PLN plans to use less oil in power plants by 2006

The Jakarta Post, Jakarta

State-owned power firm PT PLN says it plans to reduce the use of oil-based fuel in its power plants to less than 5 percent by 2006, the date when a series of natural gas transmission projects and coal-fired power plants are due to come online.

Ali Herman Ibrahim, PLN's director of power plants and primary energy, said that by using more natural gas, the company could cut down the budget needed to buy oil-based fuel by between 20 and 30 percent by 2006.

"The current budget for oil-fuel based is still high. In 2006, Tanjung Jati B will be completed and natural gas and coal will become the dominant energy supply for power plants," Ali said on Monday.

He was referring to the 1,300 Megawatt coal-fired Tanjung Jati B power plant in Semarang, Central Java that is under construction and due to be completed in 2006.

In the same year, state-owned natural gas distribution and transmission company PT PGN would complete the 1,650 kilometer natural gas transmission pipelines from Grissik to Pagardewa in South Sumatra to PLN's Muara Tawar and Muara Karang power plants in West Java.

The pipelines are expected to transport some 600 million cubic feet of gas a day when they begin, increasing transmission up to 900 million cubic feet a day by 2009.

Ali Herman said spending on oil, coal and natural gas to fire PLN's power plants was projected to increase by 7 percent this year.

The company would spend Rp 3.4 trillion on natural gas and coal, and Rp 14 trillion on oil. Last year, PLN spent Rp 12 trillion to buy oil.

Critics of the company have said it should be able to provide cheaper electricity if it uses more gas than oil.

PLN spends Rp 510 (about US6c) producing one kilowatt-hour of electricity using oil, while the cost is only Rp 200 if it uses natural gas.