Govt asked to involve in determining prices of geothermal power plant
Thursday, April 30 2009 - 02:43 AM WIB
Supramu Santosa, a senior member of the association, said in Jakarta on Wednesday that at present the price of geothermal power was determined through business to business negotiations with state-owned electricity company PT Perusahaan Listrik Negera (PLN).
He said that ideal price of the electricity produced by geothermal power plant should be at least 9 US cent per kWh, much higher than those offered by coal-fired power plants.
?PLN considers the price is still too high. As a result, it turns to other sources of energy to get cheaper prices,? he added. Supramu said that the government should get involved in negotiation process so that geothermal power producers will be able to get fair price for their electricity.
Director General of Electricity and Energy Utilization J. Purwono said the business-to-business mechanism was still determining prices for geothermal power.
"The selling price of power (by PLN) to the public is different from the purchasing price of power (by PLN) from power producers. The government can still play subsidy and electricity base rate instruments (to ensure the public get power at lower price despite the high price paid by PLN to producers)," Purnowo said.
Meanwhile, Murtaqi Syamsuddin, PLN?s director for Java and Bali, said that the company would set a team to establish the fair price for the geothermal power. According to him, the ideal price should be able to encourage the development of geothermal power plants but at the same time would not hurt PLN?s operations.
Under the Ministerial Decree No. 5/2009, the government allows PLN to set power purchasing price based on business-to-busines negotation with producers. The government would not get involved in setting the purchasing price of power by PLN from producers on the grounds the economic growth is dynamic. (bernard)