PLN to stick with coal in 35,000 MW projects despite oil drop

State-owned electricity company PT Perusahaan Listrik Negara (PLN) said it would stick with coal and renewables as sources of energy in the development of the planned 35,000 MW power projects despite the current drop in oil price, Kontan reported on Monday.

?Based on our calculation, coal is still cheaper,? PLN President Director Sofyan Basir told the paper.

He added that the company can?t easily alter the government?s plan regarding the 35,000 MW power projects. Under the plan, about 50 percent of the planned power projects will use coal as source of energy, 25 percent based on renewable sources of energy, and another 25 percent to use gas.

He added that although renewables are more expensive than petroleum fuel, PLN must stick with the government?s plan to meet the country?s energy mix target.

Meanwhile, Head of Fuel and Gas Procurement division at PLN, Chairani Rachmatullah acknowledged that it is difficult for PLN to alter the source of energy in planned power plant projects, but it may alter the source of energy in existing power plants into diesel fuel only if the domestic price of the latter falls below Rp 3,000 per liter.

He said that at current price level, use of diesel fuel remains uneconomical particularly as maintenance cost of diesel-fired power plant is higher than gas-fired power plant. (*)