Govt plans extra price incentive for biomass power plants

The government plans to increase again the price of electricity purchased by state-owned power company PT PLN from biomass-based power plants from its current price of Rp 1,000 per Kwh as an incentive to lure more investment into the sector, Bisnis Indonesia reported on Friday.

The paper quoted Director General of New and Renewable Energy Rida Mulyana as saying that the additional price could reach up to Rp 400 per Kwh depending on the location of the power plant. The incentive will be greater in areas where the electricity production is highly dependent on petroleum fuel products.

Rida said that a Minister of Energy and Mineral Resources decree on the incentive is expected to be issued this month. Minister Jero in April raised the purchasing price of electricity produced from biomass power plants to Rp 1,000 from Rp 975 per Kwh to attract new investment.

The ministry has set a target to boost the capacity of electricity from biomass power plants by 800 MW from the current 1.2 MW given the country?s huge palm oil plantation industry. Indonesia is the largest producer of palm oil, where oil palm waste products are seen as good source of feedstock for biomass-based power plants. (*)