Report form 23rd Coaltrans in Denpasar
23rd Coaltrans 2023, Denpasar, Sept 23-26. 2023
At the IBTC AGM in April 2023 the board of IBTC decided to not only promote thermally treated biomass on biomass conferences but to rather spread the information in other sectors. The coal and iron/steel sector in particular had been named.
Coaltrans Asia was named to me as THE one event that attracts everybody in coal in South East Asia. 1136 official participants, the real number of participants seemed to be much higher as the overall Bali International Convention Center, several lobbies and corridors were filled with people discussing business. Appr. 60 companies had official separate meeting rooms. Conference Tickets from $US 2500+.
- Coal producers from Indonesia and Australia
- Shipping – Owners, Builders, Stevedores, Surveyors
- Coal mining contractors and machinery suppliers
- Market Reporters - Argus, McCloskey, Kpler,
- Traders from all over dominated by Chinese and Indian traders.
- Coal consumers from the region
- Indonesian Officials – Ministries
The presentations itself were attended by a fraction of participants, ca 400-450.
A coal conference by nature concentrates on coal topics. However, the first afternoon had programmed a roundtable on Influence of CO2 market and one roundtable on Renewables in Asia (led by me).
Both did attract a number of people but were not really overrun. The CO2 market discussion had a number of participants mostly from the Market Reporters and Officials, not really that many from business. The government of Indonesia launched the day before the start of the conference the Indonesian CO2 certificate market and trading exchange. (see Reuters article link below)
The topic of renewables attracted interestingly mainly people from Pakistan, India and Bangladesh, very few Indonesians.
Generally, the regulation in place in Indonesia seems to be very attractive for renewable investment and business development.
Indonesia's USD 20 billion Just Energy Transition Partnership (JETP) with G20 nations seeks to reduce emissions, accelerate renewables, and transition to net-zero emissions by 2050. However, terms remain unclear, leading to a project standstill.
Similar in Indonesia’s co-firing obligation for the 56 larges coal power plants. Officially 10% cofiring of biomass is required. But as no direct subsidy or support is offered to power plant operators, they cannot pay more for biomass than they pay for coal MJ. The CO2 market will change this a bit, but not upside down as prices of 4-6$US/certificate are expected currently.
https://www.reuters.com/sustainability/sustainable-finance-reporting/indonesia-begins-trading-carbon-dioxide-emissions-credits-2023-09-26/
The De-dieselisation program of PLN – the state utility and monopoly grid operator – is aiming to substitute all of the more than 2000 diesel Generators at smaller islands with renewable based energy systems. 500kW to 5MW max with majority in the 2 MW range.
But interestingly people are talking about solar and wind only (Both at the equator surprisingly low yield). Projects will be launched by official tender processes. To date only one tender has been published aiming at solar-PV only.
Tropical Indonesia has an abundance of biomass, plenty of which is byproducts to existing agro industry, dominated by the Palm oil Industry. Major by-products PKS (already an energy commodity), EFB -empty fruit bunches – a material extremely rich in Silica, Potassium and other ashes with a very low ash melting. 15 years of R&D on reducing this minerals content have yielded numerous patents but to my understanding no larger scale de-ashing plant has been build or is operated.
Other sources from Copra and Casava industries.
Old and originally paper industry oriented pine plantations were never utilized and could form an alternative source of feedstock.
Asking for costs for other feedstock I learn numbers between 20 and 50$US/GMT gate price, wood being at the higher end.
Indonesia is home to an increasing number of pellet plants, mostly from plantation forestry. Almost all volume going to Japan, at least of those pellets of acceptable quality.
Still the dominant renewable energy source that is exported from Indonesia is the Palm Kernel Shell that has reached a commodity like status by now- reported appr. 7mio mt.
Almost all exported. Export price 120-150$US.
This describes also the overall mood at the conference. Renewables are an opportunity to eventually build some trading revenue on the side.
The slide that caused the most reaction was this very sober and not at all cluttered graphic presented at the China´s energy outlook. For a moment I thought I was in a football stadium, so emotional were the reactions.
My presentation on biocarbon – slides to be seen and downloaded from members area – did cause attention and some minor reaction but no real concrete opportunity in Indonesia. But concrete requests from Bangladesh, India, Egypt- Please contact me to learn more if you are interested in any of these.
Discussion on the podium on Indonesia´s energy future brings clear positions: cynicism against renewables in general versus moderate positive opinion on solar, wind and (B)CCUS. Surprisingly the German HMS Bergbau AG is appearing as the strongest opponent of the development into a renewables-based core scenario.
Coal that is consumed by domestic power plants is partially supplied at US$ 36 to consumers which is causing losses to coal producers. My understanding is that there is a certain obligation to cross subsidize local supplies in exchange for export permits on coal. That way the government keeps generation costs under control.
Given this plus the expected CO2 price between 4 and 6 $US per certificate traded at the newly installed Emissions exchange in Jakarta, a supply price of appr 54$US/mt torrefied biomass would be expected. I´d wonder if this attracts any investment for domestic consumption. See also this paper that clearly states: The challenge lies in the economic feasibility.
https://ieefa.org/wp-content/uploads/2021/02/Indonesias-Biomass-Cofiring-Bet_February-2021.pdf
https://www.argusmedia.com/en/news/2472435-indonesias-pln-increases-biomass-cofiring-uptake
Conclusio:
Indonesia, despite of the regulatory framework and the legal obligation for cofiring, is today not a market for torrefaction because of expected low purchase power of power plants (54$US/mt).
Indonesia is clearly a favorable resource base for biomasses to be torrefied, export markets in Japan, South Korea and Europe, eventually New Zealand and Australia.
Indonesia therefore can be categorized as low hanging fruit to secure feedstock and produce biocarbon, but as a consumer it is far from being a low hanging fruit compared to other opportunities – Japan, Australia, New Zealand
As it was a decade ago with the biomass conferences, it takes time and multiple appearances to attract broader recognition, hence, to be continued.