Indonesian electricity company urged to buy geothermal power

Indonesian electricity company urged to buy geothermal power Sibayak, geothermal plant, Lampung/ Indonesia (source: arthaliwa.wordpress)
Alexander Richter 14 Oct 2010

The Indonesian Geothermal Association urges the government to instruct state-run electricity company PT PLN to buy geothermal electricity.

Reported from Indonesia, “The Indonesian Geothermal Association chairman, Surya Darma urged the government to instruct state-run electricity company PT PLN to buy geothermal electricity. The reason was that although the Energy and Mineral Resources Ministry Regulation no. 32/2009 on the price of geothermal electricity has been issued, PLN still has not implemented it.

Surya said the regulation sets the geothermal electricity price at US$ 9,7 cent per kWh. “I don’t know if it’s because the price is too high or PLN simply doesn’t want to buy it,” he said yesterday.

In addition, the government has been urged to form a special organization to manage geothermal power. This organization will determine how the geothermal power is to be distributed, for instance, by PLN.

He said PLN can actually buy geothermal electricity as of the beginning of this year. This was set in Presidential Regulation No.4/2010 on the acceleration of the second phase construction of the 10.000 megawatt generator. Yet, PLN did not buy it. “They said there was not a legal umbrella regulating the purchase price of geothermal electricity,” he said.

The Energy and Mineral Resources Minister Darwin Zahedy Saleh said PLN cannot purchase geothermal electricity because there was no legal umbrella regulating the purchase of geothermal electricity. As a corporation, PLN cannot buy it with a price higher than that of electricity produced by fuel oill.

“PLN can only buy electricity when a regulation has been issued by the Development and Finance Controller because verification is required to purchase electricity,” he said.

In addition, Darwin said, that PLN cannot directly buy electricity from geothermal producers who won the tender. As such, the Energy Ministry has drafted a regulation that will become a legal umbrella allowing PLN to buy geothermal electricity from any party. However, the law which was to be ratified by the President as of last month is still stuck at the Cabinet Secretary’s desk.

Darwin explained that Indonesia controls 40 percent of the world’s geothermal potential, but only utilizes 4 percent of it. Indonesia is also the third biggest geothermal producer in the world after the US and the Philippines. The capacity that can be produced from geothermal power is 28.000 megawatt.

A few local geothermal projects that are now producing electricity include the Geothermal Power Plant projects in Bumi Ulumbu in East Nusa Tenggara; Sarulla in North Tapanuli; Sibayak in North Sumatera; Ulubelu in Lampung; and Lahendong in North Sulawesi.”

Source: Tempo Interactive