Question: What’s in store for next year in terms of performance?

Answer: There are several milestones that you can see in 2012. The first is for the first time, we are going to utilize liquefied natural gas (LNG) in our electricity system with the operation of a floating storage and re-gasification unit (FSRU) in Jakarta Bay. The LNG will come from the Bontang LNG plant in East Kalimantan. The gas will then be channeled to the Muara Karang and Tanjung Priok power plants in North Jakarta. This is a historic achievement for PLN.

The second milestone is almost all power plants included into the first phase of the 10,000 megawatts fast-track program in Java will begin operating. Only two power plants, Tanjung Awar-awar and Adipala, will not start generating electricity next year, the rest will be ready to operate. Outside Java, several power plants will also start operation, such as in Kendari in Southeast Sulawesi, Amurang in North Sulawesi, Tarahan in Lampung and Lombok in West Nusa Tenggara. The result of the first fast track program can be enjoyed next year.

The third milestone is that we aim to boost the number of pre-paid electricity to 5 million.

With the utilization of LNG, by how much can PLN reduce the consumption of oil-based fuels?

We hope that we can press down the consumption of oil-based fuels from 24 percent of our total energy mix this year to only 14 percent next year. With the completion of new coal-fired power plants, the portion of coal in our energy mix will jump to around 51 percent, gas 22 percent, geothermal 7 percent and hydro 6 percent.

Less consumption of expensive oil-based fuels will allow us to cut the electricity production cost by around Rp 50 per kilowatt-hour (kWh) from Rp 1,100/kWh currently.

What’s the outlook for PLN’s coal consumption next year?

The government has set the domestic market obligation ruling, in which PLN and independent power producers will get 57.5 million tons. Moreover, the government has also imposed a regulation on the coal price so that the supply is secured.

Years ago, some of PLN’s coal suppliers were only brokers, how about now?

We solved that problem last year. We have cut contracts with suppliers which failed to deliver coal as promised. We have informed our suppliers that they have to have their own mining areas or we will terminate their contract. We no longer allow traders to become our suppliers.

Next year, we will also get more coal from coal contract of work (locally known as PKP2B) holders. Previously, we only received supply from Arutmin, but in 2012, we’ll also get low-rank coal from Kideco Jaya Agung and additional supply from Kaltim Prima Coal (KPC). The total coal contract that we currently have is even higher than our need.

To secure coal supply, will PLN continue the plan to have its own mining concession?

We have a subsidiary called PLN Batubara. The acquisition will be conducted by that company. It will be responsible for coal procurement for PLN.

How about the progress of the plan to build a mini LNG terminal?

The terminals are mostly for big cities in the eastern part of the country like Ambon in Maluku, Makassar in South Sumawesi and mining centers like Halmahera in North Maluku. The first terminal will be installed in Bali and begin operating in 2013.

The gas will only be used in times of peak burden; at other times we will use other energy sources like coal.

Is there any political intervention in PLN’s projects?

Not at all. We are very transparent in running our projects. We announce all processes in the media. People can follow the process.

Does PLN have a special mechanism to prevent corruption?

We have the electronic procurement (e-procurement) system which is directly linked to the Corruption Eradication Commission (KPK). Our financial report has also been computerized and linked with the Supreme Audit Agency (BPK).

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