Java and Sumatra to see a focus on coal-fired plants over geothermal development

Mount Slamet, Central Java, Indonesia (source: flickr/ stwn, creative commons)
Alexander Richter 14 May 2018

With PLN as only offtaker and a focus solely on electricity price in a challenging economic environment, the Indonesian regions of Java and Sumatra will see a focus on coal-powered plants over geothermal power plants .

In an article published today, it is reported that Java and Sumatera (Sumatra) regions will see a prioritisation on the development of coal-fired power plants (PLTU) rather than geothermal power plants (PLTP).

Abadi Purnomo, Member of the National Energy Board (DEN), said due to the current low purchasing power of the people, it is more likely that the region will see a focus on the development of coal-fired steam power plant.

“Geothermal will be set aside for the areas of Java and Sumatra, because they can not compete with coal. Geothermal is developed in the east, where BPP is still double digits, “Abadi told in the interview.
Abadi said the development of geothermal energy will continue to be sustainable. Although the current development of geothermal power plants is still a slow path, investment continues to flow. One day geothermal development will reach a tipping point. Investors essentially hope for a sustainable and stable regulatory environment that allows for a stable path of development.

“The main problem is that there is with PT PLN (Persero) only one off-taker. PLN is still thinking that the more positive power plant absorption, making it prioritising coal. And, until now this still aligns with the national general energy plan, “said Abadi.

Total capacity of geothermal power plants in the first quarter of 2018 reached 1,924.5 MW (MW) from the target until the end of 2018 of 2,058.5 MW. This achievement puts Indonesia as the second largest geothermal power producer in the world after the United States, which was originally occupied by the Philippines.

The additional installed capacity of PLTP in 2018 comes from the operation of Karaha PLTP capacity of 30 MW and PLTP Sarulla Unit 3 capacity of 110 MW, which has COD 2 April 2018 capacity of 86 MW. Next will follow in August 2018 PLTP Sorik Marapi Modullar Unit 1 with capacity of 20 MW, and PLTP Sorik Marapi Unit 1 capacity of 30 MW, PLTP Lumut Balai Unit 1 capacity 55 MW, and PLTP Sokoria Unit 1 capacity 5 MW in December 2018.

Some of the groundbreaking efforts of geothermal development carried out by the government include the development of geothermal in the eastern region, the assignment to State-owned Enterprises (SOEs), the simplification of licensing, the introduction of preliminary and exploratory surveys, and the geothermal fund and government drilling.

According to Abadi, economic growth is not as expected. When creating the planned new renewable energy mix (EBT) goals, the economic growth was projected with 7%, but is now only at 5%.

With lower electricity growth, there will also be a slow-down in development of power plants. But Indonesia will stay committed on its 23% renewables in its energy mix, according to the climate change commitment at COP 21, “said Abadi.

Source: Dunia Energi