S

tate power company PT Perusahaan Listrik Negara (PLN) is touting a plan to limit the proportion of diesel fuel in its energy mix to 1 percent by 2015.

PLN’s oil-based fuel and gas division chief, Suryadi Mardjoeki, said on Tuesday that the company’s energy mix used to produce electricity would comprise coal at 64 percent, gas at 23 percent, liquefied natural gas (LNG) at 10 percent, renewable energy at 2 percent and diesel at 1 percent by 2015.

The reduction of diesel fuel in the energy mix would be gradual, from 5 percent in 2013 to 3 percent in 2014, Suryadi said.

“In 2012, the percentage of oil-based fuel dropped to 17.5 percent, equivalent to 8.9 million kiloliters,” Suryadi told reporters at a press conference at PLN’s headquarters in Jakarta.

Diesel contributed 21 percent to the company’s total energy mix in 2011.

However, Pri Agung Rakhmanto, the executive director of the ReforMiner Institute, a think tank on the energy sector, said that PLN had an extremely poor track record in keeping promises.

While PLN has repeatedly talked about reducing the use of oil-based fuel in its energy mix, the firm “never realized its commitments,” Pri said.

The firm had previously shifted to other energy sources to reduce its diesel consumption, with problematic results, he said.

“To raise gas consumption, the company will have to depend on the availability of supporting infrastructure, which is mostly beyond its control. This is evident in the Muara Tawar power plant project. PLN wants to get gas, however there is no gas pipeline for distribution,” he said.

Pri said that the best-laid plans of PLN often failed to consider market realities.

The firm’s poor performance in energy efficiency was highlighted by lawmakers during the revision process of the 2012 state budget.

Due to a failure to secure gas supplies and soaring global crude oil prices, PLN requested that its electricity subsidies for the year be raised by more than 100 percent, from Rp 40.45 trillion (US$4.32 billion) to
Rp 93 trillion.

The House of Representatives approved an increase to Rp 64.9 trillion, demanding that PLN implement painful efficiency measures, if needed.

PLN’s production costs have been set an average of Rp 1,100 per kilowatt-hour (kWh), while the average electricity rate it charges is Rp 729, which means the cost to generate electricity from diesel is 36 US cents per kWh.

Suryadi said gas supplies for PLN would improve significantly next year when the Tangguh LNG plan in Papua began deliveries.

“We are also preparing small vessels which can carry LNG in smaller volumes, approximately the 5,000 ton to 10,000 ton size,” he said.

He added that PLN would need 2 billion standard cubic feet per day (mmscfd) by 2015 to reduce its oil-based fuel use according to plan.

“The current gas supply is 800 mmscfd,” he said.

He acknowledged, however, that the Muara Tawar plant was still struggling to get additional gas supplies and that no resolution had been found.

Recently, the Energy and Mineral Resources (ESDM) Ministry announced that the gas allocation for Muara Tawar from the Gajah Baru field in the Natuna Sea had been reallocated to state steel maker PT Krakatau Steel.

Deputy Energy and Mineral Resources Minister Rudi Rubiandini said that the plant could not absorb the 40 million mmscfd allocation due to instability in demand at the power plant.