Govt may provide subsidy to geothermal power plants

The government may provide a subsidy to encourage the construction of more geothermal power plants so that the operation of diesel oil-fired power plants could be reduced, Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said.

Speaking at a seminar on the use of geothermal in the country's power production in Jakarta Tuesday, the minister, however, said that before the government decided to provide the subsidy, there should be a pilot project to ensure that the operation of geothermal power plants was really less costly than those of diesel oil-fired power plants.

"The pilot project for this purpose can be carried out at the Sarulla geothermal power plant in North Sumatra and the Lahendong geothermal power plant in North Sulawesi," he said.

The minister said that if the use of geothermal power plants could really reduce the use of diesel oil, the selling price of geothermal power which reached about 5 U.S. cent per kilowatt hour (kwH) at present could be increased in order to encourage more investors to build geothermal power plants in the country.

He, however, said that the subsidy would be given only if the fall in the government's spending from the operation of diesel oil-fired power plants would be higher than the subsidy to be given to the developer of geothermal power plants. (*)