Govt to resume Karaha Bodas power project

The Jakarta Post, JAKARTA | Fri, 04/03/2009 10:07 AM

State oil and gas company Pertamina will resume next year the long delayed geothermal power plant project at Karaha Bodas in Garut, West Java, says an official of Pertamina’s subsidiary.

President Director PT Pertamina Geothermal Energy, Abadi Poernomo said Thursday Pertamina was ready to fund the project that would cost between US$50 and 60 million.

“The project will be funded by a corporate loan, from Pertamina to its subsidiary [PT Pertamina Geothermal Energy - PGE],” Abadi said.

Karaha Bodas was originally a joint project between Pertamina, state power company PLN and the US-based Karaha Bodas Company.

Before postponement during the 1997-8 economic crisis, the Karaha Bodas Company and geothermal power plant were controlled by two US companies –Florida Power Energy LLC and Caithness Energy LLC.

It was part of a package of 21 power projects reviewed by the government in 1997. Karaha Bodas was then delayed because of problems related to the economic crisis.

But the delay led to a string of arbitration proceedings, including one filed by Karaha Bodas.

Pertamina argued the delay reflected recommendations of the International Monetary Fund (IMF).

Abadi said PGE had finished the feasibility study and the Karaha Bodas project should start up in 2013.

“The power plant will have a 30 megawatts capacity, but open for capacity expansion if needed,”

The resumed Karaha Bodas project is owned by PGE and is part of the state owned power utility PLN’s second-phase 10,000 MW power generation crash program.

Projects under the first 10,000 MW program belong to PLN, but the second 10,000 MW program includes projects with independent power producers (IPPs).

The total project capacity of the second program will be about 9,963 MW. The IPPs are expected to generate about 40 percent of this total capacity.

The first-phase program was launched in 2006 to meet power shortages and increasing demand for electricity nationwide, especially for the Java-Bali system.

It is planned geothermal energy will play an important role in the second phase of the crash program.

Geothermal energy is expected to power nearly half of the projects in the second phase program. Hydro-power will account for 1,174 MW, with coal and gas providing the remaining 4,056 MW.

Abadi said PGE will sell power from Karaha Bodas to PLN.

“But we haven’t [yet] had a negotiation with PLN concerning the rate ,” he added.

According to Abadi, the sales price for geothermal power is between 7 and 9 US cents per Kwh.