Plans are in place to develop Indonesia’s nuclear power capacity to overcome the country’s shortage of electricity and ease its dependence on hydrocarbons. However, some concerns remain as to the safety of atomic energy in a quake-prone region so soon after the disaster in Japan, with opponents to the scheme pushing alternative energy as the answer to Indonesia’s power needs.

In late November, state enterprise minister Dahlan Iskan announced that the government had given initial approval for the construction of a 200-KW nuclear power station and for a second plant with a planned output of 2 MW, as part of the state’s programme to boost electricity generation capacity.

Addressing a seminar on energy policy in parliament, the minister said that evolving technology meant that new power stations would be far safer and better able to withstand disasters than the station at Fukushima, which was badly damaged in the quake and subsequent tsunami that devastated parts of Japan in March.

“In the future, whether we like it or not, nuclear power has to be added because it’s cheap and reliable,”

Dahlan told local media.

The country already operates three small reactors for research purposes and has long had plans to expand this capacity to large-scale plants to produce electricity to be fed into the national grid. In 2007 legislation setting out long-term national development plans stipulated that nuclear power plants could be in operation as soon as 2015, though that seems less likely as the project suffers from deadline creep.

Indonesia already operates three small reactors for research purposes
Indonesia already operates three small reactors for research purposes and has long had plans to expand this capacity to large-scale plants to produce electricity

In its long-term economic development plan, up to 6000 MW of nuclear energy generation capacity is to be installed by 2025, with the National Nuclear Energy Agency (BATAN) currently conducting surveys of a number of sites to determine suitable locations for the first of the power stations.

Though the announcement has been made that a new plant will be constructed, other details still remain to be finalised. Among these is who will operate the power station. State electricity company Perusahaan Listrik Negara (PLN) has put up its hand, with the firm’s managing director saying on November 29 it was ready to add to its portfolio.

“We don’t know which company or agency will be appointed,” Nur Pamudji told the Antara news agency. “But we’re ready for the job if the government decides to appoint us.”

It is also unclear who will build the plants, with firms from South Korea, Russia and Japan potentially in the running for the lucrative contracts, and how much the power stations will cost.

95% of Indonesia’s electricity is generated by plants using fossil fuels

The need to expand Indonesia’s generation capacity is great, with almost 30% of the country’s 240m people not having access to the main power grid. The situation will only get worse unless immediate steps are taken, according to Tatang Soerwidjaja of the Bandung Institute of Technology (ITB), with electricity demand in Indonesia set to quadruple in less than 15 years.

“Such an extraordinary increase in a relatively small amount of time would be impossible to tackle without taking recourse to building nuclear power plants,” Tatang said in late November.

Currently, just over 95% of Indonesia’s electricity is generated by plants using fossil fuels, with coal representing almost half this total and most of the balance provided by oil and natural gas, according to the International Monetary Fund (IMF).

However, the government is looking beyond nuclear as its only option and is seeking to utilise the country’s vast geothermal resources, estimated as being the largest in the world. With support via a $300m loan from the World Bank, the state-owned firm Pertamina Geothermal Energy will be developing two fields on Sumatra and Sulawesi, with a combined output of 300 MW. While only a fraction of the 4000 MW of geothermal capacity the government has said it wants to develop, it is a start.

Some believe, however, that alternative energy does not have the capacity to meet Indonesia’s growing needs. Tri Murni Soedyartomo, a senior researcher at BATAN, said that with Indonesia’s oil reserves set to dry up in less than 15 years and its natural gas deposits to be exhausted in around 60 years, the use of nuclear energy became a matter of urgency if the country was to continue to grow.

“It is forecast that Indonesia’s population will reach 285m in 2025 and 360m by 2050. The challenge now is how do we supply energy to this amount of people,” Murni said in early November.

With Fukushima fresh in the minds of many, it may be a hard sell for the government to get popular opinion behind the planned nuclear energy programme. It is likely to enjoy support among the 30% or so of Indonesians still without power and for many in the industrial sector whose production is at times threatened by blackouts. That said, it may be difficult to balance the needs of the economy with the concerns of society.

Note: This article was published on behalf of  Oxford Business Group, the views and opinions expressed in this article are those of the authors and do not necessarily state or reflect the views of  Thailand Business News

About the author

Oxford Business Group (OBG) is a global publishing and consultancy company which produces original economic and business intelligence on markets in the Middle East, Africa, Asia, Eastern Europe and the Caribbean.

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