PLN's plan to convert to gas and coal will take time to realize

State owned electricity company PLN will unlikely be able to meet the government's target to reduce the diesel oil usage in the company's power plants in Java to zero percent in the middle of 2006, Kompas reported on Monday.

PLN's general manager for power distribution and power transmission management Muldjo Adji said in Jakarta on Saturday that the plan to convert to gas and coal would be carried step by step.

"We will likely be able only to reduce the diesel oil usage by 50 percent next year," he said.

Chief Economic Minister Aburizal Bakrie said recently that PLN had been given a target to reduce the diesel oil usage to zero percent in the middle of next year in a bid to reduce the high operating costs resulting from the increase in the fuel price.

As part of the fuel conversion program, PLN has been asked to modify all its diesel oil power plants so that these power plants could use gas and coal. However, Muljo Adjie said that the program could not be carried as planned due to the lack of the gas supplis.

The use of gas or coal is expected to be able to reduce operating costs by 30 percent. This year, the use of diesel oil and marine oil fuel (MOF) by PLN is expected to reach 6.54 million kiloliters and 2 million kiloliters, respectively. In 2006, PLN has targeted to reduce the use of diesel oil and MOF to 3 million kiloliters and 790,000 kiloliters in 2006.

The use of oil fuel could be reduced to 10 percent in 2008, on the condition that the South Sumatra gas pipeline which is now under construction could provide enough gas supply for the existing power plants, he added. (*)