Govt to cut fuel consumption in power generation

By Godang Sitompul

Consumption of petroleum-based fuel by power generation units of state-owned electricity company PLN in 2013 is targeted to further decline to 9.7 percent this year from 13.9 percent last year, according to Director General of Electricity at the Ministry of Energy and Mineral Resources, Djarman.

He said on Wednesday that petroleum-based fuel consumption accounted for about 23 percent of the energy mix in the electricity sector in 2011. The government aims to further reduce the use of costlier petroleum-based fuel in power generation to as low as 1 percent in 2020 in a bid to help cut down production cost.

Djarman said that the government would replace fuel with other cheaper sources of energy such as coal, gas and renewable sources.

He, however, said that because of the increase in the price of gas, the drive to reduce the use of petroleum-based fuel has caused production cost to remain relatively high. Nevertheless, without efforts to reduce fuel consumption, the cost would be much higher, he added.

He pointed out that the price of gas in 2005 was about US$2 per mmbtu, but has now soared to around $7.96 per mmbtu.

Editing by Reiner Simanjuntak