PLN buys palm oil for power generation

By Bernard Loebs

State owned electricity firm PT Perusahaan Listrik Negara (PLN) has signed agreements with three palm oil producers to buy Pure Palm Oil (PPO) as fuel for power generation.

The sales and purchasing agreements was signed at PLN?s headquarters on Monday by PLN and PT Smart Tbk, PT Wilmar Nabati Indonesia and PT Wilmar Cahaya Indonesia.

Smart was represented by Vice President Director Budi Wijana; and Wilmar Nabati and Wilmar Cahaya by Vice President Director Erik Tjia. Also present during the signing ceremony were Sofyan Wanandi, Chairman of the Indonesian Entrepreneurs Association (Apindo) and Mahendra Siregar, Head of the Investment Coordinating Board (BKPM).

PLN said the agreements were aimed at implementing the national program of using renewable energy rather fossil fuel. PLN plans to use renewable energy, including PPO, at its diesel power plants.

PLN agreed to buy a total of 6,700 tons of PPO from the three companies, including 3,320 tons from Smart for PLTD Titi Kuning diesel power plant in Medan, North Sumatra; 1,250 tons from Wilmar Nabati for PLTD Bagan Besar and PLTD Bagan Siapiapi in Dumai and 2,150 tons from Wilmar Cahaya for PLTD Sudirman, PLTD Sambas, PLTD Menyurai Sintang, PLTD Semboja Sanggau in West Kalimantan.

PLN?s President Director Nur Pamudji said PLN first used CPO for power generation in 2007 but later stopped the project since the CPO price rose higher than the price of diesel oil.

He said in the beginning, PLN will use CPO for diesel power plant (PLTD) but later will also use it at gas-fired power plants (PLTG).

Editing by Johannes Simbolon