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Indonesia’s
ambitious plan to boost power capacity by 10,000 megawatts in three years might
be in jeopardy because of additional geothermal investor demands, an executive
said.
The
government issued a regulation early this year that stipulated state-owned
Perusahaan Listrik Negara would buy electricity from geothermal power plants at
less than $9.70 per kilowatt hour but at a rate higher than for coal.
The finance
ministry then issued a ruling that would back PLN’s financial condition should
PLN face bankruptcy.
But
investors aren’t satisfied with the decrees and want a promise that PLN will
buy geothermal energy in any price, said Saunusi Satar, vice president for
external affairs of Star Energy, on Wednesday.
“We have
done the exploration activities which involves a lot of risk. We demand a full
guarantee in all of our geothermal activities,” Sanusi said. “PLN should buy
power at any price.”
Geothermal
plants that face possible construction delays include Supramu Energy, Star
Energy, Bakrie Power, Tata Power, and Golden Spike.
Sanusi
explained that the companies would not start drilling into the geothermal well
until the demands are met.
Star Energy
has set aside $210 million to invest in Wayang Windu unit 2, with capacity of
227 megawatts, from the geothermal block in West Java, Sanusi said, and moving
from the exploration stage to power production takes approximately four to five
years.
“It may be
completed after 2015, I think,” Sanusi said, meaning the government’s 2014 goal
will not be met.
The
government’s 2014 power plan includes 4,000 megawatts from geothermal sources.
Muhammad
Sofyan, head of renewable energy division at PLN, said that private companies
should not be worried with PLN’s ability to purchase power.
“We are
committed to buying the power from geothermal power plant,” Sofyan said, adding
that PLN also plans to boost geothermal as the second biggest energy source by
2020.
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