The Indonesian public was shocked by the statement of the Coordinating Minister for Maritime Affairs, Luhut Binsar Pandjaitan. In an event at the Police Science College (PTIK), he invited all the people of Indonesia, especially the TNI-Polri, to dare to show that Indonesia is a big country so there is no need for interventions that violate the sovereignty of the NKRI.

Luhut’s statement coincided with the forestry observer’s statement, Professor Yanto Santosa, who called on foreign organizations to stop negative campaigns about forest management and biodiversity in the country because often campaigns that hinder national development are based on false, incomplete and incorrect information.

Prof. Santosa questioned the on going attack on the process of building a renewable energy power plant, the Batang Toru Hydroelectric Power Plant (PLTA) in South Tapanuli Regency, North Sumatra. He rejected the assumption of a number of NGOs (non-government organizations/non-governmental organizations), as well as other foreign parties who stated that the project threatened the existence of orangutans.

“In fact, the location of hydropower development is outside the forest area. Even if there are orangutans that roam close to the project location, the amount is not as much as they claim,” he said.

Prof. Santosa was very surprised, why foreign and local NGOs were so aggressively attacking projects that they would clearly help Indonesia achieve its target of mitigating carbon gas emissions by 2025.

In the latest development, one of the North Sumatra regional Indonesian Forum for the Environment (Walhi), proposed a foreign national (WNA) in a lawsuit against the Governor of North Sumatra at the Medan State Administrative Court (PTUN). Serge Which, a Dutch national, is a lecturer at Liverpool John Moores University, England, and was presented as a witness regarding the existence of orangutans to thwart the Amdal of the Batang Toru Hydroelectric Power Plant, which was issued by the Governor of North Sumatra. Responding to this, the North Sumatra Provincial Government officially filed an objection about the foreigner being a witness at the trial in the Medan Administrative Court.

The conflict that followed the Batang Toru project also attracted public attention. Why are local NGOs so eager to tackle this project? Even though based on an official study, the presence of the Batang Toru Hydroelectric Power Plant provides a large benefit also from the economic side in the form of foreign exchange savings. The existence of the hydropower plant has the potential to save government spending up to US $ 400 million per year because it does not use fossil fuels. PLTA with a capacity of 510 MW is more environmentally friendly because it is a renewable energy generator.

The construction of the Batang Toru Hydroelectric Power Plant absorbs more than 1,800 workers during development and has the potential to create economic multiplier effects, both directly and indirectly, to residents and the formal and informal business sectors around the area.

In this case the Batang Toru Hydroelectric Power Plant has also studied orangutan and other wildlife populations in coordination and guided by the Center for Natural Resources Conservation (BBKSDA) also Research and Development Center of Ministry of Environmental and Forestry. BBKSDA, according to the direction of the Minister of Environmental and Forestry, has even formed a monitoring team to ensure the impact of the development of the Batang Toru Hydroelectric Power Plant on orangutans populations and other wildlife.

Then, what exactly is at issue? It is common that the presence of the Batang Toru Hydroelectric Power Plant has the potential to reduce PLN’s fuel bills. Moreover, so far, PLN still relies on diesel and gas fuel.

Many parties acknowledge that gas prices in North Sumatra are the highest in Indonesia, as once acknowledged by Johan Brien, Deputy Chair of the Indonesian Entrepreneurs Association (Apindo) of North Sumatra who is also Chairman of the Indonesian Gas Users Company Association (Apigas). According to him, gas prices in North Sumatra are still the most expensive in Indonesia even in the world.

On the other hand, the President Joko Widodo has mandated that industrial gas prices be directed to the level of US$ 6 per MMBtu according to Presidential Regulation Number 40 of 2016. “Gas prices for all industrial sectors in North Sumatra are still at the level of US$ 9.95 per MMBtu, still the most expensive in the world,” Brien said to Bisnis on Sunday (7/15/2018).

The gas price policy of US$ 6 per MMBtu has only been enjoyed by three industrial sectors: fertilizer, steel and petrochemicals, especially the state-owned companies. The private sector industry is said to still not get a gas price of US $ 6 per MMBtu.

That’s the price of gas for industry. What is the price of gas for electricity generation? The Minister of Energy and Mineral Resources (ESDM), Ignasius Jonan, once highlighted the high cost of gas distribution in a number of places, one of which occurred in the Belawan Gas Power Plant (PLTG) in North Sumatra and that PLN agreed to.

As expressed by the Director of Procurement of PLN, Supangkat Iwan, to the media, the cost of regasification, transmission and gas distribution for this PLTG reached more than US$ 4 per MMBtu. The gas for the Belawan PLTG comes from Lapangan Tangguh in Papua, after being processed into LNG it costs around US $ 6 per MMBtu. LNG is shipped at a cost of US$ 0.6 per MMBtu. Arriving at the Arun LNG Receipt and Regasification Terminal, LNG is regenerated at a cost of US$ 1.56 per MMBtu.

Then the gas is supplied to the Belawan PLTG through the Arun-Belawan transmission pipeline which imposes a toll fee of US$ 2.53 per MSCF. Total cost of shipping, regasification and transmission has been US$ 4.63 per MMBtu. Gas prices are above US$ 10 per MMBtu once they arrive at Belawan PLTG.

For this reason, Jonan issued a new ESDM Ministerial Regulation (Permen) which limits profit margins from regasification, distribution, and gas sales. PLN fully supports this step for cheap electricity for the people.

As is known, since March 2015 the Belawan PLTG has successfully used gas fuel originating from the Lapangan Tangguh LNG gas, Papua, which was then processed by regasification at the Arun LNG Terminal, then channelled through a gas pipeline for more than 300 km to Belawan. The Arun regasification facility is an attempt by the government to reuse assets. In the past, the facility was used to convert gas to LNG, but since 2015 it has been used to convert LNG into gas.

The use of these gases helps reduce the basic cost of supply (BPP) of the plant from around Rp 2,926 per kWh to Rp 1,255 per kWh. To support efforts to reduce the Sumatra Regional Electricity BPP system even lower, PLN will continue to look for opportunities to make BPP Generating in the Belawan Power Center more efficient.

And the answer is in the operation of the Batang Toru hydropower plant.

Reporter: Gustav Perdana