Govt aims to increase geothermal power capacity to 7100 MW

The government targets to increase the installed capacity of geothermal power plant in Indonesia to 7100 MW in 2025 from around 1400 MW at present, the Directorate General of New Renewable and Energy Conservation (EBTKE) at the Ministry of Energy and Mineral Resources said in a statement on Friday.

In line with the plan, the ministry has designated 27 new geothermal working areas, including two, called Gunung Lawu and Danau Ranu, which have been auctioned, and three, called Marana, Way Ratai and Bukit Kili Gunung Talang, which were scheduled to be auctioned this month. The result of the auction of the three working areas will be announced in February next year, Geothermal Director at EBTKE Yunus Saefulhak said in the statement.

The rest of the working areas will be put into tender in phases over the next two years, he said.

Yunus said the winners of the tenders will be decided based on the exploration commitment and work management of the bidders rather than their offered price. Investors who offer the largest exploration commitment have the biggest chance to win and they will sign Power Purchasing Agreement (PPA) with state owned electricity firm PT Perusahaan Listrik Negara (PLN) after gaining results from exploration.

The price of the geothermal power will be determined based on the feed-in tariff (FIT) set by the government and the price will become clear after the exploration and feasibility study have been completed, he said.

In the past, the winners of geothermal contract tender are decided based on the price offered by the bidders. The tender winners were bidders that offer the lowest prices for their future geothermal power. As it turned out, many of them however have no skill or enough financing to carry out exploration.

Editing by Johannes Simbolon