Ceiling price for geothermal power set at 9.7 cents/Kwh

The Ministry of Energy and Mineral Resources has set a ceiling price of 9.7 US cents/Kwh for the purchase of geothermal power by state owned electricity firm PT Perusahaan Listrik Negara (PLN) from private producers.

The ceiling price was stipulated in a ministerial decree No.32/2009.

"The ministerial decree was signed by the minister (Darwin Zahedy Saleh) last week," the ministry's Geology Body head R. Sukhyar said on Monday.

The decree also rules that PLN is obliged to buy any geothermal power produced in the country.

The decree takes effect retroactively, meaning it will be used as a reference not only for future geothermal power projects but also the previous ones.

Sukhyar said he was optimistic that the interest of investors in developing geothermal power in Indonesia will increase as a result of the ministerial decree.

Suryadharma, the head of the Indonesian Geothermal Association, welcome the issuance of the decree, saying it would allow investors to better calculate their production costs and the price of their power.

"Many investors from Japan, Germany and America are willing to invest in Indonesia. They were awaiting the decree," Suryadharma said. (bernard)