Tue, 30 Mar 2010

In Indonesia, the news came fast and furious over the week on the heels of a $400 million commitment by the World Bank’s Trust Fund Committee of the Clean Technology Fund (CTF) to help transform Indonesia’s use of renewable energy endorsed. The plan will use co-financing from the multilateral CTF to expand large-scale geothermal power plants, doubling their output, and to accelerate initiatives to promote energy efficiency and renewable energy.

Now everyone wants a piece of the pie and our opinion item has a top U.S. business leader encouraging the Obama administration to sell the country in an upcoming visit to the nation. And while that piece focuses on Chinese interest, India is hard at work.

India’s Tata Power Co Ltd, along with Chevron Corp’s Indonesian unit, PT Supraco Energy, are among several firms that are bidding for a geothermal power project in the country. The bids are to build a geothermal power plant in Sorik Merapi, North Sumatra, with initial capacity of 55 MW. However, Tata is reportedly interested in developing up 1,500 MW. Indonesia is looking to add 10,000 MW of power from coal, geothermal and renewable energy resources, after it has finished adding 10,000 MW from 35 new coal-fired power plants, which are under construction.

Meanwhile, the U.S. Trade and Development Agency awarded nearly $1 million to Indonesia Power (IP) that will benefit Utah-based Raser Technologies, Inc. Raser and IP entered into a consortium agreement in 2007 for geothermal development in Indonesia. In 2008, IP and Raser were awarded a 100,000 acre concession surrounding the Tangkuban Perahu volcano in West Java Province.

The grant will fund a feasibility study at Tangkuban Perahu, and Raser is to be the sole-source contractor on the study. IP is Indonesia’s second largest GT power supplier, generating 375 MW, and the largest electricity generation company, with nearly 9,000 MW of total capacity.

The governement in Jakarta is hard at work as well. It announced tax incentives to develop renewable energy projects, including geothermal, looking to cut dependency on fossil fuels, acording to a decree published from the finance ministry. Indonesia is targeting by 2025 an energy use mix of 30% from gas, 20% from oil-based fuels, 30% coal, and the rest from renewables such as geothermal and solar power. Given its 27,000 MW geothermal reserves, you can bet ut will lean heavily in that direction.

Since it is having trouble finding financing, the country’s state-run power firm, PT Perusahaan Listrik Negara (PLN) is looking to transfer six geothermal projects to private power producers. PLN was to construct 11 geothermal power plants with a total capacity of 880 MW. Funding difficulties aside, the time is right, given the World Bank’s influx, which requires equivalent private monies.

Finally, the province of Lampung is looking for someone to manage the Suoh-Sekincau geothermal power plant. The government will hold an auction in April to sell the rights. The piece goes on to note that the area comprises of two blocks of geothermal potential, Suoh and Sekincau, with a potential to generate 430 megawatts (MW) of electricity. It is unclear if a plant is already up and running, or if the auction is for development rights only.