Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment February 2021 Author Qusairy Wardana Harahap Pius Ginting Muhammad Rushdi EdyHaflah Burmansyah Distincta Layout by Syaviera Aninda Putri Said AEER 2021 Climate Emergency Mitigation Monitoring Program Website: http://aeer.info [email protected] Email: Table of Contents Table of Contents i List of Tables ii List of Figures iii Glossary v Foreword viii Executive Summary xii Introduction xviii CHAPTER 1 Coal in South Sumatra 1 1.1 7 1.2 12 Analysis of Coal Types in South Sumatra 1.3 14 South Sumatra Mining Area CHAPTER 2 Coal Export Analysis 17 Dynamics of Low Calorie Coal Exports in South Sumatra 2.1 18 2.2 24 Analysis of Coal Exports in Indonesia Mine Mouth Power Plant Absorbs Low Quality Coal 2.3 30 Reserves in South Sumatra Development of Low Quality Coal Industry Infrastructure 2.4 32 in South Sumatra CHAPTER 3 Mine Mouth Power Plant Funding 35 Development of Mine Mouth Power Plant Transimisi 3.1 Chinese Investment in Mine Mouth Power Plant in South 37 Sumatra CHAPTER 4 Contradictions with Carbon Emission Reduction 44 Initiative 4.1 Contradictions with the Paris Climate Accord 45 4.2 National and Local Emissions Reduction Initiatives 47 CHAPTER 5 Impact of Mine Mouth Power Plant 49 5.1 50 5.2 51 Health Impacts of Lignite 5.3 55 Deforestation in Muara Enim and Lahat Regencies 5.4 61 Loss of Agricultural Land Access CHAPTER 6 Conclusions and Suggestions 65 River Pollution Due to Coal Waste Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment i List of Tables Table 1.1 6 Table of Coal Resources and Reserves in South Sumatra by Table 1.2 7 Regency (in millions of tons) (Geoportal ESDM, 2020) Characteristics and Uses of Coal Data System (IEA, 2010 and Table 1.3 9 Coal Characteristics, Purdue University) Types of Coal in Each Indonesian Mining Company (Mills, Table 1.4 10 2011) Characteristics of PTBA coal trademarks (PTBA Presentation, Table 2.1 28 2017) 34 Table 2.2 List of Coal Companies’ Mouth Mine Recapitulation of Transmission Network Development Plan Table 3.1 36 (kms) (RUPTL 2020-2028) Power Plant in South Sumatera Province (RPJMD South Table 5.1 51 Sumatra 2019-2023) Pattern of Outpatient Disease in South Sumatra (Muara Enim Table 5.2 62 Regency in Numbers, BPS 2019) Indicators of Enim River Waters (Ijazah, et al., 2016) Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment ii List of Figures Figure 1.1 2 Total Resources and Reserves of Indonesian Coal (PSDMBP Figure 1.2 3 ESDM, 2019) Total Coal Resources and Reserves in Three Provinces in Figure 1.3 4 Indonesia 4 Figure 1.4 Composition of South Sumatra coal by Calorie Coal Production in Three Provinces in Indonesia (ESDM Figure 1.5 7 Perfomance Report) General Classification of Coal by Rank Value and Utilization Figure 1.6 11 (Trus, 2010) PTBA Coal Sales by Coal Trademark (PTBA Corporate Figure 1.7 12 Presentation, 2017) 14 Figure 1.8 Coal Distribution of South Sumatra Province Total Production Coal Tanjung Enim (Annual Report PTBA, Figure 1.9 15 2019) Total Lignite Exports from Several Lignite Exporting Figure 1.10 15 Countries (TradeMap, 2021) Total Lignite Exports from Indonesia to China (TradeMap, Figure 1.11 16 2021) 18 Figure 2.1 Total Lignite Exports of Each Province (BPS, 2019) 19 Figure 2.2 Coal Transport Train in Muara Enim Regency 20 Figure 2.3 South Sumatra Coal Transportation Route (Hardian, 2011) Coal Transportation Scheme in South Sumatra (Hardian, Figure 2.4 22 2011) Coal Transportation Scheme in Kalimantan (Compiled from Figure 2.5 23 available data) Coal Transportation Lines by Train and Coal Stockpile in Figure 2.6 24 Lahat Regency Transportation Comparison Scheme between PT Adaro and Figure 2.7 26 PTBA (AEER, 2021) Self-igniting Coal at Stockpile in West Banko, PTBA Stockpile Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment iii List of Figures Figure 2.8 27 Stockpile of Mawar Site Muara Tiga Besar IUP PTBA (Persero), in Sirah Island Area, East Merapi, Lahat Regency, Figure 2.9 29 After Self-igniting, April 2019 Comparison of Mine Mouth Power Plant Development Plan Figure 2.10 32 in South Sumatra from Three Documents 33 Figure 2.11 Coal Transportation Development in South Sumatra Map of Electricity System of South Sumatra Province (PLN, Figure 3.1 38 2020) 40 Figure 3.2 South Sumatera Mine Mouth Power Plant 1 52 Figure 5.1 Sumsel Mine Mouth Power Plant 8 Deforestation in Muara Enim and Lahat districts in 2014, Figure 5.2 53 2017, and 2020 Mine Pits and Forest Cover in Merapi Barat Subdistrict, Figure 5.3 54 Lahat Regency Area of Non Vegetation Area in The District Around Coal Figure 5.4 55 IUP in Muara Enim Regency Conflict Between Humans and Tigers in South Sumatra Figure 5.5 57 Province Number and Percentage of People Working in Agriculture Sector in South Sumatra Province (South Sumatera BPS, Figure 5.6 57 2019) Gross Regional Domestic Product (GDP) on the Basis of Constant Price (ADHK) 2010 in South Sumatra during Figure 5.7 59 2010-2019 (South Sumatera BPS, 2019) Sutet 500 kV Tread in Tanjung Agung Village, Muara Enim Figure 5.8 60 Regency Sutet Network Site 500 kV for the Needs of PLTU Sumsel 8 Figure 5.9 61 in Muara Enim Regency 63 Figure 5.10 Residents of Tanjung Lalang Village Bathe in Enim River Construction of Embankment for Water Intake Channel of Figure 5.11 64 PLTU Sumsel 8 in Enim River, Tanjung Lalang Village Enim River is Murky and Muddy, Complained the Villagers of Keban Agung Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment iv Glossary • Agglomerating : a parameter that indicates strength of coal residue and • Air dried basis (adb): its ability to withstand 500 grams load without any damage/destruction. a parameter value that does not take into account • As received (AR): coal surface water content The value of the total coal parameter that takes into account the content of air, according to the circumstances when taken in • Ash content: the field. • Bituminous: amount of residue from coal combustion • Caloric value: a type of coal with lower quality than anthracite • Conveyor belts: an amount of heat produced from coal combustion continuously-moving strip of rubber that are used to • Coal reserve: move or transport goods or materials horizontally or at an angle. a part of coal deposits with known dimensions, quantity distribution, and quality, which at the time of feasibility assessment is • Coal resource: declared eligible to be mined. part of coal deposits that are expected to be utilized. It is divided based on the level of geological confidence determined qualitatively by geological conditions complexity and quantitatively by the distance of the point of information. This resource can be increased to • Cooking coal: reserve if after a feasibility study is declared feasible. a type of coal that is used to make coke in steel and iron • Deadweight tonnage (DWT): production industry. a measure of how much weight a ship can • Fixed carbon: carry. an amount of carbon left after coal combustion, after • Lignite: volatile matter is eliminated a type of coal with the lowest quality, characterized by low calorie • Metallurgical process: and high water content a process that is used for the extraction of metals in their pure form. Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment v Glossary • Non-vegetation areas: a region that is not covered by green leaves • Open-pit mining: including settlements, bodies of water (rivers and lakes), or mining areas. surface mining technique of extracting rock or minerals from the Earth by their removal from an open-air pit. This form of mining • Steaming coal: differs from extractive methods that require tunneling into the earth. • Sub-bituminous a type of coal commonly used to move power plant turbine. : a type of coal with caloric value 4,165 – 5,700 kcal/kg • Supercritical: and water content 10-35 percent. one of boiler technology used in coal power plant with • Total moisture: higher efficiency than subcritical. • Vegetation area: water content inside coal based on field condition. a region that can be forests, plantations, rice fields, or • Volatile matter: other areas covered with green leaves. a measure of the non-water gases formed from a coal sample during heating. Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment vi Coal Mining in Lahat Regency Low Carbon Development of South Sumatra Has the Potential to be Hampered by Low Quality Coal Investment vii Foreword South Sumatra Province is one of the coal source locations in Indonesia in addition to South Kalimantan and East Kalimantan. However, compared to the two provinces in Kalimantan, South Sumatra's coal production is lower. This is certainly conducive to making room for the development of renewable energy, thus contributing to the reduction of regional, national and global greenhouse gas emissions. However, currently the development of infrastructure and coal utilization in South Sumatra is very intensive. This can be seen from the improvement of railways, the construction of mine-mouth power plants, and other downstreaming agendas such as coal gasification programs. This is certainly worrying for the goal of achieving low- carbon development in South Sumatra Province.