Govt to revise pricing formula for geothermal power

The energy and mineral resources ministry will soon revise the pricing formula for electricity generated from geothermal power plants to ensure that power plants with small capacity would not suffer financial losses, Kontan daily reported on Wednesday.

Rida Mulyana, the director general for renewable energy, said in Jakarta on Tuesday that the revision of the pricing formula was intended to speed up the development of the geothermal power generation in the country. ?The pricing formula is now under revision." he said.

According to the existing regulation, the prices of geothermal power sold to state owned electricity company range between $0.18 and $0.10 depending in the location of the geothermal power plants.

Rida said that the pricing formula needed to be revised so that the development of geothermal power plants with small capacity would be economically viable to investors. ?In the new tariff formula, the price for small geothermal plants will be higher than for those for big geothermal plants,? he added.

According to him, the revision would be made due to complaints from owners of small geothermal power plants, who said the existing price is still too low to enable them to reach break-event point. (*)