PLN plans 18% cut in fuel consumption by shifting to coal

State electricity firm PT Perusahaan Listrik Negara (PLN) said it aims to cut its annual fuel consumption by 18 percent in line with government efforts to diversify Indonesia's energy mix by tapping cheaper options such as gas and coal amid high world oil prices.

PLN president Eddie Widiono said the plan is in line with a government strategy to encourage investors to finance construction of more coal-fired power plants in lieu of diesel-fired plants.

Widiono said PLN hopes to cut its fuel consumption by 2 million liters a year from the current 11 million consumed annually by its power plants.

He said PLN aims to eventually phase out its small diesel power plants with capacity of under 15 megawatts each, and replace them with coal-fired power plants.

The government is already drafting incentives for investors who would finance construction of such coal-fired plants, he said.

He said investors will have to bring in a combined capacity of 1,200 MW in order for PLN to retire all of its diesel-fired power plants.(*)