State power firm PT Perusahaan Listrik Negara (PLN) announced Monday it could lower its electricity production cost this year by using less oil-based fuels.
“We estimate our production cost (may fall) to between Rp 1,000 (9 US cents) and Rp 1,100 per kilowatt-hour (kWh) this year,” vice president Rudiantara said.
Currently, the average electricity rate stands at Rp 650 per kWh, lower than average electricity production cost which stands at Rp 1,300 per kWh.
In 2007, PLN, the country’s sole distributor of electricity, made a loss of Rp 6 trillion. Rudiantara said earlier PLN was forecast to make a further loss in 2008, with final figures not yet known.
“We can possibly cut production costs this year as we will start operating more coal and gas-fired power plant,” Rudiantara said.
In 2009, PLN plans to produce 121,849 gigawatt hours (GWh) of electricity, 6.5 percent higher that the 114,447 GWh in 2008. Of the total, 67 percent will be generated from coal and gas-fired power plants, up on 58 percent last year.
Fuel conversion from oil to coal and gas made it possible to cut oil-based fuels consumption from 11 million kiloliters in 2008 to 7.9 million this year, president director Fahmi Mochtar said on Jan. 14.
This cut will also reduce the required power subsidy from Rp 88 trillion to an estimated Rp 46 trillion. Rudiantara said however that PLN would have no objection should the government cut electricity tariffs.
“Since it (the policy on electricity rates) is heavily regulated, we will be ready (for the cut),” Rudiantara said.
Analysts say the government’s policy to cut electricity rates would further boost the popularity of President Susilo Bambang Yudhoyono ahead of the upcoming general elections.
Yudhoyono’s Democrat Party has already been seen to promote heavily the recent three-time fuel price cuts through television advertisements.
The latest revision in electricity rates was in 2003, when the government raised the rates by an average of 6 percent.
In 2009, PLN needs Rp 55 to 60 trillion to finance its operations, including completing the financing of the 10,000 megawatt (MW) coal-fired power plant program, scheduled to be finished in 2010.
To complete the projects by 2010, PLN still needs another Rp 17.33 trillion ($1.55 billion) to build power stations and Rp 8.58 trillion for transmission systems.
About 6,800 MW of the program is located in Java and Bali, provided by 10 new power plants.
The remaining 3,200 MW is off the Java-Bali system, based on about 20 smaller power plants
“We estimate our production cost (may fall) to between Rp 1,000 (9 US cents) and Rp 1,100 per kilowatt-hour (kWh) this year,” vice president Rudiantara said.
Currently, the average electricity rate stands at Rp 650 per kWh, lower than average electricity production cost which stands at Rp 1,300 per kWh.
In 2007, PLN, the country’s sole distributor of electricity, made a loss of Rp 6 trillion. Rudiantara said earlier PLN was forecast to make a further loss in 2008, with final figures not yet known.
“We can possibly cut production costs this year as we will start operating more coal and gas-fired power plant,” Rudiantara said.
In 2009, PLN plans to produce 121,849 gigawatt hours (GWh) of electricity, 6.5 percent higher that the 114,447 GWh in 2008. Of the total, 67 percent will be generated from coal and gas-fired power plants, up on 58 percent last year.
Fuel conversion from oil to coal and gas made it possible to cut oil-based fuels consumption from 11 million kiloliters in 2008 to 7.9 million this year, president director Fahmi Mochtar said on Jan. 14.
This cut will also reduce the required power subsidy from Rp 88 trillion to an estimated Rp 46 trillion. Rudiantara said however that PLN would have no objection should the government cut electricity tariffs.
“Since it (the policy on electricity rates) is heavily regulated, we will be ready (for the cut),” Rudiantara said.
Analysts say the government’s policy to cut electricity rates would further boost the popularity of President Susilo Bambang Yudhoyono ahead of the upcoming general elections.
Yudhoyono’s Democrat Party has already been seen to promote heavily the recent three-time fuel price cuts through television advertisements.
The latest revision in electricity rates was in 2003, when the government raised the rates by an average of 6 percent.
In 2009, PLN needs Rp 55 to 60 trillion to finance its operations, including completing the financing of the 10,000 megawatt (MW) coal-fired power plant program, scheduled to be finished in 2010.
To complete the projects by 2010, PLN still needs another Rp 17.33 trillion ($1.55 billion) to build power stations and Rp 8.58 trillion for transmission systems.
About 6,800 MW of the program is located in Java and Bali, provided by 10 new power plants.
The remaining 3,200 MW is off the Java-Bali system, based on about 20 smaller power plants
Source: The Jakarta Post , Jakarta | Tue, 01/20/2009 2:04 PM | Business
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