Sunday July 13, 2008

Rolling blackouts in Indonesia, factories to work weekends to reduce peak demand

uk.reuters.com :

Indonesia will force some manufacturers to shift production to weekends in order to reduce peak demand during the week and stave off an electricity crisis, senior government officials said on Friday. Indonesia suffers from power shortages as demand has steadily risen with little new investment in infrastructure. The capital Jakarta began two weeks of rolling blackouts due to maintenance at the offshore West Java gas field. Disruptions in fuel shipments or for repairs, have led to blackouts in recent months. Unpredictable electricity supplies are a deterrent to new investment, and Japanese firms have threatened to shift production to China unless the government fixes electricity supplies, saying that the power cuts have caused production and financial losses.

- Sooner or later, and probably sooner if this is not fixed quickly, people in Indonesia will start pointing to the bright lights that continue to shine in Singapore while their capital Jakarta is undergoing rolling blackouts. If it's the same gas that powers both countries, and if the gas is coming from their own country, why is Singapore able to keep their lights on, and their own capital city isn't?

I have one or two possible answers to this, but neither is particularly pleasant. One, Indonesia does not have the power generation capacity, while Singapore has too much. Their electricity generation is not keeping up with demand while, being a relatively small and wealthy nation, Singapore has half of its power generating capacity lying around idle (Singapore has over 9000MW of power generation capacity and demand of around 4500MW). Two, despite depleting reserves, they are bound by contract to export their gas to Singapore. Shades of NAFTA, where, despite depleting reserves, Canada is bound to supply natural gas to USA and have said they would certainly export it elsewhere, or perhaps consume it themselves for their oil sands operations, if they were not bound by treaty? It looks a bit like that to me.

Political crises have erupted over much lesser issues. Let's hope, for our own sake, that they are able to solve their current power problems soon and not start to point fingers our way, or it would not be particularly pleasant. But, this being a large-scale infrastructural problem, I do not harbour many illusions about the "soon" part. We will have to watch carefully and see how this turns out.

See also :

1. Indonesia to speed up CNG vehicle conversion, using up more of its natural gas
2. Indonesian firms to build LNG terminal (and why Singapore should go nuclear)
3. Southeast Asian oil output likely to peak by 2013 (and gas output by 2020)
4. Indonesia likely to terminate gas exports

(2008-07-13 23:52:46 SGT) [Energy] Permalink

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