Pertamina Geothermal allocates $432m in geothermal investments this year

Pertamina Geothermal Energy (PGE), a subsidiary of state-owned PT Pertamina, has set aside US$432 million for several projects including the construction of new power plants, as well as maintenance and exploration in 2015.

“The allocation will be for the development of Kamojang unit 5 as well as ongoing projects such as Ulubelu, Lumut Balai and others. We will also have to perform maintenance work on other existing facilities,” PGE president director Rony Gunawan said on Monday.

Kamojang unit 5, which will have a 35 megawatt (MW) capacity, is scheduled to be completed in July this year. The project, located in West Java, will be the only PGE geothermal project to be completed this year. Progress has now reached 65 percent, according to Rony.

Other projects scheduled to be completed in the near future include Ulubelu unit 3 and 4, which are expected to be finished in July 2016 and May 2017, respectively.

PGE has a total capacity of 402 MW in electricity output from its geothermal power plants, equal to about 33 percent of the country’s total installed capacity of 1,403.5 MW.

Apart from working on power plant construction, the company is also seeking more geothermal energy potential in its working areas via exploration activities.

“This year, we are planning to explore Bukit Daun area in Bengkulu [Sumatra]. This is an expansion of our working area, in which we are trying to develop every corner,” Rony said.

Located in the so-called “ring of fire”, Indonesia is estimated to have a significant amount of geothermal resource potential, of up to 28,000 MW.

However, despite these resources, the country remains heavily dependent on fossil fuels while only around 5 percent of geothermal energy has been developed.

The government plans to develop numerous geothermal power plants, including plants around 4.97 gigawatts, which is part of the second phase of a fast-track electricity procurement program of 17.92 gigawatts in total.

However, progress is sluggish as moves to develop potential are often hampered by the environmental issue as well as lack of financing.

Tapping geothermal potential is known to be a high-risk business in which developers need to disburse millions of dollars for drilling without certainty about the amount of steam that can be obtained.

Last year, the government issued a new law on geothermal energy that eliminated legal barriers of development in the protected areas. However, impact of the new law is estimated to take time, as there are further technical regulations needed.

The government is targeting adding a total of 35,000 MW to its new power plants’ capacity until 2019, of which some will come from geothermal plants.

Energy and Mineral Resources Ministry director general for renewable energy Rida Mulyana said the contribution of the renewable energy sector to the total planned additional capacity would be at around 5,600 MW.

“It will come from three types of renewable energy, namely hydro power plants, biomass and geothermal,” Rida said.

Source: Jakarta Post