Indonesia: Sarulla project reaches new PPA

North Sumatra, Indonesia (source: Flickr/martin_canon500d, creative commons)
Alexander Richter Alexander Richter 8 Apr 2010

Indonesia's state electricity firm a new PPA for the $800 million geothermal power plant due to be built in North Sumatra province, a JV by Medco Energi, Ormat Technologies and Itochu Corp..

In news from Indonesia, the country´s “state electricity firm PT Perusahaan Listrik Negara (PLN) said on Thursday it has reached a new deal to buy power from an $800 million geothermal power plant due to be built in North Sumatra province.

A price dispute has held up progress on the 330-megawatt Sarulla geothermal power plant which was awarded in a contract in 2006 to a consortium of local firm Medco Energi International , Ormat Technologies and Itochu Corp..

The consortium had asked PLN for a new deal due to higher costs of building the plant.
“PLN has offered the geothermal electricity a price of 6.79 cents per kilowatt hour and they accepted it,” PLN’s president director Dahlan Iskan told reporters.
PLN had previously agreed to pay 4.64 U.S. cents per kilowatt hour for electricity from the plant.

Indonesia is trying to tap alternative sources of energy to meet rising power demand and cut consumption of expensive crude oil as its own reserves dwindle.

The vast archipelago, with hundreds of active and extinct volcanoes, has the potential to produce an estimated 27,000 MW of electricity from geothermal sources.

However, that potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.”

Source: interactive investor (Reuters)