Mitsubishi Corp. is planning on investing in the energy sector. Energy and Mineral Resources Deputy Minister Widjajono said the Japanese company will invest in the processing of coal to natural gas in South Sumatra. “I will be meeting with the people from Mitsubishi in the near future,” said the deputy minister on Tuesday.
Indonesia has large coal reserves which have yet to be optimized. According to Widjajono, some 80 percent of coal is intended for exports, while only the remaining 20 percent are allocated for the domestic market. Coal can be transformed into gas by using underground coal gasification method. Gas produced from this method is more affordable and, therefore, can be utilized to generate electricity. Mitsubishi has offered a selling price for the company’s gas product, which is 10 cents per kilowatt-hour. The price is lower that fuel generated electricity which can cost up to 36 cents per kWh. “In fact, coal—when used to generate electricity—has better base load, However, the selling price is not to good, so, people won’t sell it,” said Widjajono.
The natural gas substitute refinery is expected to begin operations in 2017. The construction process will begin next year. Despite being processed in South Sumatra, the gas will be distributed to Java through pipes. “South Sumatra in is national energy powerhouse. The electricity costs Rp 700 per kWh. Imagine if we can use gas and coal,” Widjajono added.
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