This document discusses a study of fuel diversification options for diesel power plants in East Kalimantan, Indonesia. Currently the plants use high-speed diesel (HSD) fuel, but rising fuel costs motivate exploring alternatives like heavy fuel oil (HFO), natural gas, and a dual-fuel system using both HSD and natural gas. The study evaluates the performance, costs and viability of converting two existing plants - one to use HFO and one to use the dual-fuel system. Results found that while HFO conversion has lower capital costs, the dual-fuel system provides significantly lower operating costs due to cheaper natural gas. The study concludes that fuel diversification can reduce overall electricity generation costs in the region.

1. A Study of Fuel Diversification for Diesel Power Plants in East
Kalimantan
Heri Priambodo1
, Razali Jidin2
1
Perusahaan Listrik Negara (PLN), Indonesia, heripriambodo@yahoo.com
2
College of Engineering, Universiti Tenaga Nasional, Jln Kajang-Puchong,
43009, Kajang, Malaysia, razali@uniten.edu.my
Abstract
This paper presents a fuel diversification study for
the existing diesel generating plants in East
Kalimantan with the objective to improve electricity
production cost. However, fuel diversification entails
capital cost, as the current generating machines have
to be adapted to accommodate multiple fuels as
combustion inputs. This paper evaluates the viability
of fuel diversification in terms of plant performance,
operational cost and capital cost, using two modified
plants that are currently in operation as references.
Fuels such as heavy fuel oil (HFO), high-speed diesel
(HSD) and natural gas are options being considered
to reduce the production cost and environment
emission, as these fuels are readily available in East
Kalimantan. This study concludes that fuel
diversification is a viable option to reduce the overall
electricity generation cost in East Kalimantan.
Introduction
The electricity generating authority in
Kalimantan Timur, PT Perusahaan Listrik
Negara (PT PLN) currently owns twenty-seven
diesel generators. These diesel-generating sets
consume high-speed diesel (HSD) as a fuel to
generate a total capacity of 141 MW. Since
1980, the oil price has increased steadily, and
recently the price a barrel of oil skyrocketed to
USD 80. It is envisaged that the price of fuel is
expected to increase further, considering the
increasing demand of fuel due to the economic
growth of China and India, as well as remote
chances of finding new oil reserves.
The sharp and steady increase of petroleum price
since year 2000 has caused higher fossil-based
electricity production cost in Indonesia. As
depicted in Table 1, HSD fuel price has risen
from IDR 593.35 per litre in 2001 to IDR 6100
per litre in 2006, almost 1200% appreciation.
Moreover, the 2005’s fuel price almost doubled
that of the year 2004’s, although fuel
consumption remained unchanged. To avoid
losses, one of several options taken by the PT
PLN was to diversify fuel consumed at power
stations. However, fuel diversification requires
modifications to the engine that would have to be
made to accommodate characteristics of different
fuels. The required modifications are to ensure
that the engines can run smoothly when
consuming different fuels as well as allowing
“while-on-operation” mode switching between
fuels in the case of dual mixed mode.
Year HSD Price IDR Fuel/kWh
2001 878,52 234,71
2002 1.406,79 378,54
2003 1.740,91 468,05
2004 1.829,11 485,57
2005* 3.078,56 816,99
2005** 6.100,00 1.619,86
* = Average fuel price Jan-Sep 2005
** = Non Subsidy HSD Price
Table 1: Fuel cost IDR per kWh [8]
Data collected from the two existing diesel
power plants that had been successfully
converted either to consume Heavy Fuel Oil
(HFO) or combined diesel and natural gas (dual-
fuel) will be presented. The first plant is Diesel
Power Plant in Lampung, located in Tagineneng,
and the other one is Gunung Belah Diesel Power
Plant, in Tarakan. The data can be used as
references for fuel diversification for the rest of
plants owned by the PT PLN in East Kalimantan.

2. This paper is organized into five sections
including the introduction. Next section will
describe diesel power plant (DPP) modification
to enable it to burn HFO. Then, the third section
will describe the conversion of DPP to consume
dual fuels. Fourth section will discuss the result
obtained from two modified diesel plants and
performance analysis. The final section will
conclude the study.
DPP Conversion to Consume HFO
The heavy fuel oil engine is similar to the typical
diesel generator. The difference between them is
only their fuel system. As HFO viscosity is
thicker than HSD, it has to be heated to meet the
engine, fuel pump, atomization and other
components specifications. The required heat can
be obtained either from the internal or external
sources. As for the internal heat source system,
the heat comes from the exhaust gas, which has
temperature of around 450 °C. The exhaust gas
is used to produce steam in a heat recovery
boiler. The steam then heats HFO to a certain
temperature such its viscosity meets the
requirement closer to the viscosity of HSD. Such
a system is currently employed at Tagineneng
DPP. The advantage of this system is that it does
not need extra fuel to produce steam but depends
on the presence of a common boiler. If the
common boiler is not in operation, then DPP
units will not able to operate unless every engine
has its own individual boiler in its exhaust stack.
If such individual boiler scheme is to be adopted,
high capital cost will be needed.
Instead of obtaining heat source from exhaust
gas, the external system utilizes external heating
sources such as burners to produce heat in a
boiler. The boiler is usually compact, yet able to
generate sufficient atomizing steam to heat-up
the HFO fuel. This system has advantage over
the exhaust gas system, as it does not affect unit
operation, though it does require additional fuels
to generate the required steam.
As HFO is typically contained Sulphur, this
element reacts with sodium at high temperature
combustion to cause high temperature corrosion
attacks. Thus, this fuel will make the life of the
equipment shorter. Advanced engine has been
equipped with DeSOx system to reduce SOx in
exhaust emission and high temperature attack.
Chart 1 illustrates the optimum temperature of
HFO after being heated. The effective heating
temperature for HFO is around 100°C or at a
viscosity of 8 cSt.
The three diesel engines that were modified to
burn HFO have a total current capacity of 9400
kW x 3 units. The modification includes:
- Exhaust gas boiler/steam generator
- Additional settling, daily and sludge tank
- Steam piping system
- Water treatment unit
- Separator unit
- Conditioning HFO module
- Engine modification
Character of HFO to Diesel Performance
0
2
4
6
8
10
12
90 94 97 100 103 105
Temperature °C
Viscocity,Load
0.210
0.220
0.230
0.240
0.250
0.260
0.270
SFC
Viscosity cSt Load MW SFC lt/kWh Poly. (SFC lt/kWh)
Chart 1: HFO Temperature versus Heat Rate
The disadvantages of DPP that consume HFO as
fuel are:
- Lifetime of the parts of engines will be
reduced as reported in table below.
- Maintenance routine work will also be more
frequent, for example cleaning the turbo charger,
which is normally done once in a week, has to be
increased to three times a week. This is due to
the viscosity of MDO that is less thick than
HFO, resulting in a reduction in wear and tear of
the component. Other components that need
more frequent services include pistons, fuel
separator, fuel and exhaust valves.
DPP Conversion to Dual Fuel
In converting a diesel engine into a dual fuel
engine, there are two types of system are
available at present: the first system is low-
pressure injection and the second is high-
pressure injection.
When the engine is running on the natural gas,
the gas fuel is supplied at low pressure, which is
between 100 - 200 PSI, and the engine operates
on the lean-burn Otto process. Gas is admitted
into the air inlet channels of the individual
cylinders during the intake stroke to give a lean,
premixed air-gas mixture in the engine

3. combustion chambers as depicted in Figure 1.
Reliable ignition is obtained by injecting a small
quantity of diesel oil directly into the engine
combustion chambers. This acts as pilot fuel,
which ignites by compression ignition as in a
conventional diesel engine. This "micro-pilot"
injection uses less than twenty per cent of the
fuel energy required at nominal load. Electronic
control closely regulates the "micro-pilot"
injection system and air-fuel ratio to keep each
cylinder at its correct operating condition
between the knock and misfiring limits.
Figure 1: Low Pressure Dual Fuel [14]
There are two types of low-pressure system. The
first type is where the gas injected directly into
combustion chamber and the piston is near the
bottom of its travel (ECI, 2002). The second type
is where the gas admitted when piston is
traveling downward or suction process. At that
moment the pressure within the chamber is near
ambient. Therefore the gas pressure requirement
is low (100-200 PSI). The gas valve is located
sharp before the intake valve.
High pressure occurs when the gas is admitted
under high (3000+psig) pressure, when the air
has already been compressed and the piston is
near the top of its stroke as illustrated in Figure
2. Air compressed can be closed to 2500 psig,
depending on the characteristic of the engine.
That is explained why it requires the gas to be at
high pressure to be admitted well inside the
combustion chamber. In the diesel operating-
mode, the engines run on liquid fuel oil such as
heavy fuel oil or light fuel oil as a conventional
diesel engine.
Figure 2: High Pressure Dual Fuel [14]
The engines are fully capable of switching over
from gas to back-up liquid fuel instantly and
automatically should the gas supply be
interrupted or in the event of any other alarms,
while continuing delivering full power. When
the situation returns to normal, it is then possible
to switch back to the gas mode. The engines
converted to dual fuel were the four units of
MAK 8M453 with a capacity 2544 kW each.
Results
The fuel consumptions for both plants before the
modification are given in the Table 2. The
specific fuel consumption of Tagineneng DPP is
0.255 kL/kWh. The heat rate was 2207.24
kCal/kWh with efficiency of about 38.98%.
Since the fuel price was IDR 6100, to generate 1
kWh would incur cost of IDR 1555.5.
As seen in Table 3 below, after the DPP was
converted to fire HFO fuel, the consumption was
reduced to 0.24 kL/kWh. The new heat rate was
2323.2 kCal/kWh with efficiency of about
37.04%. The efficiency was reduced to
approximately 0.20%, due to poor quality of
atomisation. Therefore unburned carbon would
be emitted into the atmosphere.
As the price of HFO was only 63.11% of that of
HSD, the cost to generate is reduced as well.
After operating with HFO the fuel cost was only
IDR 924 per kWh. With the HSD, the fuel cost is
reduces to 59.4%.
Condition
Before
Modification
Tagineneng
DPP
Gunung
Belah DPP
Specific Fuel
Consumption
(HSD)
0.255
L/kWh
0.265 L/kWh
Fuel Price
(HSD)
IDR 6100 IDR 6100
Fuel Cost
(HSD) per
kWh
IDR 1555.5 IDR 1616.5
Table 2: Conditions before Fuel Modification [8]

4. Lubrication oil consumption was not affected, as
only the type of lubricating oil had to be changed
to anticipate higher sulphur content in HFO fuel.
TBN (total based number) had to be increased.
Consequently the cost would be higher.
After
Modification
DPP with Fuel
Conversion to
HFO
DPP with
Fuel
Conversion
to Dual Fuel
Fuel
Consumed:
HFO 0.24 L/kWh
HSD
33.586
cc/kWh
Natural Gas
5210.8
Btu/kWh
Heat Rate
2323.2
kCal/kWh
1603.82
kCal/kWh
Efficiency 37.04 % 53.65 %
Lube
Consumed
1.7 cc/kWh 0.68 cc/kWh
OAF 92.43% 94.16%
Fuel Prices:
HFO IDR 3850/L
HSD IDR 6100/L
Natural Gas
USD
3/MMBtu
Fuel Cost IDR 924 IDR 345.48
Table 3: Conditions after Fuel Modification [8]
TBN 14 could be used for HSD. However, since
the Sulphur content was more then 1%, then the
TBN requirement had to be shifted to higher
number such as twenty. This is to neutralise the
acid produced by combustion of HFO. As such,
the corrosion in the engine can be reduced.
Heat Rate and Efficiency Comparison
0
500
1000
1500
2000
2500
Operating Mode
HeatRate(kCal/kWh)
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Efficiency(%)
Heat Rate
Efficiency
Heat Rate 2207.24 2323.2 1603.82
Efficiency 38.98% 37.04% 53.65%
Diesel Oil HFO Dual Fuel
Chart 2: Heat Rate and Efficiency
After the modification, the fuel consumed was only
33.586 cc of HSD to generate 1 kWh or only 12.67%
of previous consumption. The rest of the energy or
87.33% was shifted by natural gas as much as 5.21
MBtu/kWh. Thus the production cost calculated will
be based on the new composition of the fuel.
Assumed that the HSD price IDR 6100 per litre, gas
price USD 3 per MMBtu (million Btu) and exchange
rate USD 1 is equal to IDR 9000, and then total fuel
cost will be IDR 345.48 (HSD cost = 12.67% of
1616.5 = IDR 204.81 + Natural Gas cost = 5.21 x
3/1000 x 9000 = IDR 140.67). This is only 21.37% of
previous price, saving fuel by 78.63% per kWh
FUEL AND CONVERSION COST
0
200
400
600
800
1000
1200
1400
1600
1800
Operating Mode
Cost(IDR)
0
200
400
600
800
1000
1200
1400
1600
1800
Conversion Cost 25.51 39.81
Fuel Cost 1616.5 924 345.48
Total cost 1616.5 949.51 385.29
HSD HFO Dual Fuel
Chart 3: Conversion and Fuel Costs
Chart 3 shows that conversion cost per one kWh
production is IDR 25.51 and IDR 39.81 for HFO
and dual fuel mode of operation respectively.
Although the conversion cost for HFO mode is
cheaper, its fuel cost is too high while in
operation. Whilst the dual fuel conversion incurs
more capital cost, it operation cost is relatively
low. Ross et al stated that for industrial
equipment, the depreciation is seven years, and
also the calculation made the following
assumptions: (Dual Fuel modification cost for 4
x 2500 kW: IDR 10.7 billion, Dual Fuel Engine
averagely generate annually: 9,600 MWh, HFO
modification cost for 3 x 9400 kW: IDR 20
billion, HFO engine averagely produce: 112,000
MWh).
Analysis and Conclusion
Chart 4 depicts the trends of HSD and HFO
(residual oil); with HSD have a steeper slope that
to indicate its higher prices trend. In January
1996 their price difference is USD 13.209 per
gallon while in March 2006 the difference is
USD 57.444 per gallon. Thus consuming HFO
will be more economical than that of HSD.

5. Chart 5 shows the slope of crude oil trend
steeper than natural gas slope. In January 1996,
their price difference was USD 15.8, while in
March 2006 the difference was USD 55.54. The
other factors affected the oil price is foreign
exchange rate of Indonesia.
HFO and Diesel Price Trend
0
50
100
150
200
250
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Date
PriceUSCentperBarrel
No 2 Diesel New York Harbour FOB
Residual New York Harbour FOB
Chart 4: Price Trends of HFO and Diesel [17]
Also, if the oil subsidy that currently given by
the government is removed, then its price will
follow the international market price and in USD
currency, inevitably will incur higher electricity
production costs.
TREND OF CRUDE OIL AND GAS PRICE
0
10
20
30
40
50
60
70
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
MONTH
USD/(Barrel,MMBTu)
NG Well Head Crude Oil Brent
Chart 5: Price Trends of Crude Oil and Gas [17]
On the availability of natural gas for fuel, East
Kalimantan has an abundant of this natural
resource. Currently, it has a proven reserve of
47.35 TCF. The production trend of the natural
gas is increasing and about 1648 BSCF at
present. The gas was mostly consumed by
Bontang Liquefaction Natural Gas (LNG) Plant
that to be exported. The consumption of a whole
diesel power plant is predicted to be less than 10
BSCF a year, or less than 1% of total East
Kalimantan current natural gas production. The
gas supply is currently delivered via a pipeline
network from the wells to consumers.
As discussed in the previous section, operating
diesel engine using HFO only reduces fuel cost
to 67% of HSD cost, but this does not provide
sufficient financial margin. However adopting
dual fuel policy will improve overall fuel cost
and environment emissions though initial capital
cost is comparatively higher. Operating these
diesel generators with dual fuel will reduce
overall fuel cost to 21% and will lengthen the life
of existing engine components. Based on the
data provided above, this is the best option at the
moment with ability to reduce government
subsidy burden.
Acknowledgment
The authors wish to thank to Pak Arifinsyah,
(General Manager), Pak Buntaran, (Human
Resources Manager) and Pak M Ali (Manager
Sektor Mahakam, of PT PLN Kalimantan
Timur). The authors also wish to thank to PT
PLN (Persero) for the data in this paper
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