Semen Indonesia starts Tuban WHR plant construction

Semen Indonesia has commenced the construction of a 30.6MW power plant at its Tuban cement works to reduce the company’s electricity costs.

Using heat from the cement production process, the waste heat recovery plant represents an investment of IDR638bn (US53m). The project is expected to be completed in 26 months’ time with the plant due to come online in 2H16.

In 2013 Semen Indonesia signed a memorandum of understanding (MoU) with Japan-based JFE Engineering Corporation for the WHRS construction.

“This will be the first project in Indonesia where waste heat in the whole area is use to supply the power plant,” Semen Indonesia president director, Dwi Soetjipto, said in a written statement.

The WHR plant will enable Semen Indonesia to generate about a third of the cement producer’s needs at Tuban and effectively save IDR120bn in power costs annually. The Tuban complex requires currently some 140MW of power, currently provided by state-owned electricity company PT PLN.

On 1 May, Indonesia’s government raised electricity prices by 38.9 or 64.7 per cent, depending on the businesses’ power consumption. The rise will be phased in gradually every other month until the end of the year. Hence, power costs exert considerable pressure on the cement producer’s net profits as it faces a 64.7 per cent increase in power prices. In 2013, Semen Indonesia saw its power costs rise by 30.1 per cent YoY to IDR1.88tn, or nearly 40 per cent of its total costs.