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Medco and Tata in lead for Sumatra Geothermal project

View in the mountains of North Sumatra (source: Flickr/martin_canon500d, creative commons)
Alexander Richter 7 Aug 2010

In the bidding process for the Sorik Marapi geothermal project in Sumatra, Indonesia, the government has shortlisted Medco Energi International and India's Tata Power as bidders.

In the bidding process for the Sorik Marapi, Sumatra geothermal project, “The Indonesian government has shortlisted Medco Energi International and India’s Tata Power as bidders, an official at Ministry of Energy and Mineral Resources said on Friday.”, so news from Indonesia.

“The plant, planned for Sorik Marapi, North Sumatra, would have an initial capacity of 55 megawatts, before gradually ramping up to 200 MW.

Domestic energy explorer Medco is part of a consortium with Ormat Technologies. Tata, India’s largest private sector utility, is partnering with Indonesian firm Supraco Energy for its bid.

“Medco offers a lower electricity price than the Supraco-Tata consortium,” Sugiharto Harsoprayitno, the ministry’s director of geothermal energy, told Reuters.

He said that the “government will evaluate the result of the tender to decide on the winner.”

Oil major Chevron said it had also submitted a bid, but was not shortlisted.

Chevron Geothermal Indonesia, a unit of the US giant, is also interested in bidding for a 220 MW geothermal project in South Sumatra, Harsoprayitno said.

The government has been encouraging electricity companies, including state-owned utility Perusahaan Listrik Negara, to build power plants.

The move is in line with President Susilo Bambang Yudhoyono’s goal of achieving average annual economic growth rate of 6.6 percent over the remainder of his second term, which ends in July 2014.

The ministry has launched the first phase of the fast-track program to add 10,000 MW of generating capacity from 35 new coal-fired power plants, which are mostly still under construction.

The government is still finalizing the second phase of the crash program in order to add another 10,000 MW using coal, geothermal and renewable energy resources.

With hundreds of active and extinct volcanoes, Indonesia has the potential to produce an estimated 27,000 MW of electricity from geothermal sources.

However, that potential remains largely untapped because of the high cost of producing geothermal energy. This would make electricity prices expensive.

Yudhoyono issued a decree on Jan. 8 that would allow PLN to team up with private companies to build power plants, Sugiharto said. As an incentive, the equipment to be used for the projects would also be exempted from import duties, according to the decree. ”

Source: Jakarta Globe