PGE moves closer to capacity target

Petromindo

PT Pertamina Geothermal Energy (PGE), a subsidiary of state-owned oil and gas company PT Pertamina, aims to secure an additional 85 MW in installed capacity from two facilities in Sumatra and Java as a part of its plan to manage 1,037 MW in installed capacity by 2021, The Jakarta Post reported on Monday.

PGE President Director Irfan Zainuddin was quoted by the paper as saying the company expected to gain an additional 55 MW in installed capacity from its geothermal power plant (PLTP) Ulubelu Unit 4 in Lampung, and another 30 MW from PLTP Karaha in West Java. ?With the additions, PGE?s installed capacity will stand at 617 MW by the end of 2017,? Irfan said recently.

PGE has 532 MW in installed capacity after the completion of a number of geothermal power plant projects last year.

The new plants, namely PLTP Lahendong Unit 5 and Unit 6 in North Sulawesi, and PLTP Ulubelu Unit 3, can generate up to 95MW.

PGE operates another power plant in Kamojang, West Java.

Irfan claimed that with the new projects? commercial operation date (COD) of March and May this year, PGE would be able to increase its production capacity to 4,026 gWh this year from 3,245 gWh in 2016.

Irfan said the company expected to attract US$398 million in investment throughout this year, with most expected to go to the establishment of new power plant units in Ulubelu and Karaha. This year?s investment figure, however, will likely be smaller than that in 2016, which stood at $596 million, he added.

?Last year was the peak of our projects. This year, we only have two projects expected to start the COD,? Irfan explained.

For this year, PGE aims to book $293 million in revenue and $86 million in net profit. The amount of targeted profit represents a 15 percent growth compared to the $75 million it secured in 2016.

Geothermal, created by the heat of the Earth, is able to generate consistent power while producing nearly no greenhouse gases, making it the perfect alternative to the widely abused fossil fuels.

Geothermal power is the second-largest renewable energy resource in Indonesia after hydropower and a clean alternative to coal-fired power generation. Some 30 million Indonesians ? or 12 percent of the population ? lack access to modern and reliable electricity The country?s geothermal sector has remained sluggish for decades despite massive potential reserves in almost 330 fields across the nation. Although the government estimates there are around 29 GW in geothermal potential, Indonesia has only procured around 1,500 MW from the renewable energy source ever since the first geothermal power plant was established in Garut, West Java, in 1982.

In an effort to stimulate growth in the sector, the government recently introduced a government regulation stipulating that fiscal and technical capabilities of firms wanting to take on Indonesia?s geothermal fields would be the main basis for picking tender winners, moving away from only choosing companies offering the lowest electricity rates.

A new government regulation has sparked some hope in the country?s sluggish geothermal sector by attempting to minimize the high risks investors take in exploring and exploiting Indonesia?s vast resources.

Indonesian Geothermal Association welcomed the move, saying this would help avoid losses caused by initial miscalculations that may lead to stagnancy in the development of certain fields.

?Previously, those who offered the lowest rates won the tenders. Under that mechanism, let?s say that a firm offers to develop a geothermal field for 11 US cents per kilowatt hour [kWh] based on estimates of 100 MW. However, after conducting surveys and explorations it finds out that there is only 30 MW. This means that its initial 11 cent price is invalid and the project becomes stagnant because the firm needs to cut its losses,? Abadi Poernomo, the association?s chairman, told The Jakarta Post recently. (*)