Indonesia: Government to reduce fuel, gas use for electricity

• Nov 23, 2018

The government is reducing the use of fuel and gas for electricity, a policy that is stipulated in a revision of the Electricity Procurement Plan (RUPTL) from 2019 to 2028, which is being discussed by the Energy and Mineral Resources Ministry and state-owned electricity company PLN.

The policy is part of a wider effort to decrease the price of electricity and make power affordable even for low-income families.

PLN president director Sofyan Basir confirmed that the government had told PLN during the meeting to further evaluate the gas and fuel use for electricity, particularly when discussing the connection between economic growth and the use of energy.

“[The price] should be decreased. That is an order [made by Energy and Mineral Resources Minister Ignasius Jonan],” Sofyan said in Jakarta on Thursday as reported by kontan.co.id.

He expressed his optimism that with the reduction of gas and fuel use, the electricity tariff could be decreased as well.

Based on Ministerial Regulation No. 45/2017 on the utilization of gas for power plants, the gas wellhead price was decided at 8 percent, while the plant gate price decided at 14.5 percent of the Indonesia Crude Price (ICP) per million British thermal units (mmbtu).

“The gas and fuel powered plants would be replaced with hydropower plants and geothermal power plants to minimize costs. The cost of hydropower plants is very low, but its construction process needs time,” Sofyan added. (bbn)

Source: http://www.thejakartapost.com/news/2018/11/23/government-to-reduce-fuel-gas-use-for-electricity.html