Jacobus Purwono, director general for electricity at the Ministry of Energy and Mineral Resources, said outside a workshop on Thursday that under the World Bank’s international carbon-credit trading scheme, Indonesia could trade credits from over 60 percent of the 99 power plants planned for the second phase of the government’s plan to generate 10,000 megawatts of power.
Also at the workshop, Minister of Energy and Mineral Resources Purnomo Yusgiantoro, said that carbon credits had the potential to generate US$30 billion in revenue for Indonesia from through 2012.
Separately, Leiping Wang, a senior energy specialist with the World Bank, said that he welcomed any Indonesian effort to gain and trade carbon credits as part of the second phase of the fast-track electricity program.
The World Bank currently acts as the trustee for 11 carbon funds under the bank’s Carbon Finance Unit, which effectively purchases reductions in greenhouse gas emissions from developing nations using funds donated by advanced economies. Under the World Bank scheme, $1 of carbon leverages $9 of renewable energy financing. “If necessary, the World Bank could raise more money to support the credit-trading plan,” Wang said.
“The most important thing would be to determine how much the Indonesian government would need from us.”
The government plans to build 36 geothermal and 31 hydroelectric plants in the second round of the US$17.25 billion fast-track program, which will likely not be completed by its initial target date of 2014.
The new facilities are expected to add 6,014 MW of energy to the national grid, with gas-powered plants providing an additional 2,616 MW and coal-fired plants 1,281 MW.
State electricity utility PT Perusahaan Listrik Negara, or PLN, has acknowledged that it may only be able to generate 2,000 MW of its 3,000 MW second-phase target due to of a lack of funding.
Independent power producers, which are supposed to provide the rest of the 10,000 MW, have also had difficulty securing financing for their plans.
The first stage of the fast-track program, initially targeted for completion next year, is also in trouble because the biggest lenders behind the project — the Bank of China, China Exim Bank and China Development Bank — recently stopped extending new loans and demanded higher interest rates.
As a result, PLN only expects 1,000 MW to actually come on stream this year. It is also likely to miss its 2010 deadline for the fast-track program’s first stage.
Indonesia was one of the first countries to sign a memorandum of understanding with the World Bank to develop a pragmatic approach to selling carbon credits generated by geothermal electricity.”
Source: The Jakarta Globe
