Geothermal Takes a Step Forward in Indonesia With Sumatra Drill

Jakarta Globe, Tito Summa Siahaan, September 24, 2012

This 2010 file photo shows an Indonesian worker of PT Pertamina Geothermal
 Energy checking a production well in Kamojang. The government has announced
 it will raise the price of three types of renewable energies for electricity needs,
saying the move is necessary to encourage Indonesia's overall renewable
energy production. (AFP Photo/FILES/ ADEK BERRY)

               

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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 energy.

Astra Introduces New Low-Cost Green Car

Jakarta Globe, Faisal Maliki Baskoro, September 19, 2012

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Astra International on Wednesday introduced its new low-cost green car, with the price tag expected at less than $10,000.

To be sold as both the Toyota Agya and Daihatsu Ayla, the car is being produced cooperatively by Toyota Motor Corporation and Daihatsu Motor Company. It is the third car collaboration between Toyota and Daihatsu, after their Avanza-Xenia and Rush-Terios models.

“We believe with the fuel subsidy difficulties, low fuel consumption cars will get a positive response,” said Prijono Sugiarto, the president director of Astra International. “The demand for environmentally [friendly] cars is increasing along with global warming. This car answers both problems.”

“The designer of the car is an Indonesian named Mark Wijaya,” Prijono added.

The car reportedly consumes just one liter for every 30 kilometers driven. The aluminum-bodied “city car” carries up to five passengers.

The car will be produced in the new factory of Astra Daihatsu Motor in East Karawang, West Java.

Amelia Tjandra, marketing director for Astra Daihatsu Motor, said the price of the car, with four variants, will range from Rp 75 million ($7,900) for the most basic option (without AC, power steering, radio) to Rp 105 million.

“The price is subject to change depending on the government’s policy [on low-cost green cars, or LCGC], but people can start booking,” Amelia said.

Sudirman MR, president director of Astra Daihatsu Motor, said the price could be below Rp 100 million if the government freed up LCGCs from additional luxury goods taxes.

Geothermals Boosted by New Price Floor

Jakarta Globe, Tito Summa Siahaan, August 30, 2012

A geothermal power plant in Wayang Windu, West Java. (GA Photo/M. Defrizal)  

      

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s debate rages on the legacy likely to be left by President Susilo Bambang Yudhoyono when he leaves office, one contender is his efforts to encourage Indonesians to embrace a lower-carbon economy.

The president is aiming to bring the contribution of renewables to the national energy mix to 25 percent by 2025 and 35 percent by 2050.

Those renewables are likely to be sourced largely from the country’s vast geothermal potential, which some estimates put at 40 percent of the world’s reserves, and hydropower.

State funding alone will not be enough to achieve such an energy mix, so private investors must be lured to participate.

Energy and Mineral Resources Minister Jero Wacik said on Wednesday that he had signed a decree that will increase the tariff for electricity generated from geothermal power plants. The decree will soon be made official in the form of regulation, probably this week, the minister added.

He said that the decree will set the minimum tariff for geothermal electricity at 10 cents per kilowatt hour in Sumatra; 11 cents per kWh in Java and Bali; 12 cents per kWh in Central, Southeast and North Sulawesi; 13 cents per kWh in North Sulawesi and Gorontalo; 14 cents per kWh for East and West Nusa Tenggara; and 18 cents per kWh for Papua.

Jero said the government realized there was a need to massively develop the nation’s geothermal potential and that investors had shown excitement toward the sector when the plan to raise the tariff was announced.

“We only utilize around 5 percent of geothermal potential. I estimate that around 6,000 megawatts of electricity can be generated [from geothermal],” Jero said.

While a more attractive tariff will increase private investor interest in geothermal projects, investment returns are just one of the limitations curbing activity.

Motofumi Kohara from the Japan International Cooperation Agency, a government body involved in Indonesia’s infrastructure development, said the issue of complicated permits and the risk that investors must carry acted as constraints on the development of geothermal projects.

Speaking at the Indonesia International Infrastructure Conference and Exhibition 2012 currently taking place in Jakarta, Kohara said the government needed to mitigate the risk borne by independent power producers during the exploration stage of geothermal projects.

Furthermore, he noted, half the geothermal projects in the second phase of a government program to fast-track the development of electricity generators require permission to use forests, another concerning issues.

While investors in geothermal projects may soon enjoy a higher return, a cautious approach is still evident in the hydropower sector.

Josef M. Ullmer, the president director of Andritz Hydro, an equipment distributor for hydropower plants, called on the government to show more commitment in its push for hydropower projects.

“Hydropower is the cheapest of all energy sources and has a 90 percent efficiency rate,” he said.

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Pertamina’s Geothermal Push Gets a Price Boost

Pertamina’s Geothermal Push Gets a Price Boost

Jakarta Globe, August 15, 2012

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Pertamina Geothermal Energy, a subsidiary of state energy firm Pertamina, plans to develop another eight geothermal projects after the government announced that the electricity price from geothermal power plants would be increased to make the sector more attractive.

Work on the projects is expected to begin next year but there was no information on where they would be located.

Slamet Riyadhi, president director of PGE, said the company planned to spend an additional $2.7 billion on geothermal projects. That is in addition to the $6 billion it has invested in the ongoing development of 10 geothermal projects.

The new projects would generate 900 megawatts of electricity, he said. The 10 projects already in development would have an estimated combined capacity of 962 megawatts once completed.

The energy and mineral resources minister, Jero Wacik, announced last month that the purchase price of electricity produced by geothermal sources would be increased from 9.7 cents per kilowatt hour to between 10 cents and 17 cents per kilowatt hour, depending on the location.

“If the government makes this price increase official this year, we can start the process of surveying for the new projects next year,” Slamet said.

He said the internal rate of return, a measure of profitability on investment, for geothermal projects under the current price of 9.7 cents per kilowatt hour was 9 percent.

“That is well below the ideal 11 to 14 percent rate for investment in renewable energy,” Slamet said. He added that an 11 to 14 percent rate of investment return could be reached under the proposed new price.

He said the current price structure left investors reluctant to develop geothermal projects, particularly with the additional upstream risks they faced.

“Now they will have no more excuses,” he said.

Slamet said the Energy and Mineral Resources Ministry and the Forestry Ministry had signed a memorandum of understanding on the utilization of forest areas for geothermal projects that could speed up the process of obtaining permits.

“Now we can secure a permit for a geothermal project a month or two faster than usual,” he said. “This is good. Now we can achieve our target of generating 2,000MW of electricity in 2018, ahead of our previous timeline of 2020.”

Indonesia is said to hold some 40 percent of the world’s geothermal energy potential. Unlike other energy sources, however, geothermal energy cannot be transported so a power plant must be built near the source to tap it, making investment more expensive.

Investor Daily

High-Tech Reverse Osmosis Water Plant on Its Way to Riau Islands, Ministry Says

Jakarta Globe, July 28, 2012

Water vendors fill up jerry cans in Madura, East Java. The water comes
from a plant that uses reverse osmosis. (JG Photo/Safir Makki)  

   

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The national government is planning to build a plant to convert seawater into drinking water using reverse osmosis technology in Tanjung Pinang, Riau Islands, an official said on Friday.

The plant will have a clean water production capacity of 50 liters per second, said Danny Sutjiono, director for drinking water development at the Public Works Ministry.

“This is estimated to be able to meet the demand for 40,000 customers at a tariff of around Rp 8,000 to Rp 9,000 per cubic meter per second,” Danny said.

Danny said the project was now in the tender phase for construction. He said that he hoped a contract could be signed in October and that construction could start immediately thereafter.

“I hope the project will be operational at the end of 2013,” he added.

Reverse osmosis is expensive. Danny said the investment needed for the Riau Islands project was four times what freshwater projects of a similar scale would cost.

The Public Works Ministry said it would allocate Rp 40 billion ($4.24 million) to build the plant.

The winner of the tender must not only construct the physical facility but also operate the plant and build the necessary distribution pipeline network, Danny said.

“They will have to handle the construction process and the provision of water. All we want is for the seawater to be processed into drinking water and channeled to the houses,” he said.

The ministry has already built one reverse osmosis plant, on Mandangin island in Sampang, East Java, off the coast of the larger Madura island.

That plant has a similar production capacity to that of the proposed Riau Islands facility. After the Mandangin plant is officially inaugurated by Public Works Minister Djoko Kirmanto in early August, it will serve an estimated 20,000 people.

That plant’s water sells for Rp 12,000 per cubic meter per second, Danny said.

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Local, Chinese Firms Propose Solar Plant Costing $200m

Jakarta Globe, July 19, 2012

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Chinese state company Shanghai Aerospace Automobile Electromechanical and a local solar panel firm, Basel Investindo, have announced plans to build a 200 megawatt solar power plant, with a total investment of $200 million.

The president director of Basel Investindo, Edwin Henawan Soekowati, said Indonesia should be one of the countries with the most potential to utilize solar power, thanks to its tropical climate.

He said Indonesia should be serious in developing renewable energy such as solar power as its oil reserves dwindle.

“Indonesia is now a net importer of oil. Looking forward, fossil fuel is getting more expensive. Now the government is chasing coal, but that will also run out one day. That’s why solar panel technology must be developed,” Edwin said.

He said Basel and SAAE had signed a memorandum of understanding with the directorate general for renewable energy at the Energy and Mineral Resources Ministry. The signing was done at a renewable energy exhibition in Jakarta.

“The Chinese state company has expertise in making solar panels ... this kind of technology suits the need of Indonesia’s rural areas, which have not yet been touched by electricity,” he said.

The $600 million plant will be built in Indonesia’s eastern region.

Edwin admitted that the cost of building a solar-powered plant was more expensive than a coal-fired power plant. He said it would cost $3 million per megawatt of electricity capacity generated from solar panels, while using coal only costs $1.5 million per megawatt.

However, he argued that solar panels were cheaper to maintain.

Apart from Basel, Sharp, Samsung and Infinity are also developing solar panel technology in Indonesia.

Investor Daily

VP opens renewable energy conference 2012

The Jakarta Post, Rabby Pramudatama, Jakarta, July 17 2012

Boediono: (Antara/Puspa Perwitasari)

Vice President Boediono kicked off the 2012 Indonesia Renewable Energy and Energy Conservation conference and exhibition at the Jakarta Convention Center (JCC) on Tuesday.

The event, which was initiated by the Indonesian Renewable Energy Society (METI) and is supported by the government, is open to the public from July 17 to 19.

“The technologies for developing renewable energy have been advancing rapidly. They have also become much more economic. We are lucky to have such diverse sources of energy ... that we can rely on in the future,” Boediono said at the opening ceremony.

He said it was important to synchronize political, economic and environmental aspects to support the development of the country’s renewable energy and energy conservation policies.

Aside from the conference, as many as 75 international and local companies working in the energy field are participating in the event to showcase their products and achievements in renewable energy innovation. (iwa)

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National Electric Car Can Begin Mass Production in 2013: Dahlan

Jakarta Globe, July 16, 2012

Depok Mayor Nurmahmudi Ismail, in the driver’s seat, tests an electric
 car on Jatimulya in Depok in West Java, on Friday. The car, which was
 invented by Depok resident Dasep Ahmadi, reportedly runs 150 kilometers,
 or between four and five hours on a single charge. (Antara Photo/Indrianto
Eko Suwarso)

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State-Owned Enterprises Minister Dahlan Iskan said on Monday that the country can begin mass production of the national electric car as early as next year after doing a test drive of its prototype on Monday. 

“If the infrastructure is ready, we can start mass producing the car with a capacity of 5,000 units per year,” he claimed. 

The minister drove the prototype of the Ahmadi Mesin 5.0 electric car, which was named after its maker Dasep Ahmadi, 48 kilometers from its garage at Jati Mulya, on the outskirts of Jakarta, to the Research and Technology Ministry building on Jalan Thamrin in Central Jakarta. 

The prototype so far only has a local police road certificate since regulations on taxes and registrations for electric vehicles, which do not fall under existing categories, have yet to be put in place.

Dahlan said President Susilo Bambang Yudhoyono has already instructed the ministers for industry, research and technology and trade to work on the necessary regulations. 

“Within the next three months, there should be a clear technical guide for commercial regulations, so that the car can be mass produced,” Dahlan said. 

Besides Ahmadi’s electric car, there are four other versions in the final stages of completion under the minibus, city car and sports car categories.

Antara

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Indonesia 's PIP allocates Rp1.8 trillion for geothermal investment

Antara News, Sat, July 14 2012

Jakarta (ANTARA News) - Government investment agency Pusat Investasi Pemerintah (PIP) has allocated around US$192 million for investment in the geothermal sector in the second semester this year, PIP chief Soritaon Siregar said.

"A total of US$132 million of the funds will be for exploitation activities and US$60 million for two projects now still under exploration," he said in Banten on Saturday.

He said the investment for geothermal projects is indeed huge because the government is striving to increase electricity supply from renewable sources.

On the other hand, he said, the geothermal investment is also risky as only three out of ten explorations could be continued to a exploitation stage.

In view of that it is difficult to expect private parties to develop the business by themselves, he said.

"To reduce risks PIP is now setting up a team of the best consultants in the world hailing from Japan, Norway, Australia and the US," he said.

They will be assigned to appoint technical, legal and financial consultants and supervisors to analyze the investment risks seen from various fields.

Regarding mini hydro-power projects (PLTMH) PIP meanwhile has allocated around Rp649 billion distributed to 29 applicants for investment loans, he said.

"All the applicants for the PLTMH projects are private because the value of the project is too small to be carried out a state-owned enterprise," he said.

He said the PLTMH projects are located in Sumatra, Java and Sulawesi.

Besides geothermal and PLTMH projects PIP also plans in the second semestet to purchase securities worth Rp1.5 trillion and carry out a public-private partnership project worth Rp100 billion.

Total funds provided for investment in the same year is Rp13.280 trillion.

Editor: Suryanto

Indonesia, Germany team on geothermal energy

Deutsche Welle, 12 July 2012

Indonesia is said to have the world's largest geothermal energy reserves but their potential remains mostly untapped. That could soon change with German know-how.

With 240 million people, Indonesia is the biggest and fastest growing market in Southeast Asia. And as the country's economy grows, so, too, does its demand for electricity.

President Susilo Bambang Yudhoyono is a self-acclaimed fan of "green energy." In a meeting with German Chancellor Angela Merkel during her recent visit to Indonesia, Yudhoyono talked about one of his major goals: to give greater focus to alternative energy resources such as wind, solar and, in particular, geothermal heat.

Untapped resources

Volcanic areas, like Indonesia, are a rich source of geothermal energy. The island nation is situated on the so-called "Ring of Fire" volcanic belt, which encircles the Pacific Ocean, accounting for 40 percent of the world's geothermal reserves - more than any other country. 

Indonesia lies in Pacific's volcanic
'Ring of Fire'

The government has pinpointed 250 locations where geothermal energy can be produced, including Seulawah on Sumatra, Ijen on Java and Tomohon on Sulawesi. Today, just 15 geothermal plants are in operation, with the last one going live in 1997.

Not all geothermal fields, however, are suited for commercial energy use because they don't have the right temperature, pressure or permeability.

"With geophysical, geochemical and geological tests, you try to get a picture of what it looks like inside the Earth," says Thorsten Schneider from Germany's KfW Entwicklungsbank in Jakarta.

After the test, drilling begins, representing a huge financial risk, according to Schneider. "A typical drilling costs between 3 and 5 million US dollars," he says. "And if you find nothing, the money is gone."

Expensive undertaking

Building a geothermal power plant is an expensive undertaking. Its costs are estimated to be two to three times more than that of a coal power facility, according to Schneider. 

Volcanic areas are ideal sites for
geothermal energy plants

In addition to costs, Indonesia's excessive bureaucracy, tough regulations and strict government price controls add to the challenges. So the country, concedes Schneider, "has a bit of a problem at the moment."

Most of the geothermal power plants in operation in Indonesia today are run by the state-owned natural gas and oil company PT Pertamina.

But in a move to tap into the country's vast geothermal reserves, the Indonesian government has opened the doors to foreign investment and know-how.

German money and know-how

Today, Germany is one of the biggest supporters, together with Japan, Australia and the US. The German government has earmarked 300 million euros in aid. 

Although Germany is not a "volcanic country," it has extensive geothermal expertise, admits Professor Ernst Huenges from the German Research Center for Geosciences in Potsdam.

"Currently in Indonesia, only geothermal steam is used," he says. "In Germany, by comparison, we're also able to utilize the energy from hot water" to significantly increase power production "by as much as 60 gigawatts."

'Demanding target'

Potential business opportunities also exist for German companies, points out KfW's Schneider. "Building power plants, with all the electronics and other technical equipment involved, is certainly of interest to German businesses," he says.

Merkel and Yudhoyono have agreed to collaborate in increasing Indonesia's share of renewable energies to 25 percent by 2015.

Schneider calls the target "utopian." Merkel, on the other hand, prefers more diplomatic language, referring to the agreement as a "demanding target," which Germany can help Indonesia achieve.

Few will disagree, however, that there is plenty of work to be done - and some risk involved - if Indonesia wants to tap its vast reservoirs of geothermal energy deep down.

Author: Monika Griebeler / jrb

Editor: Sarah Berning

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Geothermal Power Could Help Bridge Indonesia's Energy Gap: WWF

Geothermal Power Could Help Bridge Indonesia's Energy Gap: WWF

Jakarta Globe, Fidelis E. Satriastanti,  July 06, 2012

An employee of Indonesia Power walks near a thermal pipe at Kamojang
 geothermal power plant near Garut, in Indonesia's West Java province in this
 file photo. Indonesia invested in green energy like geothermal power at a greater
rate than G20 countries like the United States, India and Japan. (Reuters Photo)      

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WWF Indonesia launched a report on Thursday which mapped out the country’s geothermal resources in a bid to promote the use of alternative energy sources.

The report, titled “Igniting the Ring of Fire: A Vision to Develop Indonesia’s Geothermal Power,” said Indonesia had the world’s biggest geothermal potential as the country sat on the world’s most active volcanic belt, the Ring of Fire, which frames the Pacific Ocean.

There could be up to 29 gigawatts of electricity produced if Indonesia was into tap all of its geothermal resources, the report said.

That is more than enough energy to fulfil the needs of two of Indonesia’s most populated islands, Java and Bali, where demand peaked in April at 20.1 gigawatts.

Currently, Indonesia only uses 1.2 gigawatts of geothermal power, the environment group said.

“The WWF, globally, has launched a mission of 100 percent renewable energy by 2050. It is an ambitious mission but hopefully serves as an inspiration. [The] Ring of Fire [project] wants [to accomplish] that mission,” WWF project coordinator Indra Sari Wardhani said.

Indra said that Indonesia must harness geothermal energy by not overlooking environmental, social and economic impacts as well as the capacity of the regional administrations and local residents.

“Challenges for developing geothermal [power] start with regulation and governance. In terms of regulation, there is an overlap between geothermal areas and forest areas,” the WWF coordinator said. “Ways need to be found so forest conservation is not sacrificed. There needs to be best practices [of geothermal harvesting] which can serve as benchmarks.”

The government has said it wants 25 percent of power used in the country to come from renewable energy sources and a 25 percent drop in carbon emissions by 2025. But the WWF said Indonesia could exceed that by harnessing geothermal energy, which now only contributes 1 percent of the country’s energy needs.

Last month, Energy Minister Jero Wacik said the government planned to directly award more concessions to companies to speed up the sector’s development.

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Indonesia pursues wind power

Indonesia pursues wind power

UPI, July 5, 2012

UPI File Photo/Pat Benic

JAKARTA, July 5 (UPI) -- Indonesia is investing in wind power to cut its import bills of fossil fuels.

State utility Perusahaan Listrik Negara Director Nur Pamudji said his company is eager to see the country's second large-scale wind farm begin operations by the end of 2013.

UPC Renewables Indonesia and Binatek Reka Energi are constructing the $100 million, 50-megawatt wind farm off the coast of Samas in Yogyakarta, which will house 16 to 33 turbines.

Pamudji said, "This will be Indonesia's second wind farm after the one in Sukabumi. It will be the largest. UPC Renewables will study the investment plan and come up with a price. Then we will sign power-purchase agreement," the Jakarta Globe reported Wednesday.

Pamudji added PLN is interested in purchasing electricity from the UPC Renewables Samas wind farm because it would save billions of dollars that would otherwise be spent on costlier fuel imports.

Binatek Reka Energi Director Erwin Jahja said, "This wind power project is safe for the community and will help Indonesia achieve its target for the use of clean energy."

Homegrown Electric Car Can Go the Distance: Govt

Jakarta Globe, June 24, 2012

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Indonesian scientists have unveiled an electric car that they claim can travel 150 kilometers on a single charge, further than most electric city cars available today.

Two prototypes of the car were rolled out on Thursday at the National Monument (Monas) Park in Central Jakarta by researchers from the Agency for the Assessment and Application of Technology (BPPT) and the Indonesian Institute of Sciences (LIPI).

“This car is fueled entirely by electricity and is not a hybrid vehicle,” said Agus Hoetman, an adviser to Research and Technology Minister Gusti Muhammad Hatta.

“We are currently testing it for urban use,” he said, adding that the car was particularly suited for the stop-start driving pattern in a congested city environment.

“This car saves energy because there are no parts in the engine that need to keep moving when the car is stationary during a traffic jam. That’s different from gasoline-fueled cars,” he said.

Agus said the car had a range of up to 150 kilometers on a single charge, further than the 60-145 kilometers currently available from electric cars with a top speed of less than 100 kilometers an hour.

He said that in a recent test, the researchers almost managed to complete a round trip from Jakarta to Bandung on a single charge. The distance each way is about 130 kilometers.

Hatta previously said the government was earmarking Rp 100 billion ($10.6 million) for the development of an Indonesian-built electric car by four state universities. He said the universities were expected to present their designs soon, before production could begin sometime in 2014.

The minister also said that LIPI had been allocated Rp 1.2 trillion to develop an electric minibus capable of carrying up to 16 passengers.

Antara

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Japan seeks to increase geothermal cooperation with Indonesia

Antara News, Fri, June 22 2012 

Photo document of Indonesia geothermal operating by PT Pertamina
 Geothermal Energy (PGE) in Kamojang, Bandung, West Java.
(ANTARA/Ujang Zaelani)

  

Jakarta (ANTARA News) - Japan is seeking to increase its cooperation with Indonesia in the field of geothermal energy development as part of efforts to find energy sources to meet its needs.

"Japan has expressed its commitment to helping in cooperation in the field of geothermal energy development here," vice presidential spokesman Yopie Hidayat told newsmen here on Friday.

He made the statement after Vice President Boediono received the governor of Japan Bank for International Cooperation (JBIC), Hiroshi Okuda, and Japanese ambassador Yoshinori Katori.

He said the two countries could cooperate to develop geothermal and hydro-energy sources, noting the similarities in natural conditions in the two countries.

"Japan has used geothermal and hydro-energy sources to generate electricity. Japan wishes to be involved in the development of the energy resources in Indonesia," he said.

He said Vice President Boediono welcomed the JBIC`s request, saying the Indonesian government is prioritizing environmental-friendly power plant development.

Out of the country`s second phase of the 10,000 MW development project, 4,000 MW would come from geothermal sources. "It would be very good if JBIC would participate and support it," he said, quoting the vice president.

Besides power plant development, the vice president also explained about the basic development projects such as infrastructure, energy and non-infrastructure projects which are still widely needed in the country.

JBIC, Yopie said, has participated in the development of a coal-fired power plant in Central Java.

"The project is the first funded by JBIC outside Japan. Although it uses coal as its energy source, its use is very efficient, so that the plant remains environmental-friendly," he said.

During the meeting, which lasted for about 30 minutes, Okuda has also spoken of the law on minerals and coal mining that imposes tax on exports of raw materials.

"He understands that the law is aimed at developing coal and other mineral processing industries in the country. We support and are ready to be involved in the development of smelters in Indonesia," Yopie said.

Editor: Priyambodo RH

British Petroleum to develop geothermal energy in indonesia: president

Antara News, Sat, May 26 2012

Yogyakarta (ANTARA News) - British Petroleum has agreed to participate in the development of geothermal energy in Indonesia, President Susilo Bambang Yudhoyono said here on Friday.

"BP in talks just now agreed to participate in the development of geothermal energy in Indonesia thus to increase our power capacity," he said at a press conference.

President Yudhoyono said the agreement was the result of his talks with BP CEO Bob Dudley at Gedung Agung.

He said so far geothermal energy in the country has not yet been exploited well despite the fact that the country has the world`s biggest reserves.

He said the energy source has not yet been developed well due to investment challenges.

He said although incentives had been given the sector has not developed well. He said the oil subsidy had also made the price of geothermal energy not competitive yet.

The President reiterated that geothermal energy is one of the future environmental friendly renewable energy sources.

President Yudhoyono on the occasion also expressed appreciation to BP that has agreed to transfer 230 cubic feet of gas per day from its Tangguh field in Papua to domestic industries. The gas from the field had so far been exported.

President Yudhoyono said the agreement would support the economic development especially domestic industrial development.

He said the government in the future must make efforts to re-negotiate its working contracts so that the gas produced by fields in the country could be sold to the domestic market.

"In view of our economic challenges the government had actually conducted re-negotiations to make the gas produced in Indonesia not to be totally sold abroad which is certainly not fair and correct," he said.

He said however the government would always respect the contracts that have been signed. "I honor the contracts but I also appeal to investors, business leaders in Indonesia to understand the situation in Indonesia. If the contracts are considered not right and not quite fair we, with a good will, wish to improve them and renew them," he said.

Editor: Aditia Maruli