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Letter: A profitable venture
Tue, 11/11/2008 10:53 AM | Reader's Forum
The government's moves to overcome the global financial crisis that has hit the country deserve a thumbs-up.
As an impact of the crisis, Indonesia's major non-oil export commodities (such as rubber, coffee, crude palm oil, etc) have experienced a sharp fall in prices causing farmers of the commodities to suffer severely.
The government moves last month to issue (among other things) a regulation mandating the use of biofuel in all sectors (such as manufacturing, commercial business, fuel retailers and power plant operators) has prompted state power company PT PLN to start a power plant fueled with CPO.
The plant, whose capacity is 10 megawatts (MW), located in Dumai, Riau Province, has been operated at a commissioning stage and was initially fueled with diesel and has now been converted to use CPO by installing German-made converter equipment.
This means other PLN power plants, as well as manufacturers and commercial businesses using either diesel, coal or fossil fuels, should be made to use CPO or other biofuels so that the country's oil export commodities can increase.
PLN's power plant converter cost around US$2 million and was subsidized by the government. Such a policy may also be applied to manufacturers and commercial businesses for instance, by giving them tax-free imports of the converters.
There is no way we will experience a shortage of CPO supply as one 10 MW power plant only needs 1,500 tons of CPO a year. This country is the largest CPO producer in the world producing roughly 18.4 million tons a year.
The most important thing to note is that CPO is a renewable energy resource, compared to fossil fuels for instance. By using more and more CPO, farmers will enjoy remarkable profits which would improve their welfare, and it will also apply to other biofuel sources such as ethanol, jathropa, etc.
M. RUSDI
Jakarta
