Indonesian power plants start using biofuel to cut costs

Xinhua, December 11, 2006

Indonesia's state-owned power firm Perusahaan Listrik Negara (PLN) will start using biofuel to fire 114 small- and medium-scale power plants around the country beginning next year.

PLN chief commissioner Alhilal Hamdi said the plan had been approved following the success of pilot projects for the use of biofuel in an 11-MW plant in Lampung and a 1.5-MW power plant in Nusa Penida, Bali, earlier this year.

"Next year, we will start using biofuel in West Nusa Tenggara, East Nusa Tenggara and South Kalimantan," Alhilal, who is also the head of the government's biofuel development committee, was quoted Saturday by major newspaper The Jakarta Post as saying.

He said that power generated by this plant, which used a blend made up of 80 percent pure plant oil (PPO) and 20 percent diesel, was 300 rupiah (3 U.S. cents) cheaper per kilowatt per hour than power produced from oil-based fuels.

"We hope we can save more using this alternative energy source, and therefore help reduce the government's subvention," Alhilal said.

According to a review conducted by the State Ministry for Research and Technology's technological assessment and application agency (BPPT), the government could cut the subvention it pays to PLN to 2.56 trillion rupiah (279.8 million dollars) per year with the greater use of PPO, made mainly from palm oil.