Supreme Energy negotiating tariff increase for planned geothermal projects

Supreme Energy negotiating tariff increase for planned geothermal projects Coastal view, Lampung, Sumatra (source: flickr/ trugiaz, creative commons)
Alexander Richter 15 Sep 2015

Supreme Energy is in negotiations with the government of Indonesia for a price increase for its geothermal projects, stating it requires an increase to cover development costs.

In news from Indonesia, PT Supreme Energy will only continue its geothermal project when there is a government decision on the power price, so field relations manager Yulnofrins Napilus.

The company has three geothermal power projects — in South Sumatra, Lampung and South Solok. The geothermal power to be generated is to be sold to state-owned power utility PLN under price contract. The company has proposed ‘adjustment’ of tariff to the government  as the old tariff of 9.4 US cent per kwh is too low for the cost the company has paid for explorations,” Napilus said earlier this week. Currently the government and the company are still in the process of negotiating the proposed tariff, he said.

“We hope the government  could accept the proposed price that all potentials could be  fully utilized,” he said.

If agreement has been reached on the power price, work could start to build the facility  in 2016, he added. “Everything depends on price negotiation,” he said.

Supreme Energy Muaralabuh has carried out drilling  in six points  but geothermal steam is found only in three of the wells. The three wells are named MLA, MLh1 and MLH2.

“MLA has large reserve. Ii is even one of the largest in  Indonesia with a capacity of 25 megawatts,” he said. The other two wells MLh1 and MLH2 have small capacity of 3-5 MW.

“We already have 30 MW on the surface but could not yet processed  as the tariff has no economic value yet for the company,” he said.

The project in South Sumatra is smaller than the one in South Solok  and the one in Lampung is completely not yet touched pending the result of the tariff negotiation, he said. Meanwhile regent of South Solok  Erizal said the geothermal power project would  contribute to the district economy.

Therefore, he said, he hoped the project could be implemented  as scheduled.

Source: Antaranews