Indonesian govt to raise price of electricity from geothermal plants

Kamis, 13 Juni 2013 | 10:07

The government plans to increase the price of electricity to be bought by state-owned electricity company PT PLN from geothermal power plants from maximally US$0.17 to US$030 per kWh.Energy minister Jero Wacik said here on Wednesday the price revision was expected to be able to increase the use of geothermal energy.

"The tariff will be set through an auction with the lowest bidder to be the winner," he said.

The director of new and renewable energy and energy conservation of the ministry of energy and mineral resources, Rida Mulyana, said the electricity price from geothermal plants would be at the range of 11.5 to 30 cents in the US dollar per kWh.

The variety of prices will be determined upon the plants` geothermal and generating capacity.

The lowest price of 11.5 cents per kWh is based on plants with a capacity of more than 55 MW and geothermal of more than 225 Celsius.

The highest price of 30 cents meanwhile is based on the capacity assumption of less than 5 MW and geothermal capacity of less than 225 Celsius.

"The smaller the plant and its geothermal capacity the bigger the investment will be," he said.

Rida said the previous pricing policy did not give a significant effect because it did not take into account location, plant capacity, transmission, escalation, assignment mechanism and reservoir quality.

"We are now still formulating an upstream and downstream comprehensive price structure to give legal certainty and overcome the problem of delayed projects," he said.

He said the geothermal electricity tariff would be issued in the form of a ministerial regulation next week at the latest.

The regulation will be effective for new purchase contracts, he said.