tagged w/ Sumitomo
Japan-based Sumitomo Corporation will team up with International Power GDF Suez and PT Supreme Energy to build two geothermal power plants in Muaralaboh in West Sumatra and Rajabasa in Lampung.
The power plants will have a total capacity of 2x110 megawatts (MW) each. State power utility PT PLN will then buy the electricity with the price of 9.4 US cents per kilowatt-hour for Muaralaboh and 9.5 cents for Rajabasa.
The investment value for the Muaralaboh power plant reaches $661 million, while the Rajabasa plant hits $683 million. The mining permits for the two geothermal blocks were awarded in early 2010 and would last for 35 years. The plants are expected to begin commercial operations in 2016.
Indonesia is home to 40 percent of the world’s geothermal reserves with the potential of producing more than 27,000 MW of power. However, as of today, the country can only generate 1,341 MW of power from geothermal power plants, or only 4.6 percent of its total potential.
“The two projects are part of the second phase of the 10,000 megawatts [MW] fast-track program,” PLN president director Nur Pamudji said during his speech at the signing ceremony of the power purchase agreements (PPAs) at the Finance Ministry in Jakarta on Friday.
“Electricity produced from the plants will be connected to the Sumatra interconnection system which spans from Lampung to Aceh,” he added.
Coinciding with the signing, Finance Minister Agus Martowardojo announced that the government had issued guarantee letters for PLN’s business worthiness (SJKU) for the two projects to help developers find financing.
“The guarantee letters are part of the ministry’s commitment to accelerate the construction of power plants using renewable energy, coal and natural gas by independent power producers [IPP],” he explained.
Coordinating Economic Minister Hatta Rajasa claimed the guarantee would pave the way for the resurgence of geothermal development in the country. He said a few decades ago, Indonesia was known for its most effective and efficient Kamojang geothermal power plant in West Java.
“But after that, we spent too much time on discussing plans, but not in executing them,” he emphasized.
Pamudji expected that the issuance of the guarantee letters could be a good precedent for other geothermal projects. He reported that the company was now in negotiations with several other developers across the country.
Indonesia has the potential to become the world's geothermal energy superpower, said Nobel Peace Prize laureate and former U.S. Vice President Al Gore.
Gore spoke Sunday to 350 participants from 21 countries gathered in Jakarta for the Asia Pacific Summit for the Climate Project.
"Scientists and engineers are now saying confidently that certain forms of enhanced geothermal electricity production may represent one of the largest resources of carbon-free electricity available in the world today," Gore said, Indonesia's Antara news agency reports.
"And Indonesia could be a superpower of geothermal electricity. With the new regional super grids that are being proposed on every continent, it can be a significant advance for Indonesia's economy."
Indonesia, Southeast Asia's largest economy, claims about 40 percent of the world's geothermal reserves.
By 2020, the Indonesian government wants to provide electricity access to 90 percent of its population; about 65 percent currently have access.
Last March Indonesia's energy and mineral resources ministry revised the country's geothermal potential to 28,100 megawatts, up from 27,000 megawatts a decade ago.
The ministry's geological agency said that with 30 years of operation, Indonesia's revised geothermal potential was equal to 12 billion barrels of oil. That compares with the country's current oil reserves of 6.4 billion barrels.
Under Indonesia's national energy policy, the government aims to obtain 95,000 megawatts of power from geothermal sources by 2025. Less than 1,200 megawatts of geothermal energy has been explored.
Because of their dependence on agriculture and limited resources, developing countries in the Asia-Pacific area are more vulnerable to climate changes, yet the region has many opportunities to deal with the issue, Gore said.
During the U.N. Climate Change Conference in Copenhagen, Denmark, in December 2009, Indonesian President Susilo Bambang Yudhoyono announced plans to voluntarily cut emissions by 26 percent by 2020.
Gore praised Yudhoyono's Copenhagen initiative, saying that the president had spoken at a time when no other leader of the Group of 77 nations -- a coalition of developing nations -- was willing to step up and make such a commitment.
http://www.upi.com/Business_News/Energy-Resources/2011/01/10/Gore-Indonesias-geothermal-potential/UPI-97421294689326/Japan-based Sumitomo Corporation will team up with International Power GDF Suez and PT... more