanced operation control technologies and ensure the appropriate maintenance and management of the facilities. To this end it is also important to start providing personnel with training, such as OJT on operation and maintenance in a planned manner from the power plant construction stage, so that they can acquire necessary technologies and know-how. Figure 5.5-16 shows a schedule (example) for the training to be provided on the construction stage.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-48

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-49

5.6 CCT Introduction Roadmap

The results of the examination made on the CCT introduction roadmap, as described in 5.2 to 5.5 are concluded as follows.

1) Technological aspect In light of the fact that the introduction of USC coal-fired power generation has been promoted

across the world with the maturity of the technologies, CCT is deemed to be a key to make economical efficiency and CO2 emission reduction compatible. It is possible to apply CCT in Indonesia in 2016.

As for IGCC, it is expected that the introduction of commercial IGCC equipment will start in and after 2020 and the technology is indeed highly promising. Before the introduction of the technology to Indonesia, it is necessary to examine the development results (construction cost) and operation results (O&M cost) in other countries. In particular, the use of low-grade coal with low ash melting points for power generation is expected, for which examinations need to be made, while avoiding technological risks by the use of LTSA.

In Japan, there is a project to construct commercial IGCC equipment in 2020. If these projects are implemented as planned, the operation of IGCC commercial equipment will be started in 2025.

2) Policy aspect Indonesia has the policy of using coal resources as the country’s main energy source and on a

long-term basis, the need for low-grade coal will increase for highly efficient coal-fired power generation.

Low-grade coal can also be used as raw fuel for IGCC, and so the introduction of CCT is in line with the governmental policy.

Moreover based on the calculation results in 5.4, it has been confirmed that CO2 reduction effects are higher for USC and IGCC than for SC and that the introduction of CCT will make contributions to GHG emission reduction.

3) Economic aspect According to coal prices in 2011, the USC power generation cost was lower than that of the

Sub-Critical and SC power generation, which has proved the economic superiority of CCT.

Because coal prices will rise in 2021, the real power generation cost will also rise in the year, but as a result of this, the economic superiority of USC and IGCC power generation for which the use of coal can be reduced compared with Sub-C and SC power generation, will become clearer. In particular if the coal heat value is 2,400 kcal per kg and coal with low ash melting points is used for power generation, the superiority of IGCC will be secured.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-50

Rational for USC/IGCC introduction in Indonesia

Alignment with Indonesia’s Policy

Economic validity

Is it possible to use low rank coal (LRC) ?→ Yes, LRC can be utilized Does it contribute to GHG emission reduction ?→ Yes, GHG emission amount will be reduced

Is USC & IGCC readily available ?→ USC: readily available, IGCC: available in 2020 When can it be introduced in Indonesia→ USC: 2017, IGCC: 2025

Is it economically viable ?→ Yes, Generation cost will be lower than Sub-c or SC

Technical availability

Target for introduction of USC and IGCC in Indonesia USC should be introduced for next new coal fired power plant project (2016) IGCC will be introduced around 2025, considering the development situation in

the world

CCT Technology for Coal Fired Power Plants

Matured technology to achieve lowelectricity costs & low GHGemissions

• Proven and already commercialized technology• Introduced all around the world• Can utilize low rank coal with above average ash melting point• Economic superiority to SC• Lower GHG emission compared to SC

Promising technology to achievelow electricity cost, lower GHG emissions & LRC utilization

• Technology yet to be commercialized• Will be introduced at the beginning of 2020s in commercial base in the world • Promising technology for low rank coal with low ash melting point• Economic superiority to SC and USC • Lower GHG emission compared to SC & USC

USC IGCC

Figure 5.6-1 Conclusion for Roadmap

Source: JICA Study Team

Figure 5-6.2 shows the CCT introduction roadmap created based on the aforementioned conclusions. The output from the development of coal-fired power generation is assumed to be 13,000 MW based on the values planned by RUPTL (for up to 2020) and on the information obtained from PLN (for five years from 2021).

The CCT proposed in the roadmap will be incorporated in RUKN and RUPTL.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 5-51

GHG Target

Promotion of CCT

PLN (MW) 660 0 1000 600 600 10003000 2000 3000 2000 3000

IPP (MW) 1660 2860 2200 2200 0 0

Coal Fired Power Plant (USC&IGCC)

Training

GHG △26% Energy Mix (Coal 33%)

1000MW Model P lant (USC) U-1

1000MW Indramayu(USC) U-1

1000MW Indramayu(USC) U-2

3000MW or 2000MW New Power Plant(USC) Each Year

COD

1000MW Class IGCC x 3

COD

COD

COD

SC: Super Critical USC: Ultra Super Critical IGCC: Integrated coal Gasification Combine Cycle COD: Commercial Operation Date

2010 2015 2020 2025

SCEfficiency 35-40%

USC Efficiency around 42% IGCC

45-49%

2 X1000MW Central Jawa(USC)COD

Introduction of CCTIntroduction of USC

O & M On-the-Job TrainingIntroduction of IGCC/A-USCO & M On-the-Job Training

Figure 5.6-2 Finalized CCT Roadmap

Source: JICA Study Team

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-1

Chapter 6 Study for model coal-fired power plant

As a supply plan for the electricity demand increase of Indonesia, the coal-fired power plant projects by the crash programs mentioned before are progressing, all power plants’ steam conditions are sub-critical or super critical. In this report, JICA study team reached a conclusion that it is very effective, from a CO2 reduction and energy consumption point of view, to construct a power plant in the future with a large capacity and high efficiency power plant in the future.

Following this conclusion, JICA study team devised a CCT road map until 2025 by applying an ultra super critical (USC) steam condition for coal-fired power plants.

Thus, JICA study team conducted preliminary feasibility study (Pre-FS) to build the next-generation

coal-fired power plant as Model Power Plant with a large capacity and high efficiency by Clean Coal

Technology (CCT).

6.1 Selection of Pre-FS site for model power plant

(1) Concept of site selection On the selection of the location for the model power plant, JICA study team carried out

investigation and examination based on the following concept.

Selecting candidate sites in overall electric power system area (Sumatra, Java-Bali, Kalimantan and Sulawesi) for model power plant

Possibility for installation of 1,000 MW power plant taking into account the situation of each electric power system area (Sumatra, Java - Bali, Kalimantan and Sulawesi) stated as bellow:

>> Current transmission line capacity >> Electricity demand prediction in the future >> Transmission line construction plan in the future Taking into consideration infrastructure in and around candidate area

In addition, JICA study team considered following essential construction conditions;

(a) If construction of new Coal-Fired Thermal Power Plant plan starts in 2012, the earliest COD will be 2021, because FS (feasibility study) and Environment Impact Assessment from 2012 to 2014, a Bidding process from 2014 to 2016 and construction time from 2017 to 2021 are necessary.

(b) To select the construction site for a model power plant, in addition to a new development site, an extension of the existing site where replacement (build & scrap) is effective by utilization of existing infrastructures should be evaluated.

(c) As a model power plant, USC Coal-Fired Power Plant 1,000 MW×1 (considering expansion in future, construction area for two units) will be studied.

(2) Selection of the site location In the selection of the site location for the model power plant, one location is selected accordance

with the following considerations.

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-2

Potential candidate sites are a new development area that PLN plans in RUPTL (2011-2020) and replacement/expansion area in existing power plants that PLN recommended

Physical availability (area of the land) for 1,000 MW power plant Natural condition / environmental condition in and around candidate site Consistency with the CCT road map which was adopted in the second steering

committee Situation of electrical power flow Consideration of environmental aspect, social aspect and construction cost,

Major specifications of the model plant decided at 2nd steering committee are as follows.

(a) Fuel; Coal (Low rank coal) (b) Steam condition; Ultra-Supercritical (USC) (c) Capacity; 1,000 MW × 1unit taking into account of possible extension of another 1,000 MW unit (d) Commercial Operation Date (COD); around 2021 (e) Site location for Model coal power plant; Java Island

(Even in the future, it is not possible to install 1,000 MW unit in the other grid system other than Java-Bali.)

(3) Selection process 1) Preliminary research

JICA study team carried out the site survey of candidate sites (cf. Table 6.1-5 and Figure 6.1-2) listed in PLN and investigated whether the model power plant is possible or not, including replacement and expansion.

(To Figure 6.1-1(2) Screening and site selection process flow)

Figure 6.1-1(1) Preliminary research on candidate site

Source: JICA study team

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2) Screening process After above preliminary research, 1st to 3rd screening was done. JICA study team proposed PLN

the screening process and screening criteria that were established based on JICA study team experience. After discussion on these matters with PLN, in the third steering committee, screening process and screening criteria was confirmed. (Refer to Figure 6.1-1 (2) Screening and site selection process flow)

From Figure 6.1-1(1))

Selection of Model power plant site by 3rd steering committee

Commencement of Pre-FS study

Technical Aspect Social AspectEnvironmental Aspect

Construction Cost

Balance of power supplyand power demand

2nd Screening

1st Screening

3rd Screening

Figure 6.1-1(2) Screening and site selection process flow

Source: JICA study team

(4) Screening criteria 1) 1st screening

The JICA study team carries out screening of the electricity supply-demand balance from the points of view listed below.

Near Jakarta (supply-demand balance) Electric Power flow Capacity and stability of transmission line Supply-demand balance in Java Island

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Table 6.1-1 1st screening criteria

(Electric power supply-demand balance)

○ △ X

West Java Yes No

Near the Jakarta less than100km

more than100km

Criteria RequirementsDefinitions

Notes

Balance of power supplyand demand

Transmissionline and grid

Developing areabalance(Balance of Stability andReliability for powertransmission)Close to the demandarea

1st screening

Source: JICA study team

2) 2nd screening Screening is done by (a) technical aspect, (b) environmental aspect and (c) social aspect in

parallel.

Table 6.1-2 2nd screening criteria

(technical, environmental and social aspect)

○ △ X

Flat and compacted Compaction Wetland,Swampy

River water( or underground water) From the river From the sea

(desalinations) not available

Sea Depth MSL-4.0m less than 1km 1 to 2km more than 2km

Sea Depth MSL-7.5m less than 2km 2 to 4km more than 4km

(Near the site) less than 20km 20 to 40km more than 40km

smooth and wide Smooth andwide narrow / bumpy Hard to access

2. 2 Environmental Aspect

2.3 Social aspect

Requirements NotesCriteriaDefinitions

Not available

* It is power block onlyavailable in projectconstruction area. Andcoal storage yard and ashpond should beconstructed at otherlocation.

Used check list below based on Table 5.1-3 Environmental impact and Social impact chck list of format for candidate sites

Used check list below based on Table 5.1-3 Environmental impact and Social impact chck list of format for candidate sites

850m(W)×1,000m(L)・Power block area: 330m(W)×1,000m(L) Major Facilities, such as Boiler and Turbine with BOP・Coal storage area:410m(W)×520m(L) Storage for 30 days (4,000kcal/kg base)・Ash pond area: 400m(W)×500m(L) Storage for at least 5 years

Topographical condition

1000MW x 2 1000MW x 1*

Distance to Cooling Water supply Intakepoint from Land

Fresh water supply

Distance to unloading Jetty from land

Distance to grid from the Site

Condition of access road to the site

Landavailability Project Complex

2.1Technical aspect

Source: JICA study team

(a) Screening from technical aspect

JICA Study Team carries out technical assessment for the candidate site which is selected in the 1st screening. The most important criteria in technical aspect is the availability of the space for model power plant, so if a candidate site does not have enough space, such candidate site will be marked “X” and rejected in the 2nd screening.

(b) and (c) Screening from environmental and social aspects

In selection of screening criteria and format, the following conditions are presupposed.

(i) Criteria and format can evaluate and compare the candidate sites properly

(ii) Screening with the criteria aims at selection of a candidate site for prefeasibility study.

(iii) Concerned Indonesian legislation and JICA Guidelines for Environmental and Social Considerations are the basic conditions for selection of the criteria

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Indonesian legislation does not specifically prescribe evaluation criteria for environmental and social considerations at this stage of project. Therefore, those criteria have been given considerations to involve important items for environmental conservation that are indicated by the basic Indonesian laws concerned, ‘the Law on environmental protection and management (No. 32 of 2009)’ and ‘the Law on Spatial Planning (No. 26 of 2007)’. Namely, the criteria include the items which should be able to check potential impacts on carrying capacity of regional environment; environmental impacts and risks; ecosystem service; resilience and potential of biological diversity; and compliance with spatial plan.

On selection of checklists for comparing candidate sites, the following guides in JICA Guidelines for Environmental and Social Considerations (April, 2004) have been used as the benchmark.

Those are Appendix 2: Illustrative List of Sensitive Sectors, Characteristics, and Areas; Appendix 3: Screening Format, annex to the Guidelines. With the considerations above, the following table has been formed as the screening format for

the specific purpose.

Table 6.1-3 Environmental and Social Screening format for comparison of candidate sites

Criteria Sub criteria Check items Compliance with spatial plan

---------- ☐Land use and utilization of local resources ☐Poor, indigenous, or ethnic people

☐Protected area ☐Cultural heritage ☐Other ( Items prescribed in local spatial plan ) Environmental impacts Terrestrial impacts ☐Naturally fragile area*

☐Geographical features ☐Biota and ecosystems ☐Ground subsidence Maritime impacts ☐Geographical features ☐Biota and ecosystems ☐Land reclamation ☐Bottom sediment ☐Water pollution Coal and ash pollution ---------- Social impacts Resettlement and land

☐Involuntary resettlement (scale: households) Existence of residential area

in vicinity and pollution impacts

☐Air pollution ☐Noise and vibrations ☐Offensive odors Adverse impacts on

local economies, resources and infrastructures

☐Water usage ☐Local economies, such as employment, livelihood, etc. ☐Industries, such as fisheries and agriculture ☐Existing social infrastructures and services ☐Misdistribution of benefits and damages ☐Other ( )

Source: JICA study team

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The criteria below is to be used to make evaluation of selected criteria, sub-criteria and checked items.

A X Potentially large scale of adverse impacts will be projected. EIA study and significant mitigation measures will be necessary.

B △ Potentially medium or small scale of adverse impacts will be projected. IEE study and mitigation measures will be necessary.

C △ There is possibility of adverse impacts, the scale and mode of which are yet unknown. Further study and analysis will be necessary.

D ○ Adverse impacts with the project will be minimal or negligible. Further consideration on the items concerned will not be necessary.

Source: JICA study team

3) 3rd screening (Construction cost) JICA Study Team selects one site by carrying out an assessment about construction cost of

candidate site which is qualified at the 2nd screening

Table 6.1-4 3rd Screening in Construction cost

L (Low)

M(Medium)

H(High)

3rd screening

Land preparation

- Land filling Less than 3mlandfilling

more than 3mlandfiling

- Improvement of land Compactionarea Wetland Swampy area

- Soil transportation Less than 20km 20 to 50km More than 50km

- Access road to the site from main road Smooth andwide Narrow Narrow and

bumpy

Facility

- Power block

- Jetty Less than 2km 2 to 3 km More than 3km

Minimum Distance (straight route from the Site)

Less than 20km 20 to 30km More than 30km

Necessity of substationCan useexisting

substation

Need toconstruct new

substation

Notes

Power Plant

Definitions

Transmission line

Construction Cost

Criteria Cost Item

In case of Green field project, power block cost is no significant difference.

Source: JICA study team

(5) Summary of the model power plant site There are 11 model power plant sites which were proposed by PLN. The Sites and Locations are

shown in Table 6.1.5 and Figure 6.1.2.

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Table 6.1-5 List of model power plant sites

Source: JICA study team

Suralaya

Tanjung Puyut Bojonegara

Muara Karang

Muara Gembong Tanjung Pakis

Tanjung Sedari

Tanjung Jati B

GresikTanjung Perak

Paiton

Suralaya

Tanjung Puyut Bojonegara

Muara Karang

Muara Gembong Tanjung Pakis

Tanjung Sedari

Tanjung Jati B

GresikTanjung Perak

Paiton

Figure 6.1-2 Model power plant sites

Source: JICA study team

(6) Selection of Pre-FS site 1) Evaluation result

Table 6.1-6 shows the result of 1st screening (evaluation on electric power supply-demand balance). Table6.1-7 shows the result of 2nd screening (evaluation on technical, environmental and social aspects). Table 6.1-8 shows the result of 3rd screening (relative evaluation on construction costs).

Name of listed site Location of site Category Existing capacity Owner Demand area Area dimension

1 Bojonegara Banten prefecture, North West and 100km from Jakarta city Green Field None None Jakarta 1040m x 1500m(156ha)

2 Tanjung Puyut Banten prefecture, North West and 120km from Jakarta city Green Field None None Jakarta 600m x 1200m(64ha)

3 Muara Gembong Bekasi, Jawa Barat Province, 85km from Jakarta city Green Field None None Jakarta 1000m x 2000m(200ha)

4 Paiton Extension 100km North East from Surabaya city Extension 400MW x 2 (1&2)660MW x 1(#9) PLN Surabaya 350mx 400m

5 Tanjung Jati B Extension 100km North East from Semarang city Extension 660MW x 2 (3&4) PLN Semarang 200m x 600m+100m x 500m

6 Suralaya Power Plantsfor Unit 1&2 Banten prefecture, North West and 130km from Jakarta city Replacement

400MW x 2 (1&2)Coal400MW x 2 (3&4)Coal600MW x 3 (5-7)Coal

PLN Jakarta 150m x 400m

7 Gresic for 3 GTG and 2 oil PP 50km North West from Surabaya city Replacement

20MW x 3 (GTG)100MW x 2 (1 & 2 Oil)200MW x 2 (3 & 4 Oil/Gas)500MW x 3 (CCGT)

PLN Surabaya400m x 500m+400m x 200m +350m x 900m

8 Tanjung Perak for unit 1 & 2 10km North West from Surabaya city Replacement 25MW x 2 (1&2)50MW x 2 (3&4) PLN Surabaya 98m x 123m

9 Muara Karang for unit 3 & 4 Pluyit district, 10km North from Jakarta city Replacement500MW+70MWx3 (2GT+3ST)200MWx 2 (3&4) Oil107MWx3+185MW x1(3GT+1ST)

PLN Jakarta 120m x 280m+100m x 255m

10 Tanjung Pakis 90km North East from Jakarta city Green Field None None Jakarta 1000m x 2000m(200ha)

11 Tanjung Sedari 100km North East from Jakarta city Green Field None None Jakarta 1000m x 2000m(200ha)

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(a) 1st screening result

Table 6.1-6 1st screening result (evaluation in electric power supply-demand balance)

Tanjung TanjungPakis Sedari

Criteria Sub-criteria Sub-sub criteriaDeveloping area balance(Balance of Stability and Reliability forpower transmission)

○ X ○ ○ ○ ○ ○ X X ○ X X ○

Close to the demand area ○△X ○ ○ ○ ○ ○ X X ○ X X ○

ReplacementCandidate Sites Bojonegara Tanjung

PuyutMuaraGembong Paiton Tanjung

Jati BMuaraKarang

Site category Extension

Pre-Condition (1000MW x 2) & USC with Coal fired Grading

Green field

Transmission lineand grid

Balance ofpower supplyand demand

TanjungPerakGresikSuralaya

Source: JICA study team

In the 1st screening, candidate site marked “X” was rejected, thus the amount of candidate sites was reduced narrowed from 11 to seven. These seven candidate sites were evaluated in the 2nd screening.

(b) 2nd screening result

Four candidate sites were rejected in the 1st screening, and remaining (seven sites) were evaluated on technical, environmental and social aspects.

Table 6.1-7 2nd screening result (Evaluation in technical, environmental and social aspect)

Candidate Sites

Pre-Condition

GradingCriteria Sub-criteria Sub-sub criteria

Land availability Project Complex ○△X ○ X ○ ○ ○ X X

Topographical condition ○△X △ ○ △ △ △ ○ ○

Fresh water supply ○△X △ △ △ △ △ △ △

Distance to Cooling Watersupply Intake point fromL d

○△X △ ○ △ △ △ ○ ○

Distance to unloading Jettyfrom land ○△X △ △ △ △ △ △ △

Distance to grid from theSite

○△X ○ ○ ○ ○ ○ ○ ○

Condition of access road tothe site

○△X ○ ○ △ △ △ △ △

Terrestrial impacts A,B,C,D B A A B A D D

Maritime impacts A,B,C,D B B B B B C B

Coal and Ash pollution A,B,C,D C C C C C C B

Resettlement and landacquisition A,B,C,D C B D B C D D

Existence of residentialarea in vicinity and pollutionimpacts

A,B,C,D B C B B B C A

Adverse impacts on localeconomies, resources andinfrastructures

A,B,C,D C C A B C C B

b) EnvironmentalAspect

c) Social Aspect

Suralaya GresikPaiton

a) Technical Aspect

TanjungPerak

TanjungPuyut

MuaraGembongBojonegara Tanjung

PakisTanjung

Jati BMuaraKarang

TanjungSedari

Source: JICA study team

Table 6.1-8 Legend of the result of evaluation in environmental and social aspect

A X Potentially large scale of adverse impacts will be projected. EIA study and significant mitigation measures will be necessary.

B △ Potentially medium or small scale of adverse impacts will be projected. IEE study and mitigation measures will be necessary.

C △ There is possibility of adverse impacts, the scale and mode of which are yet unknown. Further study and analysis will be necessary.

D ○ Adverse impacts with the project will be minimal or negligible. Further consideration on the items concerned will not be necessary.

Source: JICA study team

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In the 2nd screening, three candidate sites did not have not available space for the model power plant. These three sites were rejected and remaining (four sites) were evaluated in the 3rd screening.

(c) 3rd screening result

Table 6.1-9 3rd screening result (Relative evaluation in construction cost)

Candidate Sites

Pre-Condition

GradingCriteria Topographical condition

Power Plant Land preparation

- Land filling L M H L M M M

- Improvement of land L M H M H H H

- Soil transportation L M H L H H H

- Access road to the site from main road L M H L H M H

Facility

- Power block L M H

- Jetty L M H M M M M

Transmission line Minimum Distance(straight route from the Site) L M H M M M M

Necessity of substation L M H H H H H

Construction Cost

Suralaya GresikBojonegara MuaraGembong Tanjung Perak Muara Karang

TanjungPuyut

TanjungPakis

TanjungSedari Paiton Tanjung Jati B

In case of Green field project, power block cost is no significant difference.In case of Green field project, power block cost is no significant difference.

Source: JICA study team

Evaluation in 3rd screening:

Regarding the cost of each candidate sites for power plant equipments such as Boiler, Turbine, Generator with auxiliaries, BOP, environment protection facilities and coal handling equipment etc., there are no differences between the four candidate sites under the same conditions (same capacity and using same coal). So, JICA study team evaluated other construction costs which have impacts such as a jetty, trestle, transmission line.

For environmental protection facilities (such as a waste water treatment system, noise reduction facilities, flue gas treatment equipment etc.), there is no difference between the four candidate sites under the same conditions (same capacity and using same coal). Other mitigation measure will be specified in the FS stage, so in this Pre-FS, such measures are not considered in financial cost.

In addition, construction of the model power plant effects the local economy. Positive effects include job creation, positive economic effects by local procurement, and promotion of the infrastructure development. On the other hand, negative effects include an impact on tourism from a change of landscape, an increase in land and sea traffic, and an effect of maritime transportation by jetty and trestle. However, for the four candidate sites which passed the 2nd screening, the effects mentioned above are almost same as there are no significant differences.

Through these screenings, in the 1st screening the 11 candidate were reduced to seven, then in the 2nd screening to four, and finally in the 3rd screening the four sites were evaluated on their construction costs.

As a result of above evaluation, JICA Study Team selected Bojonegara.

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(d) Compiled result

Table 6.1-10 Compiled result 1st Screening

Criteria Sub-criteria Sub-sub criteria

Developing area balance(Balance of Stability and Reliability for powertransmission)

○ X ○ ○ ○ ○ ○ X X ○ X X ○

Close to the demand area ○△X ○ ○ ○ ○ ○ X X ○ X X ○

2nd ScreeningCandidate Sites

Pre-Condition

GradingCriteria Sub-criteria Sub-sub criteria

Land availability Project Complex ○△X ○ X ○ ○ ○ X X

Topographical condition ○△X △ ○ △ △ △ ○ ○

Fresh water supply ○△X △ △ △ △ △ △ △

Distance to Cooling Watersupply Intake point from ○△X △ ○ △ △ △ ○ ○

Distance to unloading Jettyfrom land ○△X △ △ △ △ △ △ △

Distance to grid from theSite

○△X ○ ○ ○ ○ ○ ○ ○

Condition of access road tothe site

○△X ○ ○ △ △ △ △ △

Terrestrial impacts A,B,C,D B A A B A D D

Maritime impacts A,B,C,D B B B B B C B

Coal and Ash pollution A,B,C,D C C C C C C B

Resettlement and landacquisition A,B,C,D C B D B C D D

Existence of residentialarea in vicinity and pollutionimpacts

A,B,C,D B C B B B C A

Adverse impacts on localeconomies, resources andinfrastructures

A,B,C,D C C A B C C B

3rd ScreeningCandidate Sites

Pre-Condition

GradingCriteria Topographical condition

Power Plant Land preparation

- Land filling L M H L M M M

- Improvement of land L M H M H H H

- Soil transportation L M H L H H H

- Access road to the site from main road L M H L H M H

Facility

- Power block L M H

- Jetty L M H M M M M

Transmission line Minimum Distance(straight route from the Site) L M H M M M M

Necessity of substation L M H H H H H

1 3 2 3

Balance of powersupply anddemand

10.

b) EnvironmentalAspect

c) Social Aspect

Pre-Condition (1000MW x 2) & USC with Coal fired

Suralaya GresikPaiton

Transmission line andgrid

ReplacementCandidate Sites 1. 2. 3. 6.5.4.

BojonegaraTanjungPuyut

9.8.7.

Ranking

a) Technical Aspect

Construction Cost

11.Site category Extension

TanjungPerak

Grading

Green field

TanjungPuyut

GresikTanjungPerak

MuaraKarang

Suralaya GresikBojonegara MuaraGembong

MuaraGembongBojonegara Tanjung

Pakis

MuaraGembong

TanjungPakis

TanjungSedari

PaitonTanjungJati B

Suralaya

Tanjung Perak Muara KarangTanjung

PuyutTanjung

PakisTanjungSedari

TanjungJati B

Paiton Tanjung Jati B

MuaraKarang

TanjungSedari

In case of Green field project, power block cost is no significant difference.

RESULT: 11Locations to 7 Locations

RESULT: 7 Locations to 4 Locations

RESULT: 4 Locations to 1 Location

RESULT: Bojonegara

In case of Green field project, power block cost is no significant difference.

Source: JICA study team

PLN proposed to carry out Pre FS for one site of three candidate sites (PLN needs new power sources from a Coal Fired Thermal Power Plant in the suburbs of Jakarta), Muara Gembong, Tanjung Pakis and Tanjung Sedari, all of which were not selected because of their construction cost.

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2) Layout of Power plant Schematic of USC Coal-Fired Thermal Power Plant (1,000 MW × 2u) is as follows:

Figure 6.1-3 Schematic of USC Coal-Fired Thermal Power Plant (1,000 MW × 2u)

Source: JICA study team

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(7) Procedure of the environmental and social considerations study to come The Study concerned is a prefeasibility study (pre-FS) for the construction plan of a coal-fired

power plant. For environmental and social considerations, JICA has conducted an initial environmental examination (IEE) study in parallel with the engineering study.

Since Indonesian regulations regarding environmental impact assessment (AMDAL) does not contain provisions for initial environmental examination/evaluation (IEE) study, the IEE is not conducted in Indonesia. On the other hand, when JICA assists this study, JICA also need to conduct the IEE study in assistance for environmental and social considerations (ESC) of the Indonesian side, according to the policy of JICA Guidelines for Environmental and Social Considerations. In the IEE study, with collection of baseline data and secondary reference documents, environmental impacts are identified. Then, basic mitigation measures and monitoring policy are examined so that the IEE study may play the scoping role for the EIA/AMDAL study.

In the next stage of this study, if the project proceeds to the feasibility (FS) study, the proponent of the project on the Indonesian side should conduct an environmental impact assessment, called AMDAL in Indonesia, to obtain permission to implement the project as required by Indonesian legislation. In the AMDAL stage, along with the progress of basic design of the project, a more quantitative approach will be taken for impact evaluation and environmental management and monitoring plans will be required of preparation. AMDAL also requires stakeholders meetings and consultation to explain about the project and build consensus among concerned people. JICA might continue to assist the EIA study.

1) Preliminary scoping Prior to entering the Pre-FS study, for the purpose of determining the study scope of IEE study,

potential impacts that might be caused by the proposed project have been analyzed as the following table.

Table 6.1-11 Scoping for determination of the IEE study scope at the Pre-FS study

A Potentially large scale of adverse impacts will be projected. B Potentially medium or small scale of adverse impacts will be projected. C There is possibility of adverse impacts, the scale and mode of which are yet unknown. D Adverse impacts with the project will be minimal or negligible.

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Criteria Check Items Potential Impacts Points to check

Compliance with

spatial plan

☐ Land use and utilization of local resources C

The site is located in Jababeka industrial estate, located in industrial area designated as special economic zone by Serang district and Banten province spatial plans.

The site is owned by PLN. Before PLN’s acquisition, there used to be

fish ponds widely. Material for land reclamation will be brought

from operating borrowing sites in the Peninsula.

☐ Poor, indigenous, or ethnic people C

Minorities and indigenous people do not reside in the neighbor area.

Fishermen and farmers from outside the site currently continue their activity in the PLN site and industrial area, with temporary houses and boats, fish ponds and farmlands. However, those are unauthorized and temporal activities.

☐ Protected area C

Land area around the site is no protected area. Offshore bay area is designated as marine

conservation area by the provincial spatial plan, but not by district spatial plan.

☐ Cultural heritage C Will be studied around the site. A religious pilgrimage site located in a neighbor hilltop.

☐ Other (Items prescribed in local spatial plan ) C

Need to check compliance with district, provincial and national spatial plans.

Those spatial plans are not always in agreement with each other. For example, the Banten Bay is conservation area in the provincial plan, but not in district plan.

Environmental Impacts

Terrestrial impact

☐ Naturally sensitive area B

Low-lying wetland Small scale mangrove around the mouse of

the river neighboring to the south border of site

☐ Geographical features B

Site area is around 160 – 170 ha Land filling of 2-3 m for site reclamation

(with material transported from nearby borrowing areas)

☐ Biota and ecosystems B

Site is inside an industrial estate and owned by PLN

Site is covered with ex-paddy field and old fish ponds, with no primary natural forest remaining

Small-scale fishery and dispersed small community of birds around the mouth of adjacent river and offshore

☐ Ground subsidence C

Currently unknown Water usage by the project and civil survey

will be studied and referred to

Marine impact

☐ Coastal & offshore hydro-geography

B Site is located at closed-off section of

mildly-curved bay, and facing sea with a long shoal, so offshore current might be disrupted

☐ Biota and ecosystems B

3 ha of coral reef around 2 km offshore from the mouth of river on the southern border of the site, according to local fishermen

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Criteria Check Items Potential Impacts Points to check

☐ Reclamation and dredging C

3-4 km of jetty for coal unloading need to be stuck out to offshore

Small-scale dredging for jetty is needed ☐ Bottom sediment B Sea bottom is sandy

☐ Water pollution B

Thermal wastewater might be slow to disperse because of hydro-geographic conditions

Outlet of thermal wastewater need to stick out distant offshore

Coal and ash

pollution ---------- C

Shield of ash pond as mitigation required Elongation (keep-distance) of ash pond from

river and shore line with greenbelt is necessary Note: ‘Naturally sensitive area’ include, with reference to the screening format of JICA Guidelines for Environmental and Social Considerations, 1) Primeval forests, tropical natural forests, 2) Ecologically important habitats (coral reefs, mangrove wetlands, tidal flats, etc.), 3) Habitats of endangered species for which protection is required under local laws and/or international treaties, 4) Areas that run the risk of a large scale increase in soil salinity or soil erosion, and 5) Remarkable desertification areas.

Criteria Sub-criteria Check Items Potential Impacts Points to check

Social Impacts

Resettlement and land

acquisition

☐ Involuntary resettlement (scale: households)

C

Site is owned by PLN for power plant facility, no authorized residents in the site

Currently, unauthorized former local farmers and fish pond activities are sighted on site

A few hundreds of temporary houses and fishing boats for unauthorized dwellers on the south of adjacent river, where the area is also inside an industrial estate.

Existence of residential area in vicinity and

pollution impacts

☐ Air pollution B

Ciregon City (4 km from the site and population of 3 hundred thousand), Jakarta (80 km from the site)

Assumed stack height is 250∓30m Distance of maximum ground concentration

is between 10 and 50 km away

☐ Noise and vibrations B

Around 100s of temporary houses on the south bank of the adjacent river

Those houses are with no legal status, and will be required to move out.

☐ Offensive odors D Offensive odor is not expected, with

reference to the case of existing plant at Sulalaya coal-fired power plant.

Adverse impacts on

local economies, resources

and infrastructures

☐ Water usage C Source of cooling water is under study

whether taken from groundwater or seawater desalination

☐ Local economies, such as employment, livelihood, etc.

D

Impact on local economy, specifically fishery, need to be studied

☐ Land use, local industry and utilization of local resources such as agriculture and fishery

B

Impacts on small-scale gill-net or set-net fisheries, fishpond and aquaculture

The site and surrounding areas are widely designated as industrial areas by district spatial plan. Temporally unauthorized framing activities will need to close down.

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Criteria Sub-criteria Check Items Potential Impacts Points to check

☐ Existing social infrastructures and services

C

A local paved arterial road is passing along the site. Specific access road to the site is not necessary.

Impacts on existing infrastructure and public services are not expected

Basic regulation regarding maritime transport and nearby port facility will be studied

☐ Misdistribution of benefits and

damages C

Local livelihood will be studied.

☐ Other ( )

2) Outline of the IEE Study

The IEE Study should contain the following contents. The Study is commissioned to an Indonesian based study institute, especially for the baseline survey including on-site survey and data collection and measurement of data. The detailed terms of reference are attached to the end of this report as Annex 1, which to be refereed to if necessary.

① Study to confirm compliance of potential development sites with spatial plan being in force or

planned by pertinent local governments The potential-development-plan’s compliance and legitimacy with the concerned spatial plan that

are being in force or planned by pertinent local government should be confirmed. The below four (4) sites should be checked about compliance with the respective spatial plans concerned, which have been selected from the eleven (11) candidate sites for a model power plant by the first screening of ‘power demand and supply balance’ and the secondary screening of technical aspects.

a) Bojonegara b) Muara Gembong c) Tanjung Pakis d) Tanjun Sedari

② Initial Environmental Examination (IEE) study The candidate site for the model power plant was decided on the Bojonegara candidate site with the

said screenings from technical, economical environmental and social aspects. The IEE Study shall follow the AMDAL related regulations of GOI, JICA Guidelines for

Environmental and Social Considerations. Though the AMDAL regulations do not contain corresponding provisions to ‘IEE Study’, Indonesian national and local regulations should be referred to for the environmental standards. The contents and scope of the Study should follow the guide on ‘IEE level study’ of JICA Guidelines for ESCs.

Site to study: on and around the Bojonegara candidate site Study scope:

a) On-site survey Topography, geological formation and land use pattern, on and surrounding the assumed

development site

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Hydrological and oceanographic formation on and around the site, both terrestrial and maritime

Fauna and flora distribution around the site, specifying protected rare species if any Living conditions and demographic distribution of inhabitants National parks, protected areas cultural assets within the range of fifty (50) km from the

assumed site Other environmental conditions to be noted from the view of environmental conservation Approximate number of houses to be resettled if the proposed plan is implemented

b) Literature (Off-Site) Study on existing reference datum Topographic and oceanographic map, and distribution maps for the items listed on a) above,

of the site and surrounding Statistics and observation data of weather conditions, especially temperature, wind and

precipitation pattern and history of natural disasters

c) Measurements of baseline data for air and water quality, and noise/vibration The measurement and analysis study will be conducted on the below parameters and

locations twice during the Study period, possibly one in dry season and another in rainy season. The measurement method and standards to interpret the measured data should refer to the Indonesian pertinent regulations. Items of measurement: Ambient air quality SOx (SO2) / NOx / CO / O3 / Dust (SPM) Water quality in adjacent water channel and near shore

pH/ SS/ BOD/ COD/ DO/ NH3/ TN/ TP/ Phenol/ Oil and Grease/ and Heavy Metals (including Cd/ Cr/ Cu/ Hg/ Mn/ Ni/ Sn/ Zn)

Noise and Vibration [LAeq-16h] at daytime (6:00-22:00) and [LAeq-8h] at night (22:00-6:00) Sampling points:(Tentative location to be assumed at the current study stage) Ambient air quality/ 5 locations

at 1) the assumed project site, 2) locations of 10 km and 30 km downwind from the project site; 3) two (2) different residential areas downwind and adjacent to the site, properly distant from each other

Water quality in adjacent water channel and near shore/ 4locations at 1) assumed inlet point of water intake, 2) assumed outlet point of thermal water discharge; 3) the head of assumed Jetty where the sea depth will be around 8 meter and dredging be assumed; 4) sea water downstream side of assumed coal ash disposal site

Noise and Vibration/ 5locations

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at 1) the center of assumed project site, 2) the assumed site borders (two(2) locations downwind and upwind of the assumed site center), 3) two (2) different residential areas nearest to the site

d) Initial examination of potential environmental impacts and mitigation measures

This examination should be made in consideration of GOI regulations and the Checklist of JICA Guidelines for ESC, concerned with ‘2.Thermal Power Station’ at http://www.jica.go.jp/english/operations/social_environmental/guideline/ref.html.

Major plant components are assumed at present as follows; Onshore structure: Power block with Turbine and Boiler Emission gas stack and Cooling tower Coal storage area, Fly ash disposal area, Wastewater treatment facility, etc. Offshore structure: Coal unloading jetty Water intake, Discharge, etc

3) Stakeholders meeting

Through this whole study, three stakeholders meeting were held. Meetings were hosted by the DGE of MEMR. Purpose, agenda, participant and contents of the meetings are summarized below. (a) First stakeholders meeting, 26 April 2011 (10:00 - 12:00) at the time of Inception Report

The objective of meeting was to discuss about and agree with the scope and approach of the entire study, which consists of the preparation of CCT-introduction roadmap and a Pre-FS study for a model coal-fired power plant, among Indonesian counterpart organs (MEMR and PLN), environmental agency (MOE), planning agency(BAPPENAS) and Japanese organs (Embassy and JICA).

Agenda of the meeting i) Outline of the study (1 hr) with presentation by JICA Study Team and discussion among

articipants ii) Scoping of the ESC study (0.5 hr) with presentation by JICA Study Team and discussion among

participants Participants MEMR 7 (DGE 6, DGMC 1), PLN 4, Business (PT.IP) 1 Embassy of Japan 1, JICA 2, JICA Study Team 7 In the meeting, the following Q&A was exchanged. Q1. In CCT-introduction roadmap preparation, will you study several alternatives before selection

of optimal technology?

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A1. In the roadmap study, we had comparison of SC-type, USC-type and IGCC power plants and pro-and-cons for various calories of fuel coals regarding amount of resource, technological maturity and cost competitiveness.

Q2. Several Japanese organizations like NEDO and JCOAL are also holding relevant seminars on CCT. Why not hold a joint seminar so as not to lead overlapping and discrepancy?

A2. Communications about CCT with NEDO and JCOAL were made during the course of project formulation of the Study and will be kept on after this commencement of the Study.

Feedback to the study i) A1 above were studied in the formulation of CCT-introduction roadmap. The CCT-introduction

roadmap was formulated in July 2011 and concluded that CCT technology would be introduced first with a USC-type plant most likely from 2017 and then facilitated with IGCC-type whose commercial plant would start operation around 2023 to 2025.

ii) Based on the request of Q2 above, a joint seminar with NEDO on CCT was held in the late November, 2011.

(b) Second stakeholders meeting, 16 February 2012 ( 10:00-12:30) at the start of Pre-FS study

The purpose of second meeting was to discuss about and agree with the study scope and approach of Pre-FS and IEE study regarding the model coal-fired power plant at Bojonegara Site, after brief review of the study in the first stage on CCT-Introduction-roadmap and site selection process for the Pre-FS study, among invitees of the first meeting as well as local governments concerned with Bojonegara.

Agenda of the meeting i) Outline of the CCT-introduction roadmap and the site selection of the prefeasibility study for a

model power plant (1/3 hr), with presentation by PLN ii) Outline of the Pre-FS for a model power plant at Bojonegara (1/3 hr), with presentation by

JICA Study Team iii) Outline of the IEE study for a model power plant at Bojonegara (1/3 hr), with presentation by

JICA Study Team iv) Questions and Answers (1/2 hr) with discussion among participants Participants MEMR 9, PLN 2, DEN 3, MOE 1, MOF 1, EKON 1, Business 4 (PT.IP 2, PT. Indramayu 1, ICMA 1) JICA 1, JICA Study Team 7 In the meeting, the following Q&A was exchanged.

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Q1. Several technical inquiries were made such as on supplier country of boilers, advanced technology but with high cost load, applicability of low-rank coal and the needs of upgrading transmission line.

A1. Supplier is Germany like Siemens and Japan. IGCC is expected to be commercialized by 2020, then price goes down. Low rank coal is applicable. Transmission capacity is under consideration of upgrading or identifying an alternative route.

Q2. Does the project site conform to the strategic economic zone of upper level plans? A2. (It was not clearly answered on site. But later it is found to be in the strategic economic zone

Bojonegara Q3. Bojonegara is near national forest. It must be taken into consideration. A3. Yes, we consider. (Later it was taken into mitigation, though the current status of national

forest is mostly cultivated and become plantation. Q4. Is offshore reclamation necessary, and will the marine environmental assessment be

conducted? A4. Necessity of offshore reclamation is being examined in Pre-FS, however the detail survey for

its necessity will be done in the FS study. Q5. In AMDAL, environmental regulations of concerned local government need to be checked in

detail. A5. We understood it. AMDAL will be conducted in FS stage. In IEE, we checked spatial plans

that are the basic upper-level plan. Q6. Is De-NOx system required for the model plant? A6. Low-NOx burner and combustion method will be applied. However, whether it is sufficient

for emission standard or not will be examined in FS. Feedback to the study i) Q1 was about technical questions. Those were answered instantly by PLN in the meeting and

later discussed in the Report. ii) Q2 was not answered in the meeting. But later it was found that the answer is positive. iii) Q3 are answered in the sections of this Report on ‘impacts’ and ‘mitigation’ of IEE study. iv) Regarding Q4, the Report in Table 6.2.23 recommends to conduct offshore assessment in EIA

study during the FS study, where the necessity of offshore reclamation will be judged. v) For Q5, it will definitely be done in AMDAL. vi) Q6 were answered directly in the meeting, and the Report described on A6 in Section 6.2

(3)-2)-(d). (c) Third stakeholders meeting, 12 June 2012 (13:30-15:00) at the time of Draft Final Report

The purpose of third meeting will be to share the results of Pre-FS study and IEE study on model coal-fired power plant, and discuss how stakeholders think about the effects and impacts of CCT type coal-fired power plant, with local stakeholders together with MEMR, PLN and other related

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government agency. Proposed invitees included BAPPEDA (Planning Agency) and BLHD (Environmental Agency) of Province Banten and District Serang which administers the locality of Bojonegara; Academics, Business and locally active NGOs; as well as concerned central governments and Japanese concerned organizations.

Agenda of the meeting i) The Pre-FS Study for the Bojonegara plan (1/3 hr), with presentation by JICA Study Team - Natural Background (Topography and Landuse)

- Layout of facilities ii) The IEE study for the Bojonegara plan (1/3 hr), with presentation by JICA Study Team - Potential impacts and Mitigation to be taken

- ESC procedure in the later stage iii) Questions and Answers (1/2 hr) with facilitation by Environmental Office of PLN and

discussion among participants Participants MEMR 13 (DGE 10, DGMC 3), PLN 9, DEN 1 JICA 1, JICA Study Team 10 In the meeting, the following Q&A was exchanged. Q1: For a reference to the study, there was an incidence of protest on power plant by fishing

community in Central Java project last month. They state that the power plant in the area has violated the rules of the area where there are coral reefs (designated as a marine park) and damaged the coral reefs. The lesson should be noted to avoid an awkward situation in project implementation.

A1: It is noted and will be reffered in the FS study stage, especially in clarification of marine spatial plan.

Q2: It is recommended that the EIA study should be conducted in conjunction with the FS study so that the FS contents can accommodate the requirements of EIA.

A2: EIA studies are usually initiated while 50% of FS study is done. Because the EIA study must refer to the FS.

Q3: Applicable provisions of regulations be considered for leachate from coal stockpile and ash disposal area. Also more attention is needed to flue-gas desulfurization system (FGD) if it is wet type.

A3: Waste water treatment plant will be managed based on closed system. For FGD, the type to be used (wet system or dry system) is not yet decided.

Q4: As a feedback to the study, the environmental management in Indonesia are grouped based on air pollution control, water pollution control, and hazardous waste management. Besides those, issues need not be repeated in assessment like in the slides of 12 and 22, which can be unified.

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Make sure that the design of power plant in Bojonegara adopts the MEMR regulation (No.1457.K/28/MEM/ 2000) that set criteria on the layout of power plant. For example, in this regulation, there is a reference for distance of ash disposal area from water bodies etc.

A4: Okay, thank you for your information, we will check that. Feedback to the plan i) For Q1, as answered in A1, the Report indicated in Table 6.2.23 to confirm the status of marine

spatial plan and conservation area with the concerned local governments. ii) Q2 advice was noted by PLN, the supposed project proponent responsible to implement the

EIA (AMDAL). iii) PLN is fully aware of the importance of Q3 issues and those will be examined carefully in the

FS/EIA stage. iv) For Q4, as answered in A4, the relevant regulations will be referred in the FS/EIA and Table

6.2.23 of the Report required of checking the regulations for ash disposal area in the early stage of FS/EIA.

Follow-up visit of concerned local governments The concerned local governments that were invited to the stakeholders meeting have not actually attended the meeting. Therefore, with the consent of MEMR and PLN, PLN and the JICA Study Team visited the concerned organizations and shared the related information on 19 June 2012. Those organizations visited are as follows:

1. BAPPEDA of Banten Province 2. BAPPEDA of Serang District (Kabupaten) 3. BLHD (Regional Environmental Management Agency) of Banten Province 4. BLHD of Serang District

All of the four organizations basically welcomed the visit and explanation about the project plan though they at a time regretted their absence at the Stakeholders Meeting held on 12 June 2012. They also expressed that the concerned plan comply with their spatial plans of province/district. They added that they would expect the project explanation about the tangible plan with an authorization letter of MEMR at an early stage of the following study for the plan, and that those explanations should be conveyed to BAPPEDA, BLHD and Dinas Energy, respectively to the province and district.

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6.2 Outline of the Pre-FS

(1) Introduction 1) Background of the Model Power Plant

As one of the potential plant sites, Bojonegara was selected to enhance the power generation capacity of the country by starting the commercial operations between 2020 and 2021. The detailed screening process to identify Bojonegara and the applied technology (Ultra Super Critical steam condition) is discussed in Main Report of JICA Study Team. Before making the final decision to construct a power plant in Bojonegara, the preliminary feasibility study (hereinafter “pre-FS”) is conducted in order to roughly examine the feasibility of this power plant. In the following section, the potential power plant in Bojonegara was called a “Model Power Plant”.

2) Outline of the Model Power Plant The Model Power Plant will develop a 1,000 MW × 1 unit Coal-Fired Thermal Power Plant and

additional 1,000 MW × 1 unit in the future. This Model Power Plant is to use a high-technology Ultra Super Critical (USC) steam condition, and USC steam condition of the Model Power Plant is a temperature of 600°C/620°C pressure and 25.0 MPa at a steam turbine inlet. The location of Model Power Plant is Java and is designed to deliver 1,000 MW to the PLN 500 kV transmission line though a 500 kV substation that will be constructed in the power plant.

In addition, Indonesian domestic Low Rank Coal (LRC) is planned to be used for the Model Power Plant with a calorific value of 4,000 kcal/kg. And as for the power plant efficiency: as for 40% (HHV), Boiler efficiency at more than 84% and a 47% turbine thermal efficiency is schedule for the above.

3) Outline of Project Site The gross area of model power plant is 173.3ha: 60% is a swampy area, and the remaining 40%

is lowlands and mangrove forests.

The submarine slope from the seashore is very shallow, and it is possible to take about 7 m in depth gradually in the 2.5-3.0 km offshore.

Coal is transported from Sumatra or Kalimantan by a 13,000 t coal vessel or coal barge.

A HV transmutation grid of 500 kV Transmission towers is near the site area.

(2) Site Conditions 1) Site Location

The selected study site is owned by PT. PLN (State Owned Electric Company), located in Terate Village, Kramatwatu Sub-District, Serang District of Banten Province and part of the Jababeka Industrial Estate.

The study site is located at latitude 6° 00' South and Longitude 106º 06' West, approximately 103 km (86 km linier) west far from the capital city of Jakarta, with an approximate traveling time of two hours by car. The location map of the area is shown below.

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Figure 6.2-1 Site Location Map

Source: JICA Study Team

2) Topographic Conditions (a) General Conditions

In general, the location of the work lies in at latitude 6°00' South and Longitude 106º06' West, with common, flat topography with a height of approximately 2.0 m above the mean sea level, consisting of a 60% fishpond area while 40% of the area is paddy fields and dry land.

(b) Site Boundaries

Site Boundary was subjected on the land property of PT. PLN, therefore the survey was conducted by identifying each existing boundary marking for CCT Model Power Plant including the boundary area of PT. PLN property.

The location is situated with in the natural boundary of the shoreline on east side and a river on south side, while the north and west sides are adjacent to factory areas.

The total area of the PT. PLN property for study site as calculated from the obtained coordinates of site boundary is 173.3 ha.

3) Geological Conditions (a) General Conditions

Based on the field observation, the rock/soil unit exposed at the survey area are divided into three units, They are:

Coastal deposit: Coastal deposit occupies the north part of the survey site and spreads along the coast.

Coral limestone: Coral reef is located at the north part of the site, approximately 2.0 km from the coastline toward the sea. The coral reef is forms an island 9.0959 ha wide (based on GPS tracking)

Study Site

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Swamp deposit: Swamp deposit observed at the south part of the coastal deposit form a plain area. The local people use this area for paddy fields.

Volcanic deposit: Volcanic deposit is exposed at south part of survey site. This deposit lays in the upper part of the swamp deposit from 1.0 up to 2.0 m in thickness. Local people used this area for plantations.

(b) Seabed Observation

The survey aims to know the depth of the seabed for an unloading jetty design. The minimum depth necessary is 7.5 m for an unloading jetty construction. The seabed is slightly shallow, showing a depth of 8 m around 4 km from shoreline.

4) Civil Works Study (On-Site Reconnaissance Survey) (a) Borrow Area Location

Basically around the survey area there many rock mining companies, Concerning the estimated huge quantity of rock or soil material required for land filling however, there is no single company or material supplier that will able to provide a quantity of 3,000,000 – 4,000,000 m3, so far.

Therefore a possible option to provide this huge quantity is from several material providers and quarries which are not necessarily located very near to the site study.

(b) Concrete Batching Plant

There are two locations of concrete batching plant companies around the survey site, which are PT. SDB with capacity of 35 m3/hour and PT. Jayamix with capacity 70 m3/hour.

The average concrete batching plant capacity ranges from 60 – 80 m3/hour. In the special case of construction requiring a huge amount of concrete, it is common to make a special contract with a chosen concrete supplier to establish an exclusive concrete batching plant within the construction compound with a specific capacity, as required.

(c) Power Line

The existing and operated power transmission line from Suralaya Power Plant is 500 kV and the new power transmission line is planned for 150 kV.

(d) Gas Pipe Line Pertamina

There is an existing gas pipe line of PT. Pertamina (State Gas Company) which is embedded along the access road to a project site toward the Combine Cycle Power Plant of Cilegon (PLTGU Cilegon) at Margasari Village, Pulo Ampel Sub-District, Serang District located approximately 10.0 km north of the study site.

(e) Bench Mark

There exists no official bench mark around the project site, but according to information from the National Land Agency (BPN), there is second-order BM located in the front of Bojonegara District Office, approximately 6.0 km far from the study site.

(f) Industrial Water Supply

The actual existence of a water supply distribution pipe around site location, especially those

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belong to local water supply company (PT. PDAM), was not visible,.

The supply for water for most of the industrial purposes around the study site is taken from the pipe distribution line of PT. Sauhbahtera Samudera, a private raw water supply agency based in Serang District, Banten Province.

(g) Nearest Loading-Unloading Jetty Facility

The nearest loading-unloading and marine transportation facility is a private unloading jetty facility owned and operated by PT. SIM & PT. DAM, which located approximately 2.0 km far from study site.

(h) River

There is a river named Kedungingas River (Sungai Kedungingas), which acts as the natural south side boundary of the project site, that flows directly to the shore on the east side.

(i) Mangrove Vegetation

Along the shoreline of Bojonegara study site, located in a green belt zone in the form of mangrove vegetation with an area of approximately 1,000 m × 100 m (10 ha) area.

5) Bathymetric Conditions (a) Depth of Sea bed

The seabed elevation on study site ranges from 0 – 7.5 m at a distance approximately 4 km from shore line.

(b) Coral Reef

Reference to the bathymetric chart and on-site observations confirm the existence of a coral reef located within the survey site and its surrounding area.

(c) Tide

The type of tide on study site is mixed semi diurnal.

The predicted historical low water at Labuan Tide Station (105º49'E, 06º22'S) is -0.0 m, high water is 1.5 m, thus the range is 1.5 m.

The predicted historical low water at Tanjung Cikoneng Tide Station (105º53'E, 06º04'S) is -0.1 m, high water is 1.2 m, thus the range is 1.3 m.

(d) Wave

The height of waves on the shoreline has a maximum 1 m, but this could reach 2 to 3 m offshore during the winter storms of the western and eastern season.

(e) Seawater Temperature

Reference to results of a survey by Research Center for Oceanography, Indonesian Institute of Sciences (2002), show the average seawater temperature ranges from 28.01 – 30.38ºC.

(f) Turbidity of Seawater

Refer to result of survey by Research Center for Oceanography, Indonesian Institute of Sciences (2002), the average turbidity of seawater ranges from 4.85 – 20.59 ntu.

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(g) Salinity

Refer to result of survey by Research Center for Oceanography, Indonesian Institute of Sciences (2002), the average salinity of seawater ranges from 31.776 – 33.828 psu.

(h) Seawater Quality

Refer to monitoring results by Local Development Agency (Bapedda) of Banten Province, shows that some of the water quality parameters such as BOD, COD, H2S and NH3N are higher than the standard quality.

6) Geological Study (Off-Site Literature Survey) (a) Physiographic and Morphology

The Serang Quadrangle is subdivided into three geomorphologic units which are a low-lying plain, rolling hills and volcanic terrain. The Low-lying plain occupies the northern portion of the Quadrangle and stretches east-west. This area is usually formed by coastal and swamp deposits. Therefore, the site is within the low-lying plain area.

(b) Stratigraphy

Table 6.2-1 Stratigraphy of the Study Site

Age Symbol Formation Lithology

QUARTERNARY

Qa Alluvium, Coastal deposits

Consist of pebbles, gravel, loose sand, silt and mud with fragments of mollusk shell present along the north coast, Local people use this area as a fishpond.

Ql Coral Coral colonies, mollusk shell fragments

Qbp Basal of Mount Pinang

Intrusive basalt. Local people use this material as construction material.

Qpvb Banten Tuff Tuff, pumice tuff, tuffaceous sandstone

Qpvg Gede volcanic product

Lava, breccias, consolidated lahar. Local people use this material as construction material.

Source: JICA Study Team

(c) Structure and Tectonic

Tectonic activity in this area is reflected in the presence of a number of folds and faults. Commonly, dips are less than 30°, indicating a relatively minor tectonic activity. In general the trend in fold axes is north-northeast-south-southwest. Thre trend in faults and lineaments is mostly northwest-southeast. The faults are generally normal.

(d) Mineral Resources

In the vicinity of the survey area, andesite and basalt construction materials are being quarried for construction purposes, including roads. Weathered tuff is used for the manufacture of bricks; earth material is utilized as fill.

(e) Sub-Surface Geological Condition

The sub-surface geological condition around study site was obtained from former geological study around the site survey area. The former geological study was “Soil Investigation for Transmission Line 150 kV Suralaya – Bojonegara”.

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The investigation found that the upper 6 m is categorized as very soft to soft clay with N-Value of ranges from 1/30 up to 4/30, with qc <10 kg/cm2 and everything below 6 m is categorized as dense to very dense with N Value ranges from 35/30 up to N>50 with, qc >200 kg/cm2.

(f) Seismicity

Considering the seismic coefficient zone map (T. Nayoan DPMA 2002), the seismic zone coefficient (Z) of site survey is within zone E with (Z) = 1.2 – 1.4 (average 1.3), the ground seismic acceleration ac = 190 for 100 years return periods. The ground type at the site survey is dense sand, hence the correction factor v = 1.1. Based on these parameters, the design peak ground acceleration of site survey area is ad = 271.7 gal and seismic coefficient k = 0.28.

If referring to the newest Indonesian Earthquake Zone published in 2010 by Public Work Ministry, the site survey lies on “seismic coefficient at bed rock, a = 0.25 – 0.3 g”.

(3) Basic Concept of the Model Power Plant Basically, most of USC power plant systems and facilities are of a very similar structure to a super

critical power plant. So, this part will explain of the major system of USC and major important facilities such as a Boiler, Coal Pulverizer, Dust Collector, Coal Handling system, Ash Handling system, Ash Disposal area, DeSOx system, DeNOx system, Steam Turbine and Cooling Water system.

This Model Power Plant should be designed so the advanced technology of Ultra Super Critical (USC) steam condition is considered as an environmentally harmonized type of coal fired power plant.

In this preliminary feasibility study (Pre-FS), JICA study team summarized the result of the basic study for Model Power Plant. A more detailed study and design should be carried out in a feasibility study (FS) in future.

1) Design Requirements of Model Power Plant (a) Design Requirements

Model Power Plant should be a single unit 1,000 MW of USC, and the design requirements are as follows.

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Table 6.2-2 Design Requirements for Model Power Plant

No. Name of criteria Unit Data1 Rated Output MW 10002 Number of Unit Unit 13 Plant Efficiency (HHV) % 404 Plant Capacity Factor/Availability Factor % 80/845 Annual Operating hours h/ y 7,3586 Annual Gross Generation Output GWh/y 7,0087 Auxiliary power consumption rate % 88 Annual Net Generation Output (@ Main

GWh/y 6,447

9 Boiler Efficiency (HHV) % >8410 Turbine Efficiency % >4711 Fuel Consumptiona. Heating Value of coal (Gross as received) kcal/kg 4,000b - Per hour (100% load) t/h 640c - Per day (Averaged, CF = 80%) t/d 12,300d - Per month (Averaged, CF = 80%) t/month 368,600e - Per year (CF = 80% ) t/y 3,767,000f - Coal storage yard capacity days 30

12 Capacity of Ash disposal area Years 5 Source: JICA study team

(b) Steam Condition

Steam conditions at rated condition are as follows.

Table 6.2-3 Steam conditions at rated condition

No. Rated Value Remarks

Main Steam Pressure 25.4 MPa (g)

(at Boiler outlet) Temperature 605 oC

Reheat Steam Pressure 3.83 MPa(g)

(at Boiler outlet) Temperature 623 oC

Main Steam Pressure 25.0MPa (g)

(at HP Turbine inlet) Temperature 600 oCReheat Steam(at IP Turbine inlet)

5 Approx.8.47kPa (a), 42.6 oC Sea Water Temp. 30oC

6 30 oC At CW intake point

Condensate Vacuum & Saturated Temperature

Sea Water Temperature

4 Temperature 620 oC

Item

1

2

3

Source: JICA study team

(c) Environmental Standard

Model Power Plant should comply with environmental standards. Key environment standards are as follows.

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Table 6.2-4 Environmental Standard of Coal Fired Power Plant for Flue Gas Discharge

No. Parameter Maximum Limit (mg/Nm3) 1. Total Particle 100 2. Sulfur Dioxide (SO2) 750 3. Nitrogen Oxide (NOx) 750 4. Opacity 20 %

Source: Annex 2 the Decree of Jakarta Governor No. 670 Year 2000 regarding the Emission Gas Standard from Fix Sources

Table 6.2-5 Standard Limit of Liquid/Waste Water for Central Processing Unit of Thermal Power Plant

No Parameters Unit Limit 1 pH - 6-9 2 TSS mg/l 100 3 Fat and oil mg/l 10 4 Free Chlorine (Cl2) mg/l 0.5 5 Total Chromium (Cr) mg/l 0.5 6 Copper (Cu) mg/l 1 7 Iron (Fe) mg/l 3 8 Zinc (Zn) mg/l 1 9 Phosphate (PO4-) mg/l 10

Source: Ministerial Environment Regulation No. 8 Year 2009 (annex 1)

Table 6.2-6 Standard Limit of Liquid/Waste Water for Cooling Water

No Parameters Unit Limit 1 Temperature °C 40 2 Free Chlorine (Cl2) mg/l 0.5

Source: Ministerial Environment Regulation No. 8 Year 2009 (annex 2)

Table 6.2-7 Standard Limit of Liquid/ Waste Water for Desalination

No Parameters Unit Limit 1 pH - 6-9 2 Salination - Within 30 m from the location of exile waste

water to the sea, the salinity of waste water shall remain the same as natural salinity of the sea water.

Source: Ministerial Environment Regulation No. 8 Year 2009 (annex 2)

Table 6.2-8 Standard Limed of Liquid/Waste Water for FGD System (Sea Water Wet Scrubber)

No. Parameters Unit Limit 1 pH - 6-9 2 SO4(2-) % The maximum increasing of the sulfate inlet sea

water not more then 4 % Source: Ministerial Environment Regulation No. 8 Year 2009 (annex 2)

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Table 6.2-9 Standard Limit for Noise

Land Utilization Type/Activity Environment Level of Noise db (A) A. Land Utilization Type

1. Housing Complex and Settlement 55 2. Trade and Service Center 70 3. Office and Trade Area 65 4. Industrial Area 50 5. Government and Public Facility 60 6. Recreation Area 70 7. Specific Area:

- Airport - Railway Station 60 - Sea Port 70 - Cultural Heritage

B. Activity Environment 1. Hospital 55 2. School 55 3. Religion Facility 55

Source: The Decree of State Ministry of Environment No. 48/1996

(d) Design coal PLN provided specification of Design coal to JICA study team. The Design coal is used to design

the equipment for Model Power Plant, and its specification is as follows.

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Table 6.2-10 Parameters of Design coal

Range Minimum Maximum

Proximate Analysis (% as received)Total Moisture 25 40 35Inherent Moisture 13.8 25 18Ash 3.3 6 5Volatile Matter 27.9 40 35Fixed Carbon 23 41 25

Specific Energy (as received)Gross Calorific Value (GCV) = Higher 3,700 4,300 4,000Heating Value (HHV) (kCal/kg)

Ultimate Analysis (% dry ash free)Carbon 65 80 68.2Hydrogen 3 2.9 5.7Nitrogen 0.54 1.2 1.13Oxygen 12 30 23.17Sulphur 0.13 2.2 1.8

Range Minimum Maximum

Ash Analysis (%)SiO2 2 60 34Al2O3 3 52 6Fe2O3 4.7 52.5 39TiO2 0.02 4.1 0.48Mn3O4 0.2 8.8 2CaO 0.8 27.7 10MgO 0.02 32.6 5Na2O 0.05 4.12 0.71K2O 0.1 2.4 1.3P2O5 0.03 0.8 0.51SO3 0.2 24.6 1

Ash Fusion Temperature (°C) Reducing Reducing ReducingI.D.T. (deformation) 1,050S.T. (softening) 1,100H.T. (hemispherical) 1,150F.T. (fluid) 1,200

Ash Fusion Temperature (°C) Oxidizing Oxidizing OxidizingI.D.T. (deformation)S.T. (softening)H.T. (hemispherical)F.T. (fluid)

Hardgrove Grindability Index (HGI) 40 65 50

Description Typical

Description Typical

Source: PLN

(e) Coal Consumption

Based on the Design Requirements for Model Power Plant as discribed in Table 5.2-1, ammounts of coal consumption for a 1,000 MW unit are as below.

(Capacity Factor=80%, Coal Calorific Value = 4,000 kcal/kg, Thermal efficiency = 40%)

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Annual coal consumption: 3,767,000 (t/y) Averaged monthly coal consumption: 368,600 (t/m) Averaged daily coal consumption: 12,300 (t/d)

2) Description of Power Plant Facility

(1) Boiler (a) Fuel: Indonesian Low Rank Coal (Supplementary fuel: diesel oil)

(b) Steam Condition: USC (605/623°C at boiler outlet)

(c) Boiler Type: Pulverized coal firing, ultra super critical, one-through boiler

(d) Other: Outdoor type, Balanced draft system, Ring Roller type coal pulverizer,

Low NOx burner, Two stage combustion

(2) Turbine (a) Steam Condition: USC (600/620°C at turbine inlet)

(b) Turbine Type: TC4F (Tandem Compound Four Flow), Reheat Regenerative cycle High Pressure Turbine × 1, Intermediate Pressure Turbine × 1, Low Pressure Turbine × 2

(c) Rotation Speed: 3,000 rpm

(3) Generator (a) Type: horizontal cylindrical rotating field type synchronous generator

(b) Cooling: Direct Hydrogen cooling (for Rotor), Direct Water cooling (for Stator)

(c) Capacity: 1,250 MVA (Rated Condition)

(d) Power Factor: 0.8 delay (detail study carried out at FS stage)

(e) Rotation Speed: 3,000 rpm

(f) Frequency: 50 Hz

(4) Balance of Plant (BOP) BOP is the summary of all components and systems in a power plant, that are needed for

harmonious, safe and efficient operation, such as a Dust collecting facility, Coal Handling system, Ash Handling system, DeSOx system, DeNOx system, Cooling Water system, Water Treatment system, Waste Water Treatment system, and so on.

(a) Water Treatment System: Desalination Plant, Demineralizer, portable water system

(b) Flue Gas Treatment System: Dust collecting system, flue gas desulfurization system

* DeNOx system: No need to install for this design coal. By applying Low NOx burner and Two Stage Combustion, emission meets Environmental laws and regulations. However, air dispersion simulation should be carried out at FS stage and then be finalized.

(c) Waste Water Treatment system: Centralized Waste Water Treatment

(d) Coal Handling system: Receiving Conveyor, Discharging Conveyor, Coal storage yard,

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Stackers/Reclaimer,

(e) Coal Unloading system: Unloading Jetty, Trestle, Coal Unloader

(f) Ash Handling system: Bottom ash handling system, Fly ash handling system, Fly ash silo

(g) Ash disposal area: Controlled landfill type ash disposal area for five-year operation Fly ash and bottom ash can be utilized and sold for cement admixture and fertilizer admixture. However, a detail study should be carried out at FS stage.

(h) Cooling Water system: Cooling Water system (Seawater intake and outfall, pipes for intake and discharge, CW Pump)

3) Plot Plan PLN requested JICA study team for consideration of land usage beside power plant as below.

(a) Photovoltaic Manufacturing Work Shop: 2 ha

(b) Coal Blending Facility: At least 13 ha

The rest of the Bojonegara area will be 161 ha, and the power plant (including BOP, coal storage yard, ash disposal area) should be allocated within this area.

Figure 6.2-2 General Plant Area layout Source: JICA Study Team

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(4) Transmission Planning 1) Study cases

Bojonegara power plant is coal-fired thermal power plant, which will adopted Ultra-super-critical technology (USC). This high efficiency plant is expected to be a base source. Two 1,000 MW units are designed in this project. The first unit is assumed to start operating in 2021, and the second unit will start operating in the future.

The following two cases are proposed and studied as transmission options considering location and configuration of existing power systems.

Case 1: Access to Balaraja 500 kV substation which is located but near the plant site Case 2: Access to newly built 500 kV lines which pass through near to the plant site

In case 1, Bojonegara power plant is connected to Balaraja substation by a new double circuit

500 kV transmission line of approximately 60 km in route length. According to PLN, there are no protected forests, which prohibit the construction of transmission lines in the area between the plant site and Balaraja substation. In case2, the length of the access transmission line will be very short (less than 500m) because the new 500kV transmission line, which is expected to be energized on Oct. 2012, is designed to go through the power plant site. IPP power plant will be planned to connect to same line in 2016, therefore capacity of the transmission line is concerned in case 2.

CLGON

SLAYA

KMBNG

BKASI

GNDUL

CWANG

CBATU

CIBNG

CRATA

SGLNG BDSLN

CRBON

BLRJA

DEPOK

MRTWR

TSMYA

BANTEN

Bojonegara Power Plant siteCase2

Case1

Existing Plan ProposedPower plantSubstationTransmission line

Figure 6.2-3 Bojonegara Power Plant Site and Study Case of Transmission

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2) Results Power system analysis of each case was conducted by PLN. Power system expansion complied

with ‘N-1 criteria’ was considered. Annual costs, including capital cost, operation and maintenance cost and transmission loss cost, were calculated and compared between cases. Table 6.2-11 shows comparison between cases.

Case 1: The configuration of the power system is so simple to operate that there is no need to upgrade the existing power system and reduce power losses. In addition, Case 1 has more economical efficiency than Case 2 comparing each annual cost, including loss cost and O&M cost. On the other hand, the access transmission line covers a long distance and has a difficulty of ROW acquisition, which may cause longer construction time.

Case 2: It is easy to construct the access transmission line because the new 500 kVtransmission line goes through the power plant site. However, upgrade of transmission line is required and power flow is unbalanced after two power plants connect to same line. These situations impose complexity on system operation.

Study Team suggests that Case 1 should be a proposal of pre-FS study considering it’s simple configuration for power system operation. However, Case 1 oiubts out the additional delay risk due to difficulty of ROW acquisition. Therefore Case 2 can be considered one of the alternatives as the countermeasure against the delay risk of Case 1.

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Table 6.2-11 Comparison Between Transmission Study Cases For Bojonegara Power Plant

Case 1 Case 2

Description Access to Balaraja S/S Suralaya Bojonegara

625 87 1427 1000*1 (Y2021)

1000

2712 120 660 Banten MKRNG (Y2016)

660*1 510 500*2

19 (Y2016)

(Y2012) DUKSMBI (Y2014)

CLGON 194 2081 711 500*2

500*2 1225

1687 (Y2013) 2242 KMBNG

1639 500*2

821

BLRJA to CWANG2 1157

500*2 1746 630 (Y2015)

175 LKONG 614 to TMBUN

500*2 (Y2014) GNDUL -264

1127 1273 500*2

1936 1242 to CSKAN

TPCUT (Y2016) 513 -821

HVDC 1031 CIBNG

-2869 330 DEPOK 500*2

500*2

HVDC BOGORX 538

(Y2016) HVDC (Y2016) CIGRE 680

276

Y2021N0.8

660*1

(Y2011)

No.1-7

400*4,

600*3

No lines overloded in N-1 contingencyLoss: 991MW

Access to the T/L near the site and upgrade to 4x310mm2 Lisbon Suralaya Bojonegara

625 87 299 1000*1 (Y2021)

1000 (Y2016)

2519 120 660 Banten MKRNG (Y2016)

660*1 511 500*2

106 1299

(Y2012) DUKSMBI (Y2014)

CLGON 209 1955 711 500*2

500*2 1225

2633 (Y2013) 2120 KMBNG

1640 500*2

817

BLRJA to CWANG2 1135

500*2 1517 753 (Y2015)

103 LKONG 618 to TMBUN

500*2 (Y2014) GNDUL -335

896 1273 500*2

2268 1453 to CSKAN

TPCUT (Y2016) 507 -909

HVDC 1130 CIBNG

-2872 315 DEPOK 500*2

500*2

HVDC BOGORX 546

(Y2016) HVDC (Y2016) CIGRE 738

184

Y2021N0.8

660*1

(2011)

No.1-7

400*4,

600*3

After upgrading to Lisbon 4x 310mm2

Construction cost

(i) Access line (60km) 50 MUS$ (ii) Switchgear (2 sets) 4.5 MUS$

Total cost 54.5 MUS$

(i) Access line (0.5km) 0.2 MUS$ (ii) Reconductor (60km) 32 MUS$

Total cost 32.2 MUS$

System loss Peak loss 991 MW Annual loss 5,209 GWh

Peak loss 1,011 MW (‘Case2-1=’ 20MW) Annual loss 5,313 GWh (‘Case2-1=’ 104GWh)

Annual cost 7.9 MUS$/year 9.2 MUS$/year Remark The route length of access line is long (60km) and term of construction may

become longer due to difficulty of the acquisition of ROW. There is no need to upgrade of existing system for N-1 criteria. Although the construction cost is more expensive, the annual cost is cheaper

than Case 2 because of lower transmission loss. Operating is easier and effective due to exclusive line from Bojonegara.

The route length of access line is very short (less than 500m) because new T/L will go through beside the power plant site.

Reconductoring is needed in order to comply with N-1 criteria. The reconductoring work needs planned outage of 500kV line, which will

force uneconomical operation during the work. The power flow with two plants operated on Suralaya-BLRJA line is

unbalance and disadvantage in system loss.

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(5) Environmental and Social Considerations This section summarizes the Initial Environmental Examination and Evaluation (the IEE study)

regarding the model coal-fired power plant project, based on the planning at the prefeasibility study (the

Pre-FS study) stage. The IEE study was conducted as assistance to the initial environmental evaluation of

the Indonesian Side as represented by the DGE of MEMR and PLN.

1) Relevant environmental laws, regulations and plans (a) Relevant environmental laws and regulations of GOI

The regulations of GOI relevant to the environmental impact assessment for a coal-fired power plant are diverse. Among them, what are regarded as important are listed as below. (In detail, refer to the Separate Volume of this main report, ‘Preliminary Feasibility Study Report of CCT 1,000 MW Coal Fired Model Power Plant(s)’.

a. Environmental management Law No. 32 / 2009, Law No. 5 / 1990, Government Regulation No.7 / 1999

b. Environmental impact assessment (AMDAL) Government Regulation No. 51 / 1993, No. 27 / 1999; MOE Regulation No. 17 / 2001, No. 11 / 2006, No. 08 / 2006, No. 24 / 2009, No. 27 / 2009, No. 13 / 2010; MOE Decree No. 86 / 2002, No. 05 / 2000, No. 41 / 2000, Decree of Head of BAPEDAL No. 8/ 2000

c. Spatial Plan (includes regulations related to protected area management) Law No. 26 / 2007; Government Regulation No. 26 / 2008, No. 68/1998, No. 69 / 1996; Presidential Decree No. 57 / 1989, No. 32 / 1990, MPW Regulation (PU) No. 15/PRT/M/2009

d. Air Pollution Control Government Regulation No. 41 / 1999; MOE Decree No. 13 / 1995, No. 45 / 1997; MOE Regulation No. 07 / 2007, No. 21 / 2008, No.12 / 2010

e. Noise, Vibration and Odor MOE Decree No. 48 / 1996, No. 49 / 1996, No. 50 / 1996

f. Water Pollution Control Government Regulation No. 82 / 2001, No. 19 / 1999; MOE Decree No. 51 / 1995, No. 122 / 2004, No. 04 / 2001, No. 37 / 2003, No. 110 / 2003, No. 51 / 2004, No. 179 / 2004, No.201 / 2004, No. 112 / 2003, No. 113 / 2003, No. 08 / 2009

g. Waste Management (includes regulations especially on hazardous and toxic waste management) Law No. 18 / 2008; Government Regulation No. 18 / 1999, No. 85 / 1999, No. 74 / 2001; Decree of Head of BAPEDAL No. 1, 2, 3, 4 and 5/BAPEDAL/09/1995; MOE Regulation No. 03 / 2007, No. 02 / 2008, No. 18 / 2009

h. Regulations regarding environmental assessment and related measures for a coal-fired power plant Law No. 5 / 1994 (biodiversity), No. 41 / 1999 (forestry), No. 81 / 2000 (navigation), No. 7 / 2004 (water resource management), No. 32 / 2004 (local government), No. 24 / 2007 (disaster management), No. 27 / 2007 (management of coastal areas and small islands), No. 4 /2009 (coal

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and minerals), No. 36 / 2009 (health), No. 45 / 2009 (fishery); Government Regulation No. 20 / 2010 (aquatic transport), No. 10 / 2010 (change of forest status), No. 24 / 2010 (utilization of forest area); MEMR Decree No. 1899 / 1994 (guidelines for environmental monitoring of electrical power), No. 1457.K/28/MEM/ 2000 (technical guidelines for environmental management in mines and energy), MOH Decree No.876/Menkes/SK/VIII/ 2001 (technical guidelines for environmental health impact analysis)

i. Regional regulations of concerned local governments Regulation of Banten Province No. 2 / 2011 on landuse and spatial structure of the province(2011-2031) Regulation of Banten Province No. 51 / 2002 on operation of environmental impact assessment Decree of Governor of Jakarta No. 670 / 2000 on emission standards of fixed sources in Jakarta Decree of Governor of Jakarta No. 551 / 2001 on environmental standards of ambient air quality and noise level in Jakarta District law of Serang District No. 10 / 2011on land/space utilization and spatial structure of the district (2011-2031)

(b) Spatial plan

Environmental impact assessments are evaluated by local governments in Indonesia. Regarding the site selection of a large scale facility, it is important to agree with the upper-level superimposed plans of the concerned local governments, especially with their spatial plans. The following are the points to note in those spatial plans of Banten Province and Serang District that administers the concerned project site of Bojonegara.

a. Spatial plan of Banten Province The Law No. 26 / 2007 on National Spatial Plan and the Midterm Development Plan

(2009-2014) of GOI designated 5 special economic zones (KEK) in the entire Indonesian territory. One of the 5 KEKs is the Special Economic Zones (KEK) Bojonegara that contains the concerned project site of model power plant. KEK Bojonegara is also approved by the spatial plan of Banten Province in 2011.

The concerned spatial plan places significance on the protection of coastal-seaside and riverside band area as greenbelt. The width of belts that are object of protection are different, which depends on type of area and conditions.

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Note: Primary objectives of greenbelt conservation are as follows, according to Law No. 26 / 2007 on

National Spatial Plan and Regulation of Banten Province No. 2 / 2011. Preservation of ‘reservoirs’ for naturally recharging adjacent exploited areas; Protection of breeding and feeding areas that are important for fisheries; Protection of shorelines from erosion; and Reduction of pollutants and hazardous waste from upland areas.

This band area of land is ‘local protected area’ in the category of protected area systems, which is

defined by the regulations of forestry and spatial planning (e.g., Laws No. 41 / 1999, Law No. 26 /

2007, Government Regulation No. 15 / 2010 and Government Regulation No. 24 / 2010). As a

protected area, the band area is not allowed to be converted into a cultivated area. However, it can be

utilized for limited activities such as research, education, nature/eco-tourism. With the Environment

Law No. 5 / 1990 and the Forestry Law No. 24 / 2010, mangrove forest conservation is encouraged,

too.

The provincial spatial plan, with reference to Law No. 27 / 2007 on management of coastal

areas and small islands, designates 30 ha of seawater in Banten Bay as a marine conservation area. (However, the special plan of Serang District, as summarized below, does not set the concerned area as a marine conservation area. This discrepancy between the two spatial plans needs to be clarified further.)

b. Spatial plan of Serang District KEK Bojonegara, which the project site is located in, is approved by the spatial plan of

Serang District in 2011. With MOF Decree No. 419/Kpts-II/1999, a hilly area range where the project site is located

toward the west of Kramatwatu sub-district and Bojonegara sub-district is designated as a protected forest area. While the most part of the concerned area became a non-forest cultivated area since the land use map of 2011, the ‘protected forest’ status remains the same as before and its designation has not been changed so far.

As well as the provincial spatial plan, areas of seaside and riverside belt are an important target of protection.

Sub-districts of Kramatwatu where the project site is located and Bojonegara are contained in an industrial area and the project site owned by PLN is inside the land for industrial use administered by Jababeka Industrial Estate Co.

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The map in the below shows the present land use of Serang District.

< Legend >

Deistrict Border Bojonegara Special Economic Zone Landuse

Sub-district Border Bojonegara International Port Forest

Village Border Ex Golden Key Plantation

River Jababeka Industrial Estate Dry (arid) land

National Road Cilegon Gas-Combined PP Wetland

Provincial Road Land Property of PLN Settlement

District Road Project Candidate Site Water Resources

Other Road

Railway

Suralaya Power Plant

Boundary of Special Economic Zone

Source: Planning Board of Banten Province (BAPPEDA), Topography (scale 1/ 250.000), Bakosurtanal, 1999

Figure 6.2-4 Present Land Use of Serang District, Banten Province

(c) Emission Standards for Thermal Power Plant (Emission Gas, Effluent)

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Emission and effluent control of pollutants is a matter of importance in the environmental assessment of coal-fired power plants. Summarized below are standards for pollutant emission and discharge (effluent) regarding a coal-fired power plant.

a. Emission Standards

Table 6.2-12 Emission Gas Standards of Thermal Power Plant Fix Sources (with CEMS)

parameters Maximum Standard Limit (mg/Nm3) Coal Oil Gas

1 Sulfur Dioxide (SO2) 750 650 50

2 Nitrogen Oxide (NOx) represented by NO2 750 450 320 3 Total Particulate (TP) 100 100 30 4 Opacity 20% 20%

Source:MOE Regulation No. 21/2008 regarding Emission Limit for Thermal Powel Plant (Annex 1b) 1. Volume of gas is measured in the standard condition (Temperature 25.0 oC and 1 atmospheric pressure). 2. Opacities is used as practical monitoring indicator. 3. All the emission limit for 95 % of operational time for at least 3 days.

b. Effluent Standards (CPU)

Table 6.2-13 Effluent Standards for CPU of Thermal Power Plant parameters unit limit

1 pH - 6-9 2 TSS mg/L 100 3 Grease (Fat and Oil) mg/L 10 4 Free Chlorine ( Cl2)* mg/L 0,5 5 Total Chromium (Cr) mg/L 0,5 6 Copper (Cu) mg/L 1 7 Iron (Fe) mg/L 3 8 Zinc (Zn) mg/L 1 9 Phosphate (PO4-) mg/L 10

Source: Ministry of Environment Regulation No.8 / 2009 (annex 1)

Table 6.2-14 Effluent Standards for Boiler Blow-Down of CPU of Thermal Power Plant parameters unit limit

1 pH - 6-9 2 Copper (Cu) mg/L 1 3 Iron (Fe) mg/L 3

Source: Ministry of Environment Regulation No.8 / 2009 (annex 1)

Table 6.2-15 Effluent Standards for Cooling Tower Blow-Down of CPU of Thermal Power Plant

parameters unit limit 1 pH - 6-9 2 Free Chlorine (Cl2)* mg/L 1 3 Zinc (Zn) mg/L 1

Source: Ministry of Environment Regulation No.8 / 2009 (annex 1)

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Table 6.2-16 Effluent Standards for Demineralization of Water Treatment Plant of CPU parameters unit limit

1 pH - 6-9 2 Total Suspended Solid (TSS) mg/L 100

Source: Ministry of Environment Regulation No.8 / 2009 (annex 1)

c. Effluent Standards (Supporting Unit)

Table 6.2-17 Effluent Standards for Cooling Water parameters unit limit 1 Temperature 0C 40 2 Free Chlorine (Cl2)* mg/L 0,5

Source: Ministry of Environment Regulation No.8 / 2009 (annex 2)

Table 6.2-18 Effluent Standards for Desalination

parameters unit limit 1 pH - 6-9

2 Salinity 0/00 Within 30 m from the exit point of discharged wastewater to the sea, the salinity of waste water shall remain the same as natural salinity of the sea water.

Source: Ministry of Environment Regulation No.8 / 2009 (annex 2)

Table 6.2-19 Effluent Standards for FGD System (Sea Water Wet Scrubber)

parameters unit limit 1 pH - 6-9 2 SO4(2-) % The maximum increase of the sulfate from inlet sea water not more than 4 %

Source: Ministry of Environment Regulation No.8 / 2009 (annex 2)

d. Effluent Standards (Coal Stock Pile) Table 6.2-20 Effluent Standards for Coal Stockpile

parameters unit limit 1 pH - 6-9 2 Total Suspended Solid (TSS) mg/L 100 3 Iron (Fe) mg/L 5 4 Mangan (Mn) mg/L 2

Source: Ministry of Environment Regulation No.8 / 2009 (annex 2)

e. Effluent Standards (Oily Water) Table 6.2-21 Effluent Standards for Oily Water parameters unit limit

1 COD mg/L 300 2 Total Suspended Solid (TSS) mg/L 110

Source: Ministry of Environment Regulation No.8 / 2009 (annex 3)

2) Environmental and social impacts This section summarizes the impacts that were assumed in the scoping of 5.1(7) and that could

possibly be caused by the Project, based on the environmental regulations and upper level plans

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stated above and the baseline data collected by an IEE study commissioned to an Indonesian based study institute.

(a) Initial environmental evaluation for respective items of impacts

Compliance with the upper level plans a. Provisions of spatial plans regarding concerned regions and land use

The project site is located in an industrial area of the special-economic-zone Bojonegara (KEK-Bojonegara) that is designated by the Central Government of Indonesia. The land of the site is owned by PLN. In the respective spatial plans of the Banten province and the Serang district, the KEK-Bojonegara is also ratified as special-economic-zone where the development of a new international port and aggregation of large-scale industries has started. Therefore, the proposed project regarding power plant construction agrees with the land use plan of spatial plans that are super-imposed plans by the respective administrations of the nation, the province and the district.

b. Poor25, indigenous and ethnic people No indigenous and ethnic minority people live in the surroundings of project site. No slums are

identified in settlements around the project site. An interview survey, conducted in this IEE study at Teratai village on the south bank of a river that flow down along the south border of the Project Site, revealed that the villagers are constituted with more than 100 households of fisher men and 10 middlemen for fish trade, owning 50 to 60 outboard-motored fishing boats. A family has 5 to 9 family members in average. According to them, they can work for roughly 9 months of coastal fishing, except for 3 or 4 months of rainy season. Fishermen can make fish catch of at least 300 thousand Rp per one trip per boat and earn one (1) to two (2) million Rp per a family month. Middlemen can earn eight (8) to ten (10) million Rp per month in average.

The families, that are defined as ‘pre-prosperous (poor)’ by the National Family Planning Board (BKKBN) based on the definitions of Central Bureau of Statistics of Indonesia (BPS), amount to about 18 % of all families in Kramatwatu Sub-district (called ‘Kechamatan’ in Indonesia) where the project site is located and to about 20 % in Bojonegara Sub-district adjacent to the north border of the site (Statistics in 2008, Kramatwatu and Bojonegara Sub-district Offices, collected by this IEE Study team).

c. Protected area and conservation area of the natural environment In the provincial and district spatial plans that administer the project site, it is required that a

25 (1) There are various ideas of poverty lines, including 1 USD per person per day, which had been used by the World Bank

and MDGs as the world’s common scale, and 1.25 USD per person per day (purchasing power parity). Separate from these, there are also poverty lines set originally in each country. It is desirable to refer to both of these poverty lines in order to grasp the situation of absolute poverty. (Quotation from ‘JICA- Public Policy Department/Poverty Reduction Task Force, Thematic Guidelines on Poverty Reduction, February 2011, p4, footnote-17’)

(2) National Poverty Line of Indonesia is defined, based on SUSENAS (National Socio-Economic Survey) surveys, by Central Bureau of Statistics of Indonesia (BPS) as follows; namely, the BPS measures absolute poverty using the value of total expenditures necessary to afford a diet that will provide 2,100 kilocalories per day and non-food expenditures equivalent to that required to buy a non-food basket of goods and services reported by a family at the calorie cut-off point while defining the poverty lines, respective to urban poor and rural poor. The rural poverty line is set at Rp243,729 per person-month as of September 2009. (Source at BPS http://www.bps.go.id/brs_file/kemiskinan_02jan12.pdf)

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band of land aside shore and river should be protected as a greenbelt for the purpose of shore protection against erosion, protection of the fish nursery and habitat, preserving the function as a pollutants-purifier. The width of band to be protected in the pertinent project site is determined as follows.

100 - 200 meters from the highest tide point landward from the shoreline 50 - 75 meters from the river bank

While no naturally protected area exists in the terrestrial surroundings of the site, the concerned spatial plan contains a plan to conserve the current plantation area, which stretches over a hilly area westward along the east coast as protected forest in the peninsula of which the project site is located. However, on the condition that proper measures will be taken to control the emissions of acidic gases and dust within the relevant emission gas standards of coal thermal power plant, any significant impacts will not be projected. The statistics about wind direction over the last 30 years show that a year-round wind blows dominantly eastward around the concerned area.

An area of Banten Bay offshore from the project site is designated as a marine conservation area with the spatial plan of Banten Province, while it is not a conservation area in the concerned plan of Serang District. In principle, they are supposed to agree with each other. Therefore, the status of the area should be confirmed on the FS/EIA study stage with both administrations. Besides, since the border line of the conservation area cannot clearly be identified due to a small map scale of the provincial spatial plan, proper communications with the provincial and district administrations. Appropriate measures should be taken for the purpose of setting the concerned marine conservation area, the impacts of a coal unloading berth and jetty facilities and thermal effluent water, etc.

d. Cultural heritage There is a religious monument for Muslims, which is called Bukit Santri, a little more than 2 km

north of the project-site border, where worshippers visit from remote places. As well as the plan for the protected forest, it also necessitates appropriate measures to control emission gases. Other cultural heritage items were not specifically identified around the site in the IEE study.

Environmental impacts e. Sensitive natural environment, biota and ecosystem

A colony of mangrove grows along the shoreline of the project site and around the mouse of river that flows down eastward along the south border of the site though the colony is of small scale. However, mangrove is decreasing in Java Island while being a precious resource having multilateral functions of environmental services. Since the project impacts on mangrove are unavoidable with the facilities of coal transport, water inlet and wastewater outlet, a detailed impact assessment study should be conducted in the EIA study on feasibility study stage and the appropriate conservation measures need to be considered while paying attentions on the multi-functions of mangrove.

A colony of coral with the stretch of approximately 9 hectares is sighted about 1.7 km offshore in the direction of 65 degrees from the mouth of river on the south of project site, according to field

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surveys of Pre-FS/IEE study, hearings from local fishermen and satellite image of Google Earth. Three small islands, seen as coral atoll, also sit about 5 km offshore in the east of the site. Besides, 7 km offshore toward 40 degrees in the north-east of the site, there sit an island Panjang (Pulau Panjang), whose surroundings are a good local fisheries and seaweed cultivation area.

According to local fishermen in a hearing survey of IEE study, the areas around the concerned river mouth and along the shore are not good nursery of fish and sea life, owing to degraded pollution with domestic wastewater and mud sedimentation and a small scale of mangrove. On the other hand, they deen that environmental conservation of coral reefs and the surroundings of Panjang island has a vital connection with preservation of fishery resources, but at a time feeling that those resources are degrading in recent years. They pointed out over fishing and water pollution by ambient plants and factories as its reason.

Summarizing the above, it is considered necessary that the preservation of offshore coral reefs and greenbelt along the concerned river, river mouth and shoreline should be examined as mitigation measures for project impacts. f. Geographical features, hydrographic conditions and bottom sediment

The area of project site is approximately 170 hectares. It assumedly requires roughly 3 or 4 million cubic meters of land-fill material for land preparation. Due to a large volume of procurement, it is supposed that most earth material will be taken from existing borrow pits in the peninsula, where the project site locates, while some material would be transported from distant borrow sites. No impacts will arise on protected and other reserved forests if the procurement is from existing borrow sites. However, on the project-implementation stage cares should be taken in the process of selecting borrow pits and its operators not to choose illegal operators without clearance of AMDAL appraisal for the business. In addition, proper measures for safety and dust control will be necessary during transportation of material, which is in the same manner as construction works for other infrastructure projects.

The project site faces a recessed-section of gently-curved bay with long shoals off the shore. Bottoms offshore the project site are covered by silt and sand. Since the layout plan assumes coal unloading berth and jetty facilities around 2.5 to 3.5 km long, hydrographic conditions of the sea might be affected if the facilities require dredging work though they will not block off the current of the sea (See the section of ‘g’ in the next).

g. Impacts related to land reclamation, dredging and ground subsidence, etc. A large portion of the project site is low-lying wetland and partly submerged under water at the

time of high tide, which necessitates earth-filling embankment for site preparation. It is planned that in principle, the reclamation height for embankment is to be controlled less than one (1) meter. If higher embankment fill is required to reach the design ground surface level, then the measures need to be taken to properly control impacts on the ground and soil erosion from seaside-and-riverside site boundary with appropriate construction method.

The necessity of dredging for construction of coal unloading jetty facilities cannot be determined

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at the current study stage. If it is determined as necessary in the FS study, the assessment of its impacts on marine hydrographic conditions, treatment of dredged soil and impacts on nearby coral reefs shall be made.

Environmental pollution h. Air pollution

Ciregon City, with the population of more than 3 hundred thousand, locates at 4 km from the site and Jakarta does at around 80 km from the site. Assumed stack height of the planned power plant is 250∓30m. The point of maximum ground concentration normally appears between 9 km from the emission source with the effective stack height of 200 m and 15 km with that of 500 m. The USC-type power plant, which is chosen in this project, can reduce about 7 % of coal consumption per unit generation, with assumption of using 4200 kcal/kg coal, compared with the conventional SC-type power plant. In this way, total emission of respective air pollutants will be reduced at the rate corresponding to coal consumption. However, the concentration of pollutants in emission gases may not change. In other words, while the amount of CO2 emission will be reduced in comparison with the conventional SC power plant, the emission of SO2, NOx and dust cannot be relieved even in case of USC type power plant. Therefore, regarding SO2, NOx and dust, what is required are not only compliance with the emission gas standards of coal thermal power plant, but also the emission control measures that will reduce pollutant loads as much as possible. i. Water pollution

In the conceptual design of Pre-FS study, the discharge temperature of used cooling water, so-called

thermal effluent water, is controlled to be 37 oC (Intake water + 7 oC), compared with the intake water

temperature at 30 oC on the assumption of existing data. The designed temperature will comply with the

regulation of ‘to be less than 40 oC’ as designated in the concerned effluent standards for cooling water of

thermal power plant (Ministry of Environment Regulation No.8 / 2009, annex 2).

However, considering coastal and seabed topography and hydrographic conditions of the concerned site,

thermal effluent water might be slow to disperse in comparison with the location that faces outer sea.

Moreover, the impacts of thermal effluent water on nearby coral reefs cannot be assessed in the current

Pre-FS study stage. It should be assessed with the simulation study of thermal effluent water diffusion in

the following FS study, when the cooling water system and the discharge outlet of used cooling water are

designed, for its discharge not to cause adverse stresses on adjacent coral reefs and other environment.

For other wastewaters from the power plant facilities and buildings, wastewater treatment plant(s) will

be installed to properly treat them according to the effluent standards in the regulation above.

j. Pollution related to coal transportation and storage and coal ash management Fuel coal will be conveyed through coal unloading berth, jetty and conveyer, and put in coal

storage yard. The dispersion control system of coal dust, such as conveyer casing, windbreak facility and watering of coal storage yard, will be installed to avoid scattering and dispersion of coal dust.

Since the coal ash disposal area requires appropriate measures for leachate control to prevent

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pollution of groundwater and public water source, it is planned to be a controlled landfill type. Note:

Coal ash is categorized in hazardous and toxic waste because it may contain a small amount of heavy metals. While, in international code and Japanese relevant regulation the disposal site of hazardous waste is specified to be the controlled landfill site or leachate-control type, corresponding regulation is not found in Indonesia. On the other hand, in Indonesia, the regulation of Kep-04/BAPEDAL/09/1995 states that landfill site for hazardous and toxic waste shall have a minimum distance of 500 meters from a permanent river used for agricultural irrigation or clean water, which requires the safety measures for hazardous-waste-disposal site by way of constraint on site selection, not by the facility type of disposal site.

If this regulation is applied to the project site in the concerned plan, the concerned site may not be able to meet its requirement within the limited 170 ha and given conditions of the site. Regarding this, the local consultant team of the IEE study made an inquiry with Division Heads of Hazardous Permit Division and Hazardous Management Division, MOE, GOI in February, 2012. The answer is as follows; 1) The concerned regulation above should be applied to the concerned project plan. 2) On the condition of 1), if PLN as the project proponent issue an official letter to the Hazardous

Management Division of MOE that should ask the recommendations of MOE for its mitigation and that able to confirm the strategic importance of the plan in power supply and the design for the controlled ash-disposal site with optimal technology, the special permission can be issued to waive applying the concerned regulation on the very plan. The special permission will be one of the prerequisites to approve the concerned AMDAL (EIA).

k. Noise and vibration, offensive odor

Along the south bank of river that flows down on the south border of project site, there are more than 100 houses. In the early 1990’s, all residents of this settlement sold their property of houses and lands to Jababeka Industrial Estate Co., the owner of the land, according to the interviews with the Jababeka Co. and the residents of this settlement, although with an agreement between the Jababeka Co. and the residents, the people still keep staying there as before without any rent payment until any developer of the land actually start developing their business. However, it is verified in the interview with them that all residents of the settlement are aware of and in agreement with the conditions that they should move out of the place unconditionally if actual development has been decided to start. Currently, most residents here are fishmen who move down the river and do fishing offshore in the bay area, middle men for fish and seafood, small numbers of farmers and their family (An average household has 5 to 9 family members typically).

On the other hand, in the west of the project site there pass national and provincial circular roads around the peninsula, and small settlement exists on the west of the road. The nearest settlement to the project site, next to the one on the south bank of the river stated above, is about 1.5 km away from the planned power block of project site.

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In summary of the above, if the residents on the south bank of the river are resettled, there will be no settlement in the adjacent area of the project site border, and the area literally becomes that of industrial estate. Regarding noise and vibration, no significant will be caused to surrounding settlements as a result. Also, the issue of offensive odor has not occurred in other existing coal thermal power plants.

Considering these, it is important to comply with the relevant environmental standards on the site border of the project. Therefore, the following measures are assumed necessary. Environmental monitoring on the site border, which is required in the environmental

regulation Employment of standard devise for noise/vibration reduction or control, sound shield

measures at site border

Social impacts

l. Resettlement Residents living in more than 100 houses along the south bank of river that flows down on the

south border of project site. Strictly speaking, they are residents living outside the project site. However, it is recommended for them to resettle if the concerned project is implemented. As said in the previous section ‘k’ (noise and vibration, offensive odor), since the residents there sold and gave up possession of the land in legal terms 20 years ago, it would be difficult for them to find reasons of such compensation for resettlement as would be given to legitimate residents. Yet, the project proponent is recommended to have public dialog and consultation with the concerned residents and to take appropriate measures to support them so that they can keep non-degraded living and livelihood.

Looking at the project site, though it is owned by PLN and under management of the Jababeka Industrial Estate Co., a slightly fewer than 60 people have currently temporary activities there. They are farmers engaging in rice and other crop farming and fish farmers running aquaculture inside the concerned project site of PLN land. Legally, they have no right to have activity there. Their status is similar to the above case of the people residing on the south bank of river. While they have no rights on the land and property, they came to start using the land for farming and aquaculture, visiting from adjacent towns and villages, under verbal agreement with the Jababeka Co. since after 2004 when the land ownership devolved in PLN, the land continue to be not in use. They are also not paying any rent to either Jababeka or PLN and in agreement with Jababeka to move out unconditionally if any development starts. Certainly they agreed to give up land and activities there without any compensation. However, they expect some reservations such that walk-away can be given some grace period until a harvest cycle of crop and fish farming will terminate, which are usually about 3 months.

m. Water usage The cooling water will use the sea water, so a sufficient amount of water is available without

raising any problems. Regarding other water usages of industrial water, pure water and clean water, whether they are obtained from deep wells, a seawater desalination plant, or external network is not determined in the current stage, and will be examined in the FS study. If deep wells are chosen as

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water source, it should be assessed in the FS/EIA study whether there are any impacts on local water resource and water usage. n. Impacts on local economy, local resources and social infrastructure and services

The location of project site itself may cause no negative impacts on local economy since it sits incide an area of industrial estate in a special-economic-zone of provincial and district spatial plans.

What should be considered are project impacts on offshore fishery activities and marine transportation. In the FS/EIA study, at the time of planning coal-carrier ship, coal unloading berth and jetty facilities, the impacts should be assessed on sea traffic of fishing boats to fisheries and aquafarms (at coral reefs, around the Panjang Island), and on other sea traffic in the Banten Bay including a private port on the north of project site.

It is also recommended to prepare possible measures for the preservation of marine and fisheries resources in the surroundings of offshore coral reefs and the Panjang Island, together with impact assessment on natural ecosystem discussed in the previous section ‘e’.

o. Misdistribution of benefits and damages

As the characteristics of a large-scale generation facility, the power-consuming area will not be the local area of project site, but an area with a large demand. The concerned project is also a part of plan that all power sources in an entire region will bear the demand of a large area, including DKI-Jakarta (Special Capital Region of Jakarta), and energy security. Therefore, in respect of the local area of the concerned project site, planned budgets should be considered to take measures for preserving living environment (ambient air and water environment), ecological environment (coastal and marine vegetation and ecosystems) and primary resources (fishery resources), although positive impacts on the locality, such as to promote local employment, may also be counted.

3) Mitigation measures This section summarizes the mitigation measures that can be assumed necessary at the current

study stage of project, in order to avoid or minimize the impacts stated in the previous section 2). The evaluation is only a conceptual evaluation since the concerned study is an initial environmental examination (IEE) study.

While it is assumable at the current study stage that those items listed on Table 6.2-22 in this section would suffer some sort of negative impacts if proper mitigation measures are not taken, all of those listed require detailed impact assessments in the EIA study on the Feasibility Study stage, where tangible mitigation measures to be examined.

On the other hand, the matters that have a large uncertainty if negative impacts and preconditions for the impacts will arise are summarized on Table 6.2-23 in the next section as items requiring a confirmation survey and a detailed assessment in the EIA study on the Feasibility Study stage.

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Table 6.2-22 Mitigation Measures for Environmental and Social Impacts of the Project (Evaluation with the IEE study)

Items Mitigation Measures Natural protected area/conservation area

Protection of greenbelt band on the site border: the 100 - 200 meters of shoreline belt in the project site from the highest tide point

landward from the shoreline, the 50 - 75 meters of riverside belt on the north bank of river that flows down

along the south border of project site Conservation of the planned protected forest area in the inland hilly area of the

peninsula of which the project site is located along the east coast Proper control measures of emission gases (See the previous section ‘h. Air

pollution’ in impact evaluation) Cultural heritage

Protection of the religious monument, Bukit Santri: Proper control measures of emission gases (See the previous section ‘h. Air

pollution’ in impact evaluation) Sensitive natural environment, biota and ecosystem

Preservation of mangrove trees and greenbelt band along the riverside and seaside: Detailed assessment study on the functions of environmental services exerted by

the concerned mangrove forest, and planning and implementation of the conservation measures necessary for the mangrove

Coordination planning and its implementation for the protection of the mangrove trees and the preservation of the greenbelt (See the section above of ‘Natural protected area/conservation area’)

Preservation of coral reefs: Measures to control thermal effluent water in compliance with the relevant

effluent standards (Ministry of Environment Regulation No.8 / 2009, annex 2) Design concept of coal unloading berth and jetty facilities with sufficient

considerations not to adversely affect nearby coral reefs Geographical features

Procurement of earth filling material from legitimate business operators of quary and borrow pits with legal clearance of AMDAL Preparation of ‘List of legitimate operators in quary and borrow pits business’ in

the FS/EIA study Statement of the conditionality in the tender documents of construction phase

that earth filling material should be procured from a legitimate business operator Measures in transportation of land-fill earth material for land preparation: Measures for traffic safety and controlling dust dispersion in transport of earth

material during the construction phase of project Land reclamation, dredging and ground subsidence

Prevention of ground subsidence and soil erosion associated with land reclamation and preparation Using staged construction method for land reclamation Using proper technique of embankment fill compaction

Air pollution Gas emission control measures: Simulation of emission gas diffusion and maximum ground concentration for

SO2, NOx and Dust Proper design of stack height

Compliance with the emission gas standards of coal thermal power plant (Ministry of Environment Regulation No. 21/2008, Annex 1b) and environmental conservation Installation of electrostatic precipitator for dust control Installation of flue gas de-sulfurization system (FGD) Employment of low-NOx technology as combustion improvement of boiler,

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Items Mitigation Measures

low-NOx burner De-nitrogen (De-NOx) system (if necessary)

Water pollution Waste water treatment: Installation of wastewater treatment plant and system to comply with the

effluent standards of thermal power plant (Ministry of Environment Regulation No. 8 / 2009) and to contribute on environmental conservation

Coal transportation and storage and coal ash management

Dispersion control system of coal dust: Design of dust-dispersion-control facility such as conveyer casing, windbreak

facility and watering of coal storage yard, and a greenbelt outside of windbreak fence

Preparation of the coal-storage-yard management plan Prevention of leachate from coal ash disposal area: Preparation of coal ash management plan with consideration of leachate risk by

natural disaster Application of optimal technology to a controlled landfill type of ash disposal

area Sufficient leachate control measures including liner work, leachate collection

and drainage facility, and leachate treatment facility Noise and vibration Simulation of noise and vibration on the site borders of project

Measurement of noise and vibration and calculation of attenuation pattern on site borders

Employment of proper devise for noise/vibration reduction or control, based on simulation results

Sound shield measures on site borders and other standard measures Resettlement Preparation of resettlement management plan for residents along the south bank of

river that flows down on the south border of project site Public dialog and consultation with the concerned residents Support measures for finding new settlements and non-degraded living and

livelihood after resettlement Consultation with and preparation of displacement plan for the people engaging in

crop farming and fish farming inside the concerned project site of PLN land Permission of grace period on displacement for a harvest cycle of crop and fish

farming Support measures for their livelihood after displacement

Misdistribution of benefits and damages

Planning and preparation of funding for local environmental improvement Support fund for preserving living environment (ambient air and water

environment), ecological environment (coastal and marine vegetation and ecosystems) and primary resources (fishery resources)

Source: Prepared by the Study Team

4) EIA matters with uncertainty of occurrence at present stage and Environmental Monitoring

Along with the mitigation measures, what need to be checked and monitored in the following phases of the project is summarized in the next table.

This section summarizes the following two issues. While Table 6.2-23 summarizes the items that requires a confirmation survey and a detailed assessment in the FS/EIA study in order to confirm the

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onset of preconditions for any concerned impacts and clarify predictable negative impacts, Table 6.2-24 does the items of environmental monitoring required at the implementation and operation stage of the Project. If impacts are identified in the confirmation survey and assessment on the matters on Table 6.2-23, planning of necessary mitigation measures is required. Table 6.2-23 Confirmations and detailed assessments to be conducted in the FS/EIA study

Objectives of Confirmation Surveys and

Detailed Assessments Subjects of Confirmation and Assessment

Stage of the Project

Confirmation of the concerned marine conservation area with the provincial and district administration units charged with relevant spatial plans

Purpose of setting the concerned marine conservation area

Impacts on the conservation area of coal unloading berth and jetty facilities, and of thermal effluent water

In FS/EIA study

Confirming the need of dredging for installation of coal unloading berth and jetty facilities

Impacts on hydrographic conditions of the sea, sea bed, nearby coral reefs and mangrove trees,

Impacts of treatment and disposal of dredged soil if dredging is necessary

In FS/EIA study

Conducting diffusion simulation of discharged thermal effluent water

Impacts on nearby coral reefs, benthos and other marine lives and ecosystems, including ones with floating period

In FS/EIA study

Survey on the distribution of fauna and flora and ecosystems to be protected in the Project Site and surrounding offshore area

Preparation of fauna and flora list Existence or non-existence of rare

species, endemic species and precious ecosystems to be protected

Mitigation and protection measures when those living organisms requiring protection are identified

In FS/EIA study

Issuing an official letter to the Hazardous Management Division of MOE and confirming the special permission for ash-disposal site

Confirmation of permission for installation position of coal ash disposal area

In FS/EIA study (on the early stage)

Design of plant water utilization (In case deep wells are chosen as its source)

Impacts on local water resource and water usage

In FS/EIA study

Assessment and consideration of mitigation measures at the time of planning coal-carrier ship, coal unloading berth and jetty facilities

Impacts on offshore fishery activities, including those around the Panjang Island, and marine transportation

In FS/EIA study

Source: Prepared by JICA Study Team Table 6.2-24 Monitoring to be conducted for the Project

(Conceptual summary with the IEE study)

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Regulations on Monitoring Subjects of Monitoring Stage of

the Project Environmental monitoring in accordance with MOE Regulation No.86/2002 and No.13/2010

Monitoring of ambient air (For comparison with the baseline data at IEE) Monitoring of water quality (river, sea

water) (For comparison with the baseline data at IEE)

In construction and operation phase of plant

Monitoring of gas emission Monitoring of effluent water (including

thermal effluent) Monitoring of noise/vibration (For comparison with the baseline data at IEE) Monitoring of odor

In construction and operation phase of plant

Environmental monitoring (the target of environmental conservation and the monitoring method need to be planned in the EIA study)

Monitoring of coral reefs, adjacent fisheries, seaside and riverside mangrove and greenbelt

In construction and operation phase of plant

Environmental monitoring in accordance with MOE Regulation No.86/2002 and No.13/2010

Monitoring of implementation of the Environmental Management Plan (including management of ash disposal area and coal storage area)

In the operation phase of plant

Source: Prepared by JICA Study Team

5) Environmental and social considerations process in the later stage As stated in the beginning of 6.1 (7), if the project proceeds to the feasibility (FS) study, the

proponent of the project on the Indonesian side should conduct an environmental impact assessment, called AMDAL in Indonesia, as required by Indonesian environmental regulations.

The concerned procedure will be as shown in the below picture. AMDAL also requires stakeholders meetings and consultation to explain about the project and build consensus among concerned people. As premises to have approval in AMDAL, there are several permissions required, such as PLN’s site legal status, land certificate, permit from MEMR, permit from Bupati (District Head), location permit from district government and also construction permit from district government, and finally the approval of AMDAL and environmental permit will be issued.

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Pre-FS Study FS Study Construction Stage

KA ANDAL DRAFT

SECRETARIAT OF BADAN PENGELOLAAN LINGKUNGAN HIDUP (BPLH)

Address : Jl. Kh Sam,Un No. 7 Serang-BantenEmail : [email protected] or [email protected]

Phone : +62 254 213862 ; Fax : +62 254 200177

EVALUATION KA ANDAL WITH :•AMDAL TECHNICAL TEAM OF SERANG DISTRICT•AMDAL COMMISSION TEAM OF SERANG DISTRICT

REVISION OF KAANDAL

APPROVAL OF KA ANDAL

EVALUATION ANDAL, RKL, RPL DOCUMENT WITH •AMDAL TECHNICAL TEAM OF SERANG DISTRICT•AMDAL COMMISSION TEAM OF SERANG DISTRICT

REVISION OF ANDAL, RKL, RPL DOCUMENT

APPROVAL OF ANDAL, RKL, RPL DOCUMENT

AMDAL PLAN AMDAL (EIA) process

Note: KA= Terms of ReferenceAMDAL= EIARKL= Environmental Management PlanRPL= Environmental Monitoring Plan

Required Permitduring

AMDAL process

PLN’s site legal status

Land certificate

Principal permit from MEMR

Principal permit by Bupati(District Head)

Location permitfrom District Gov.

Construction permit from District Gov.

Finally, AMDAL approval and Env. permit

IEE Study

Figure 6.2-5 Environmental and Social Considerations Process after the Pre-FS and IEE study

Source: JICA study team (6) Construction Schedule

1) Construction Plan of Model Power Plant Project This section describes the construction plan for Ultra Super Critical (USC) 1,000 MW × 1 unit

Coal-Fired Thermal Power Plant with additional 1,000 MW × 1 unit for future plan. The Power Plant will be constructed on the land of PLN in Bojonegara, Indonesia.

This Construction plan is Unit-1 1,000 MW Coal-Fired Thermal Power Plant only.

2) Preparation Procedure of Model Power Plant Project The process of the project when implementing under PLN is described in the following.

Refer to Figure 6.2-6 1,000 MW Coal Fired TPP Planning Schedule;

Table 6.2-25 Project Preparation and Bid Stage

No. Descriptions Period Remarks

A. Basic Agreement on FS for 1,000MW Coal-Fired TPP Project Development Plan

Up to End/December/2012

B. FS for 1,000MW Coal-Fired TPP Project Development Plan 10 Months

C. Prepare Bid Document and Bidding 13 Months

D. International Competitive Bid (ICB) for EPC Contract Until end of 2016 14 Months

Source: JICA study team

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3) Construction Schedule of Model Power Plant Construction period of the Model Power Plant is based on the former experience of Power Plant

Construction project that was 48 months in total duration from the commencement of construction to commercial operation.

In addition, Construction period of transmission line takes 30 months from the start of construction.

The end of construction is to be carried out until power receiving at the time of construction of plant

Refer to Figure 6.2-7 1,000 MW Coal Fired TPP Construction Schedule;

Table 6.3-26 Project Execution Stage

No. Descriptions Period Remarks A. 1,000MW Coal Fired TPP Construction

From 2017 to with in 2021

48 Months (4 Years)

1.1 Site Preparation 1.2 Design and Engineering 1.3 Procurement of Equipments & Material 2.1 Civil & Architectural Works 2.2 Transportation of Equipments & Material 2.3 Erection Works 2.4 Instauration of Piping and Cabling

3.1 Pre-Commissioning and Commissioning Operation

3.2 Commercial Operation

B. 500kV Transmission Line Construction From 2016 to with in 2019

30 Months (2.5 Years)

Source: JICA study team

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-56

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-57

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-58

(7) Project cost and Economic/Finance Analysis 1) Project cost

JICA study team estimated the project cost based on the information in Indonesia such as IPP projects. The estimation results of construction for one unit and two units (both include the common facilities) are in Table 6.2-27. The estimation is based on the following assumption.

The estimate for Baseline Cost for Power Plant assumes use of 3,700 kcal/kg to 4,300 kcal/kg coal.

The land cost is not included in Baseline Cost for Power Plant. Baseline Cost for Power Plant doesn't include the tax and duty of Indonesia. Baseline Cost for Power Plant for two units is assumed to construct two units at once (2nd

unit’s construction is scheduled half year later after 1st unit’s construction commencement). Environmental measures to observe the environment standard (e.g. wastewater treatment,

sound insulation facilities, flue gas treatment facilities etc26) are included in the following cost estimate, but the cost for safeguard mitigation measures outside the power plant is not included, since these measures cannot be specified at this stage and their cost cannot be estimated.

Table 6.2-27 Project cost estimate

(US$ million)

Breakdown of Project cost 1 Unit × 1,000MW

2 Units × 1,000MW

(A) Construction cost for power plant (EPC) 1,548.9 2,788.0 (B) Construction cost for transmission line 60.0 60.0 (C) Price escalation for (A)& (B) i) 163.6 289.5 (D) Sub-Total: Construction cost: sum of (A) to (C) 1,772.4 3,137.5 (E) Consulting service cost 47.6 85.7 (F) Sub-Total: Baseline Project Cost: (D)+(E) 1,820.0 3,223.2 (G) Allowance for project: (F)*5% 91.0 161.2 (H) Budget for Total Project Cost: (F)+(G) 1,911.0 3,384.4

i) ((A)+(B)) × (1.02454 – 1) : Based on the assumption that it will take 4 years to start construction and increase of 2.45% per year which is the 10 year average of US CPI.

Source: JICA study team

Financial and economic analysis is conducted based on the project cost above.

2) Financial analysis In this section, in order to examine sustainability and financial impact of Model Power Plant, the

financial analysis is conducted. Financial Internal Rate of Return (FIRR) and Net Present Value (NPV) are estimated based on the following parameters. ((i) and (ii) in Table refer to Case 1 (construction of one unit and common facilities) and Case 2 (construction of two units and common facilities), respectively.)

26 The applied technologies are discussed in 6.2 (3).

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Table 6.2-28 Assumption for financial Analysis (Base case)

Assumption in the model Notes Initial investment Total project cost (i) US$1,911.0 million

(ii) US$3,384.4 million Discussed in 6.2 (7) 1)

O&M costs O&M cost for plant (i) US$51.16mil/year

(ii) US$92.09mil/year (i) US$7.30/MWh (ii) US$6.57/MWh

O&M cost for transmission line

US$1.1mil/year

Increase in O&M cost 4.41% Weighted average of US CPI’s 10 year average and Indonesia CPI’s 5 year average (USD based expense and IDR based expense are assumed to be 50:50.)

Fuel (i) US$400.72 mil/year (ii) US$801.43 mil/year

US$57.18/MWh

Increase in fuel cost 5% Round figure of ICI-4 increase rate after 2008

Output Plant capacity factor 80% Auxiliary power consumption ratio

8%

Electricity generated (i) 7,008GWh (ii) 14,016GWh

Project duration 30years Electricity sales Initial tariff as of 2017 US$0.089 The PLN’s average sales price in 201027

multiplied by the historical tariff increase rate28

Increase in tariff (after 2017) 5.00% The average increase rate per year after 2001 is 8.5%, but the increase rate after 2017 is assumed to be lower considering the current political situation.

Finance Equity (i) US$286.66 mil

(ii) US$507.66 mil 15% of total project cost

Loan (i) US$1,757.41mil (ii) US$3,109.21 mil

Repayment period 25 years Grace period 6 years Interest rate per year 4.03% Swap rate29 + 0.5% margin to be paid to

MOF Frequency of int. payment Semi-annual Commitment fee 0.15% to undisbursed amount Depreciation Depreciation 20 years Remaining value 0% Depreciation method Fixed amount Tax and duties Corporate tax 25%

Source: JICA study team

27 Rp. 699.09 (Source: PLN statistics 2010) 28 ((1+3.47%)^5). 3.47% is CAGR(compound annual growth rate) of tariff increase after 2003. 29 A multilateral development agency’s condition (LIBOR 6 month plus 0.4%) is assumed to be converted to the fixed

interest rate.

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(a) Base case

Based on Table 6.2-28, the estimation results are as follows:

Table 6.2-29 Results of Financial Analysis: Base case

(i) Case 1 Unit 1 + Common facilities

(ii) Case 2 Unit 1 & 2 + Common facilities

Financial IRR 12.55% 13.84%

NPV (US$ million) 93.73 570.46

Source: JICA study team

Often, the hurdle rate for the project is the weighted average cost of capital (WACC). For example, PLN’s WACC in 2011 is 8.34%30. However, LIBOR was quite low throughout 2011, so the debt cost may increase in the future. Therefore, 12% was set as the hurdle rate. This 12% is based on the round number of sum of PLN’s debt cost and the inflation rate in Indonesia, and PLN refers to this figure upon its investment decision. In this case, FIRRs for both Case 1 and Case 2 are higher. NPV is estimated using this 12% as the discount rate.

(b) Sensitivity analysis

The impact on Model Power Plant’s profitability by the electricity tariff, the increase rate of electricity tariff, construction cost and the increase rate of fuel cost is as below.

If the electricity tariff is assumed to remain the same until 2017, the electricity tariff is US$0.075/kWh31 and both Cases will be lower than the hurdle rate.

Table 6.2-30 Impact of Initial Tariff as of 2017

($/kWh)

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

FIRR NPV (US$ mil)

DSCR Min FIRR NPV

(US$ mil) DSCR Min

Base 0.089 12.55% 93.73 1.52 13.84% 570.46 1.72

0.075 8.21% -555.91 0.93 9.35% -708.87 1.09

Source: JICA study team

Furthermore, the electricity tariff is assumed to be increased by 5% after 2017 in the base case. However, if the tariff increase rate remains at 3.47% (the historical CAGR from 2003), FIRR is much lower than the hurdle rate for both of Case 1 and Case 2.

30 Hearing from PLN 31 Rp. 699.09 (Source: PLN statistics 2010)

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

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Table 6.2-31 Impact of Tariff Increase Rate

Tariff increase rate

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

FIRR NPV (US$ mil)

DSCR Min FIRR NPV

(US$ mil) DSCR Min

Base 5.00% 12.55% 93.73 1.52 13.84% 570.46 1.72

CACR after 2003

3.47% 5.72% -639.17 0.93 7.26% -894.82 1.17

+1% 6.00% 15.31% 682.89 1.73 16.63% 1,748.79 1.95

Source: JICA study team

As for changes of the construction cost, price escalation until 2016 is included in the project cost as mentioned in Table 6.2-27. If this escalation is lower than the current expectation (e.g. escalation is 50% of the current expectation; as a result, the construction cost becomes lower than 1).), FIRRs for both Cases will improve. (Refer to “Escalation ▲50%” and “Escalation ▲100%” in the table below.) On the other hand, if the total project cost is increased by 10% compared with the base case, FIRR for Case 1 will be lower than the hurdle rate, but FIRR for Case 2 will be still higher than the hurdle rate.

Table 6.2-32 Impact of Change in Construction Cost (Case 1)

Total Project Cost (mil US$) FIRR NPV (US$ mil)

DSCR Min

1,911.0 (Base case) 12.55% 93.73 1.52

1,739.3 (Price escalation ▲100%) 13.37% 215.89 1.65

1,825.2 (Price escalation ▲50%) 12.95% 155.01 1.58

2,006.6 (Total project cost 5% increase) 12.15% 25.57 1.46

2,102.2 (Total project cost 10% increase) 11.77% -42.03 1.41

Source: JICA study team

Table 6.2-33 Impact of Change in Construction Cost (Case 2)

Total Project Cost (mil US$) FIRR NPV (US$ mil)

DSCR Min

3384.4 (Base case) 13.84% 570.46 1.72

3,080.4 (Price escalation ▲100%) 14.72% 785.80 1.86

3,232.4 (Price escalation ▲50%) 14.26% 678.14 1.79

3,553.6 (Total project cost 5% increase) 13.40% 450.68 1.65

3,722.8 (Total project cost 10% increase) 13.00% 330.92 1.59

Source: JICA study team

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

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In the base case, the fuel cost increase and tariff increase are the same rate. On the other hand, if the fuel cost increase is higher than the tariff increase rate by 1%, FIRRs for Case 1 are lower than the hurdle rate. On the other hand, the fuel cost increase is lower than the tariff increase rate, the profitability will improve.

Table 6.2-34 Impact of Fuel Cost Increase Rate

Fuel cost increase rate

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

FIRR NPV (US$ mil)

DSCR Min FIRR NPV

(US$ mil) DSCR Min

Base 5.00% 12.55% 93.73 1.52 13.84% 570.46 1.72

-1% 4.00% 13.62% 299.65 1.56 14.89% 982.29 1.76

1% 6.00% 11.02% -144.38 1.48 12.35% 94.23 1.67 Source: JICA study team

(c) Financial Analysis Summary

FIRRs for Case 1 and Case 2 in the base case will be higher than the hurdle rate if 12%, which PLN uses as the investment decision criteria, is the hurdle rate. On the other hand, FIRR for Case 2 in the base case is higher than Case 1 by more than 1% and it is easier to ensure the profitability. However, as examined in the sensitivity analysis, the tariff revenue increase in the same rate as the fuel cost increase is the premise in order to ensure this profitability. (This is the same structure as the existing Indonesian government’s policy. Under the current Indonesian law, the government provides the subsidies to PLN for the difference between PLN’s supply cost plus margin and the revenue collected from end users. Therefore, the fuel increase will actually be covered by the electricity sale revenue.)

The fluctuation of the total project cost also affects the profitability of Model Power Plant. For example, if the currently assumed price escalation component in the total project cost becomes lower than the expectation and the total project cost becomes lower, FIRR for both Cases will improve. (e.g. price escalation is 50% of expectation.) On the other hand, if the total project cost exceeds the base case’s assumption by 10%, FIRR for Case 1 will be lower than the hurdle rate, but FIRR for Case 2 may exceed the hurdle rate. In this way, two unit construction (Case 2) will be easier to ensure the profitability than one unit construction (Case 1), even if there are changes in the assumptions.

3) Economic Analysis In this section, cost-benefit analysis was conducted and Economic Internal Rate of Return

(EIRR) and Net Present Value (NPV) were estimated in order to evaluate the impact by Model Power Plant construction. Upon cost-benefit analysis, the assumptions are basically the same as the one for financial analysis, but the adjustments such as shadow exchange rate to non-tradable goods are made and the financial values are converted to the economic values. USC applied in Model

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

Final Report 6-63

Power Plant are more efficient than sub-critical which are commonly used in Indonesia at present; they consume less coal compared with sub-critical plants, provided that other conditions are the same and the impact on environment will be reduced. However, even with USC, emission of substances affecting environment is not nil, so the external cost for this area was included in the analysis to the possible extent in order to incorporate the impact on neighboring area and broader area. Specifically, they are the emission impacts of (i) SO2, NOx, Total Suspended Particulate (TSP) and (ii) CO2. (In the estimation result, the impact of (i) and (ii) corresponds to “Local externality” and “Global externality”, respectively.) For (i)’s conversion to monetary value, the unit cost of external cost per kWh by World Bank and BATAN32’s study was applied. For (ii)’s conversion, the past three month average of EU ETS’s CER price was used.

On the other hand, replacement of companies’ own power generation using diesel fuel with (additional) electricity purchase from PLN can be considered as one of benefits. When the electricity supply from PLN is in shortage, the commercial/industrial sectors often cover this shortage by own generators using diesel fuel. This generation cost (4,315.43 Rp./kWh33) is more expensive than the electricity supply from PLN. If the supply from PLN increases, companies can expect to replace own power generation using diesel fuel, which is more expensive, with the purchase from PLN. However, it is difficult to estimate the quantity of electricity to shift from self generation to the purchase from PLN, following this Model Power Plant’s introduction. Therefore, the unit price of the benefit is based on the current PLN’s generation cost. i.e. the generation cost by diesel is much higher than the tariff, but the benefit is conservatively estimated by not using this generation cost. The average supply cost (979 Rp./kWh 34 ) as the electricity tariff, before government subsidy, is used for the unit price of benefit and the benefit by this Model Power Plant construction was quantified based on that. Based on the above assumption, the estimation result is as follows:

(a) Base case

Table 6.2-35 Economic analysis, Base case

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

Economic IRR (%)

NPV (mil US$)

Economic IRR (%)

NPV (mil US$)

Cost without externalities 18.59% 1,343 20.77% 3,066

Cost with local externalities 16.48% 976 18.50% 2,333

Cost with local/global externalities 15.20% 765 17.13% 1,911 NPV: 10% discount rate

Source: JICA study team

32 Indonesia National Nuclear Energy Agency 33 PLN’s generation cost using diesel (PLN statistics 2010) 34 JICA study team’s estimate based on “PLN Investor update 2010 H1” and “PLN statistics 2010”

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The Project for Promotion of Clean Coal Technology (CCT) in Indonesia

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Often, development agencies assume 10-12% as the hurdle rate for economic analysis, but both base cases for Case 1 and Case 2 exceed 12%. Furthermore, the unit cost of benefit is conservatively estimated as discussed earlier. Thus, economic IRR will be higher if this benefit is also taken into consideration. In conclusion, construction of the Model Power Plant is economically rational in terms of the national economy.

(b) Sensitivity analysis

In the base case, economic IRR and NPV are estimated based on the assumption which we can expect at present. However, there are possibilities that these assumptions of economic values may divert from the reality in the future. Therefore, the impact of economic value’s changes (construction cost, fuel cost) on economic IRR and NPV is estimated. Each result is as follows:

Table 6.2-36 Change of construction cost: (10% increase)

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

Economic IRR (%)

NPV (mil US$)

Economic IRR (%)

NPV (mil US$)

Cost without externalities 17.20% 1,208 19.25% 2,828

Cost with local externalities 15.20% 841 17.11% 2,094

Cost with local/global externalities 13.98% 630 15.81% 1,672 NPV: 10% discount rate

Source: JICA study team

Even if construction cost on economic cost basis is increased by 10%, economic IRRs in both cases (even with local externalities, or local/global externalities) exceed the hurdle rate. Economic IRRs will be lower than the hurdle rate if the construction cost is increased by approximately 29% and 49% compared with the base cases in Case 1 and Case 2, respectively.

Table 6.2-37 Change in fuel cost (5% increase)

(i) Case 1: 1 unit & Common facilities

(ii) Case2: 2 units & common facilities

Economic IRR (%)

NPV (mil US$)

Economic IRR (%)

NPV (mil US$)

Cost without externalities 18.23% 1,278 20.38% 2,937

Cost with local externalities 16.09% 912 18.09% 2,204

Cost with local/global externalities 14.80% 700 16.70% 1,782

Source: JICA study team

Even if fuel cost on economic cost basis is increased by 5%, economic IRRs for both cases exceed the hurdle rate. Economic IRRs will be lower than the hurdle rate if the fuel cost is increased by approximately 37% and 55% in Case1 and Case 2, respectively.

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(c) Summary for economic analysis

In financial analysis, FIRR for Case 1 is lower than the one for Case 2 and its profitability is limited. However, its economic IRR exceeds the hurdle rate and construction of the Model Power Plant is economically rational for the national economy even in Case 1. Furthermore, there is the certain tolerance against changes in construction cost or fuel cost as well and economic rationality can be ensured under these circumstances. Economic IRR in Case 2 is higher than Case 1 and the net benefit to the society in Case 2 is even higher than Case 1.

4) Financial Scheme At present, PLN plans to implement this Model Power Plant by itself. Under this circumstance,

the financial source for it needs to be considered. PLN has the capacity to procure the finance from the market such as the commercial banks and issuance of the bonds. For example, PLN procured US$2,000 million by issuing the bonds in December 2011 with the tenor of 10 years. Their coupons were 5.5%. However, the finance from development agencies has the advantages, in terms of the lower interest rates and the longer repayment period. Therefore, the large project like this Model Power Plant is preferable for PLN to be financed by development agencies. (For example, a multilateral development bank offers LIBOR+0.4%.)

This Model Power Plant has the room for expansion to the 2nd unit, of which construction will be financially rational by sharing the cost of the common facilities as discussed in 2). On the other hand, there is the uncertainty whether PLN will be able to mobilize all necessary capital costs by itself, since the required capital cost is large (for two units, the estimated project cost is US$3,384.4 million). To address this constrain, the following approach can be the option: the concessional loans from a development agency is utilized to finance the 1st unit including the common facilities (i.e. the project is implemented by PLN itself) and the 2nd unit is implemented by IPP.

Also, there is another approach for PLN to construct the 2nd unit after several years are passed (after the 1st unit construction). Compared with finding finance for two units at once, this approach will be easier to find finance in terms of PLN’s borrowing capacity. However, the number of labourersand equipment for construction and the overhead costs are disadvantageous in case of this phased construction compared with the simultaneous construction for two units, so the construction cost per kW tends to be higher in this phased approach. However, this is not new construction but expansion, so the cost for the common facilities of 1st and 2nd units can be saved. Also, by applying the same specification for equipment as 1st unit, the project cost for 2nd unit can be reduced.

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6.3 New Candidate Site Proposed for Coal-Fired Power Plant

In Indonesia, though promotion of development for coal-fired power plants (CFPP) is advanced politically, there are few new proposed potential sites in 2020 and afterwards. Also, new developments in green field outskirts in Jakarta and surrounding area, at where increase of further electricity demand will be still expected to be steadily, are strongly desired. During the Study for Promotion of CCT, the counterpart in Indonesia requested JICA Study Team to advise the examination of other potential candidate new sites in consideration of the development of CFPP in the future, consequently both parties cooperatively decided that JICA Study Team proceeded to simple and basic study primarily based on the literature survey on the maps and on-site reconnaissance.

So, in this simple study, three newly candidate potential sites were selected and extracted along coastal area on within approximately one hundred (100) km range from Jakarta (between westward “Labuhan” and eastward “Pangarengan”) as shown in Figure 6.3-1. Study was scheduled from November 2011 to February 2012 including re-commission procedure to local sub-consultant, besides two (2) site survey trips to Indonesia, December 2011 and January-February 2012, carried out by JICA Study Team.

Range of Coastal Area

Figure 6.3-1 Range of Study Area

Source: JICA Study Team

(1) Establishment of Joint Study Team Joint Study Team with counterparts was established for implementation of Study, which consisted

of the following organizations.

DGE (Directorate Generate of Electricity in Ministry of Energy and Mineral Resources)

MOE (Ministry of Environment)

PT. PLN (Persero)

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JICA Study Team

LC Team (Local Consultant: PT. INDOKOEI INTERNATIONAL)

(2) Zoning for Candidate Area Brief off-site literature survey related to land utilization, land acquisition with low difficulties

exception of populous area, aspect of environmental and social considerations was conducted based on topographical maps of 1/25,000, several charts and natural social environmental document. Besides, as a result of comparing and examining the detailed survey location for narrowing down the area suitable for location by Joint Study Team, zoning work of three areas shown in Fig. 6.3-2 was performed, and it has agreed to advance detailed further investigations in these areas. Still, the course for transmission line planning was confirmed with PT. PLN and P3B.

Figure 6.3-2 Consensus Study Zone

Source: JICA Study Team

(3) Detail Off-Site Literature Survey in Zoning Area Joint Study Team examined and compared several locations to narrow down target proposed

locations (land area: around 1,000 ha each) from three (3) Zoning Area in consideration of the off-site literature survey from the viewpoint of aspects from 1) to 7) below.

1) Topographic feature of onshore and offshore, Land utilization of onshore and offshore, Land acquisition with low difficulties, Residential living environment

2) District Spatial Plan, Surrounding industry, Improvement of residential infrastructure

3) Local regulation for regional development, Environmental protection area

4) Geology of onshore and offshore, Bathymetric environmental condition, Fishery right

5) Raw water resources, Industrial water supply

6) Capacity of existing transmission line, Route for new transmission line

Zoning

Zoning

Zoning

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7) Transportation of coal, Traffic route and records for coal

(4) Joint On-Site Reconnaissance in Proposed Site Selection Locations In due course by a meeting of the Joint Study Team, five (5) proposed locations below were

narrowed down from three (3) Zoning Areas as target of detailed on-site investigations. Additionally, Joint On-Site Reconnaissance was conducted by the Joint Study Team to select and extract potential candidate sites (150 ha ~ 300 ha) from respective proposed locations. Surveys at local administration and related investigation of administrative rules and regulations were simultaneously implemented as well as On-Site Reconnaissance.

1) Proposed Location in Zoning Area 1:

Serang District, A Location 2) Proposed Locations in Zoning Area 2:

Serang District, B Location Tangerang District, C Location

3) Proposed Locations in Zoning Area 3:

Karawang District, D Location Karawang District, E Location

(5) Selection and Extraction of Potential Candidate Sites Proposed for Coal-Fired Power Plant Based on the examination on the map, the Joint On-Site Reconnaissance and local regulation & low,

potential candidate sites were studied and examined among the respective five (5) selected locations at the Joint Study Team meeting, considering the possibilities for land acquisition of 150 ha – 300 ha as aptitude site for CFPP. Finally, three (3) candidate sites (Serang District B Site, Karawang District D Site, Karawang District E Site) were potentially selected and extracted while remaining two (2) candidate sites were recognized as to be low aptitude from the aspects of the location and environmental condition.

In addition, Indonesian counterparts keep in the state of no decision whether these proposed candidate sites in this basic study will progress to next step of preliminary feasibility study in order to forward Project Plan, besides it is supposed that correspondence will be considered in accordance with other candidate sites, fund plans and future development plans, etc.