Star Energy improves output at Wayang Windu and explores 60 MW expansion

Wayang Windu Unit II, West Java, Indonesia (source: Aecom)
Alexander Richter 21 May 2016

In a recent financial rating report, Star Energy Geothermal reports being back on track with output of its Wayang Windu geothermal power plants and is exploring a 60 MW expansion.

In a rating update, Fitch Ratings provides some details on the status of geothermal operations by Star Energy Geothermal’s activities at Wayang Windu in Indonesia.

Confirming a stable rating, Fitch reports that operations are back on track for the company. This is based on availability and capacity factor that have “rebounded since the resumption of operations following a four-month shutdown in 2015 due to pipeline damage. Its availability factor was again close to 100% in 1Q16, compared with 65% in 2015. Its capacity factor (indicator of plant efficiency) in 1Q16 was over 95%, better than the industry average.

SEG’s steam supply has also improved to 529kg/s by end-March 2016, after remaining below the optimal level of 450kg/s for the bulk of the last three years. SEG is in the midst of a make-up well-drilling programme comprising of six wells over 2015-2016 (to make-up for the steam supply decline). We expect the resultant steam-supply boost to be adequate to sustain utilisation rates over the next three years.

Higher Power Tariffs: SEG’s power tariff is scheduled to increase by 3.1 US cents per KWh, from around 6 cents per KWh. The company is in the process of amending its energy sales contract (ESC) with PLN to reflect the higher tariff for its units 1 and 2. The revised tariff was approved by the Minister of Energy and Mineral Resources (MoEMR) on 5 April 2016, and higher tariffs would be applicable from that date once the ESC between SEG and PLN is amended.

All of this has a positive financial impact as tariff increase would improve the financial profile and cash flow for the company.

Star Energy is still evaluating an expansion with an additional unit that would add 60 MW in generating capacity. There are ongoing discussions with PLN to agree on a suitable power tariff from the new unit. The decision on the expansion would though still depend on the available steam output after the drilling programme to be conducted.

Source: Fitch Ratings