Seventeen companies, including U.S. oil giant Chevron and the nation's second largest oil producer Medco Energi Internasional, have tabled bids to develop geothermal projects in West Java, an official says.
Sugiharto Harsoprayitno, director for the management of geothermal power at the Energy and Mineral Resources Ministry, said Friday the firms had bid for three projects currently being put in a tender by the West Java administration.
The three projects will have a capacity to generate a combined 315 megawatts (MW). They are Tangkuban Perahu (220 MW), Cisolok Sukarame (45 MW) and Tampomas (50 MW).
Sugiharto said the winners of the tender would be announced within two or three months, and that he expected the projects could begin development soon afterward.
"We estimate that each developer will need about two or three years to carry out the exploration activities, so we predict that all projects will be operational in 2011," Sugiharto said.
Indonesia has a huge geothermal potential, with 40 percent of the world's reserves and an estimated capacity to produce 27,700 MW.
However, there are only several geothermal plants across the nation, with a combined capacity of 1,042 MW.
Sugiharto said the government was intensifying the development of geothermal energy as part of its plan to use more renewable energy in the country's power sector.
Under its latest long-term 10,000 MW power project, the government will mostly use renewable energies, including hydro biomass and geothermal energy.
Sugiharto said he hoped a regulation on pricing for electricity produced from geothermal sources would provide certainty to investors.
Under the regulation, the price of electricity per kilowatt-hour (kWh) produced by geothermal plants with a capacity of above 55 MW is set at 80 percent of the average production cost of conventional fuel powered plants.
While for plants between 10 and 55 MW, electricity is priced at 85 percent of conventional costs.
Electricity produced from geothermal-fired power plants with less than 10 MW capacities will be priced between 60 and 80 percent of conventional costs.
In support the development of clean energy in Indonesia, the World Bank (WB) recently approved a US$4 million grant to the government to develop the eco-friendly geothermal sector.
The grant will be used to fund a project aimed at increasing the country's geothermal capacity to 6,000 MW by 2020, WB country director for Indonesia Joachim von Amsberg said in a statement.