Geothermal energy developers asked to set aside exploration funds
Saturday, July 28 2012 - 04:07 AM WIB
Director General for New, Renewable and Energy Conservation at the energy ministry, Kardaya Warnika, said on Friday that the exploration funds and the commitment to finish their projects on schedule were the main requirements imposed on developers to be able to take the advantage of the new geothermal power price increase.
?Only if they meet the two requirements, they will be able to sign a power purchase agreement with PLN,? he said as quoted by Kompas daily. The exploration funds deposit and the commitment would be included in the power purchase agreement, he added.
If they were not able to meet such requirements, they may lose their contracts, he said.
The government announced recently an increase in the geothermal power prices to between 10 and 17 cent US dollar from 9.7 cent US dollar in order to lure more investors to develop geothermal energy in the country.
Kardaya said that as many as 16 geothermal projects have been awarded to investors, but none of them has signed power purchase agreement with PLN yet.
The Head of Indonesia?s Geothermal Developers Association, Abadi Poernomo, welcomed the government?s decision to raise electricity tariff purchase from geothermal power plants. ?If the electricity tariff (produced by geothermal power plants) is commercially viable, geothermal developers would take risks to conduct exploration and making it easier for them to get funding,? Abadi said.
However, he said that his association opposed the government?s plan to mandate geothermal energy developers to put exploration funds in banks. ?It requires about US$7-8 million to drill one well. If those funds are deposited in banks, that could disrupt our operational activities,? he said. (*)