State-owned power firm PT PLN may fail to reduce its oil-based fuel consumption due to soaring electricity demand and delays in the operation of three of its coal-fired power plants prepared under a fast-tracked program.
PLN initially expected to reduce its oil-based fuels consumption from 9.44 million kiloliters in 2009 to 6.3 million kiloliters this year. But, based on the consumption realization in the first semester, the full year's consumption will likely exceed the target volume.
"The consumption in the first half of the year reached 4.7 million kilo liters, which was more than our targeted volume of 3.4 million kiloliters. We estimate consumption for the entire year to be as much as 9 million kiloliters," PLN's primary energy director Nur Pamudji told reporters Thursday.
Of the total 4.7 million kiloliters of oil-based fuels burnt by the company in the first semester, almost 75 percent is high speed diesel (HSD) and the remaining 1.2 million kiloliters is marine fuel oil (MFO).
In the company's initial plan, the oil-based fuels were expected to contribute no more than 16 percent of the company's total energy mix in the first semester, but the actual contribution reached 21 percent.
Nur Pamudji said the increase in the oil-based fuel consumption rate was caused by bullish electricity demands that have forced the company to burn more oil.
He said PLN initially aimed to produce as much as 81 million terrawatt-hours (TWh) in the first half of 2010. Due to strong demand, however, the company had to boost the production to produce 83.3 TWh.
"*83.3 TWh* is 11 percent more than the production in the first half of 2009. The 11 percent increase is extraordinary. We have never experienced growth as fast as this. Initially, we only expected the growth to be 7 percent," said Nur Pamudji, adding the increase was likelyrelated to the country's strong economic growth.
The high oil-based fuel consumption rate at PLN power plants was also caused by the operation delay of three power plants prepared under the 10,000 megawatt (MW) fast-track program. The power plants are the 2x300 Rembang power plants; the 1x600 Suralaya power plants and the 2x300 Indramayu power plants. All of the power plants are located in West Java.
"These power plants were initially scheduled to start operating in the first half of this year, but we have to push that target back to later this year. The high consumption of oil-based fuels was also caused by this delay," Nur Pamudji said.
The delay has lead to a coal consumption rate lower than the initial estimates. In the first half of 2010, PLN consumed as much as 11.8 million tons of coal, lower than thetarget 13.9 million tons. By the endof this year, Nur Pamudji said coal consumption would reach 26 million tons, which is less than theinitial full year projection of 29.8 million tons.
Nur Pamudji said PLN would open another coal procurement tender this month. PLN is currently is also selecting suppliers for 1.25kiloliters of HSD to be used to fire the company's six power plants for five years.
"We expect to complete the due diligence process by Aug. 18," Nur Pamudji said
