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JAKARTA - SUDDEN blackouts on two key Indonesian islands last week may be just the start of a power crisis that could stymie economic growth, curtail resource exports and trigger social unrest.
Analysts are warning of a crisis ahead after outages on the main commercial islands of Java and Bali, the country's worst since a day-long blackout brought Jakarta to a halt in August 2005.
In last week's blackouts, ships carrying coal from Kalimantan were unable to reach port and unload their cargo due to stormy weather, forcing two major power plants to cut production as their coal stocks could last for only another two to three days.
'The situation in Indonesia is worse than anywhere else in Asia,' said Mr Joseph Jacobelli, head of Asia-Pacific utilities research at Merrill Lynch.
Jakarta has managed to stave off the kind of supply crises seen in China and India in recent years, but as growth has picked up since the 1997-98 financial crisis, plants built in the previous decade are showing their age and straining to meet demand.
State electricity firm PT Perusahaan Listrik Negara (PLN) staged planned power cuts in Jakarta's commercial and residential areas last weekend in order to save precious supplies.
Critics blamed the crisis on poor planning and said PLN should have been better prepared, with larger stockpiles.
The firm may now require plants to double stocks to 30 days.
But even with sufficient fuel supplies, Indonesia is already struggling to meet peak-period demand, officials say. The situation is set to worsen until new plants are built by 2010 - provided the government can overcome a legacy of investor resistance.
'Indonesia will inevitably face more power shortages. The political will to tackle the problem is there, but efforts are too few and too late,' said Citigroup economist Anton Gunawan.
Indonesia expects to burn 60-65 million tonnes of coal a year by 2010, up from 29 million tonnes now.
But some in the industry are already bracing themselves for export curbs like those China imposed in January when a shortage of domestic coal caused widespread blackouts in the midst of its worst winter in 50 years.
'We are calculating whether we should have one month of coal stocks or 1-1/2 months or two months in future for our coal-fired power plants,' said PLN spokesman Mulyo Adji.
'We have to calculate the economic risk too, because having too much stock means we have to invest in storage.'
For Indonesia's main coal and gas producers, such as top coal miner PT Bumi Resources, that could mean being forced to cut back higher-priced exports for cheaper domestic sales.
REUTERS
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