Geothermal Takes a Step Forward in Indonesia With Sumatra Drill

Kamis, 27 September 2012 | 09:00

Nearly a decade after government set the rules for geothermal energy, a developer on Friday undertook the first exploration drilling for the much-vaunted resource that could help power the nation.Supreme Energy Muara Laboh has started drilling at its working area in South Solok, West Sumatra. The activity is expected to take up to nine months to complete, and will be followed by the construction of a 220 megawatt geothermal power plant should the exploration be successful.

The geothermal energy director at the Energy and Mineral Resources Ministry, Tisnaldi, hailed the project as an historical landmark because it was the first such activity conducted since the government issued the Law on Geothermal Energy in 2003. He added that it was one of the largest energy projects in Sumatra.

“Geothermal projects are crucial in order to make our energy more environmentally friendly in the future, especially considering that our oil, gas and coal resources are in decline,” Tisnaldi said.

If the power plant goes ahead, the project is estimated to cost Rp 7 trillion ($722 million), according to a company statement received on Sunday. “The power plant construction will start in 2014 and is expected to begin commercial operation in 2016,” the statement said.

The electricity generated from the power plant will be dispatched to state utility Perusahaan Listrik Negara’s power grid based on a 30-year power purchase agreement, it said.

Surpeme Energy Muara Laboh is jointly controlled by local company Supreme Energy, France-based International Power-GDF Suez and Japanese firm Sumitomo Corporation.

This project is a part of phase II of a government program to add 10,000 megawatts in generating capacity across the country. While phase I consisted largely of new coal-fired power plants, phase II concentrates on renewable energy.

By 2025, the government expects the portion of electricity generated from renewable energies to reach 17 percent, while diesel fuel will stand at 20 percent, gas at 30 percent and coal at 33 percent.

At present, 5.7 percent of electricity is from renewable sources, 24.5 percent is from coal and 20.1 percent from gas.

To encourage investment, the government this month raised the price floor for renewable ener

by Tito Summa Siahaan