PLN opens option for renegotiation of geothermal power price

State-owned electricity company PT. PLN is providing possibility for eight geothermal power plant developers to seek for upward adjustment in the price of electricity they produced as long as they meet the requirements, reports said on Thursday.

PLN President Director Nur Pamudji was quoted as saying by Bisnis Indonesia and Investor Daily that this was made possible following the issuance of Minister of Energy and Mineral Resources Regulation (MEMR) No 17/2014 in a bid to accelerate investment in the geothermal sector.

One of the requirements to seek for upward adjustment in the price of electricity to be sold to PLN is that the geothermal power plant developers must have already signed power purchase agreement (PPA) with the state utility before end of August of this year.

Nur said there were eight geothermal power plant projects which have signed the PPA with PLN on August 29 including 2x55MW Tangkuban Perahu I (Bandung), 1x55 MW PLTP Guci (Pemalang), 1x45 MW Cisolok Cisukarame (Sukabumi), 2x110 MW PLTP Baturaden (Banyumas), 1x40 MW PLTP Tampomas, 3x55 PLPT Ngebel (Madiun), 1x110 PLTP Rawa Dano (Serang), and 3x80 PLTP Sorik Merapi (Mandailing Natal).

Another condition, according to Nur Pamudji, is that the geothermal power plant developers must already completed exploration program at their respective geothermal areas, and can prove that the drilling cost is higher than what has been initially projected to be eligible to get the tariff adjustment.

He added that the Supreme Audit Agency (BPK) will make an audit into the drilling cost estimate made by the geothermal power plant developers.

According to the MEMR Regulation No 14/2014, the electricity tariff from geothermal power plants can be adjusted to between 11.8 US cents per Kwh-29.6 US cents per Kwh, depending on the location and date of the commercial operation of the plants.

In comparison, the existing tariff range is between 10-18.5 US cents per Kwh. (*)