Mitsubishi Corp. buys 20 percent stake in Wayang Windu project
In its drive to expand its renewable energy business, Japanese Mitsubishi Corp. is acquiring a 20% stake in Star Energy Geothermal, a holding company managing the operation of Wayang Windu plant and its expansion project in Indonesia.
Announced yesterday, Japanese “Mitsubishi Corporation (“MC”) has agreed to acquire 20% shares of Star Energy Geothermal Pte Ltd. (“SEGPL”). SEGPL is a holding company that manages operation of the Wayang Windu Geothermal Power Project Plant (“Wayang Windu”), a geothermal power plant stably operating since June, 2000 in Java Island of Indonesia.
Wayang Windu, which owns approximately 13,000 hectares of contract area, is known as one of the world’s largest geothermal resources with a potential gross capacity of 420MW. Located in the midst of a vast expanse of a tea plantation, it is also known to be one of the world’s most environmentally friendly and beautiful geothermal plants.
This acquisition marks MC’s first entry into the Indonesian power industry and its first operation of a geothermal power plant. Through SEGPL, MC is aiming to develop and operate multiple geothermal power plants in Indonesia, including the expansion of Wayang Windu.
Driven by domestic demand, Indonesia has maintained a high rate of economic growth, and Java Island, where Indonesia’s population and industry is concentrated, is expected to see a 7 to 8 percent annual growth in demand for electricity in the coming years. Accordingly, Indonesia has declared the development of new sources of power as a national priority, and is aiming to make use of its estimated 29,000 MW of world class geothermal reserves. The country plans to focus on developing geothermal power which is notable for its high operating rate compared to other sources of renewable energy as well as for its environmental friendliness. According to this plan, new geothermal power plants with a total capacity of around 6,000 MW will be developed by 2020.
Within this context, MC intends to take full advantage of the experience it has accumulated in the power generating sector to date, and the know-how it expects to acquire through operating Wayang Windu, in an effort to contribute to the realization of Indonesia’s aforementioned development plan. MC also hopes to become further involved in geothermal power generation in countries that possess promising geothermal resources, including Japan.
MC has designated “Infrastructure and Global Environment Business” as a strategic domain in its Midterm Corporate Strategy 2012, and is actively seeking to expand its power generation and transmission business, particularly as it relates to renewable energy, as well as to environment, water and infrastructure businesses. More particularly with regard to the power generation business, MC plans to expand its equity-based capacity from the existing 4,300 MW to 6,000 MW and to achieve a rate of 10 to 20% of that capacity emanating from renewable sources such as geothermal, wind and photovoltaic power generation.”
No pricing is named in this context, but it should be expected that Mitsubishi has an interest to sell its turbines into the Indonesian market via Mitsubishi Heavy Industries.
The Wayang Windu geothermal power plant has a currently operating capacity of 230 MW, of which 110 MW started operation in 2000 and 120 MW in March 2009. Construction of Phase 3 and 4 is expected to increase the capacity by another 190 MW to a total of 420 MW. The power purchaser is PT PLN.
Source: IT News