Govt prepares new geothermal rules
Govt prepares new geothermal rules
JAKARTA (JP): The government is preparing a new regulation to
boost the development of geothermal resources and lower
geothermal power prices, according to Minister of Mines and
Energy Kuntoro Mangkusubroto.
Kuntoro announced on Friday that under the planned
presidential decree, all geothermal power projects would be
competitively tendered in order to create fair power prices.
The government will also explore the country's geothermal
resources and offer the geothermal fields to independent power
producers for exploitation and power generation.
This new scheme will reduce the amount of investment for
geothermal development and subsequently reduce geothermal power
prices.
"Investor risk will be reduced and be shared with the
government at the exploration stage," Kuntoro said.
He said the government was determined to develop the country's
geothermal resources because it is a clean and renewable energy
source and the country has huge geothermal resources of 20,000
megawatts.
State oil and gas company Pertamina holds a monopoly on
geothermal resources under a 1991 presidential decree.
The state company may contract private companies to explore
and exploit geothermal resources as well as to generate
electricity using geothermal steam and sell the electricity to
state electricity company PLN or to other industries.
PLN has thus far signed power purchase agreements to buy power
from 11 geothermal power plants located in Sarulla and Sibayak,
both in North Sumatra; Salak, Patuha, Karaha, Kamojang, Wayang
Windu, Cibuni and Darajat, all in West Java; Dieng in Central
Java; and Bedugul on Bali.
All the geothermal power projects were awarded without
tender.
Geothermal contractors sell their power to PLN for an average
7 U.S. cents per kilowatt hour, higher than the average price of
power charged by contractors of coal and gas-fired power plants.
Analysts attribute the high price for geothermal power to the
fact that geothermal contractors received their projects without
competitive bidding and they spend a lot of investment in
exploration. (jsk)