PLN to sign purchase deal with 2 geothermal power producers

State electricity company PT PLN said it will in the immediate future sign power purchase agreement (PPA) with two independent power producers (IPPs) as an effort to speed up the construction of the geothermal power plants, said Mochammad Sofyan, Division Head for Renewable Energy at PLN.

The geothermal power plants are PLTP Muara Laboh with capacity of 2x110 megawatt in West Sumatera, developed by Supreme Energy at a price of US$0.094 per kWh and PLTP Rajabasa in Lampung also developed by Supreme Energy at a price of $0.095 per kWh.

?The closest deal to be signed is PLTP Muaralaboh and PLTP Rajabasa. God willing they (PPAs) will be signed by the end of this year,? he said.

President Director of Supreme Energy, Supramu Santoso, said earlier that the company is waiting for the signing of the PPA before going ahead with the development of the geothermal power plants. He expects the guarantee, recently issued by the government, will help the company in realizing the geothermal power projects.

Supreme Energy has said it plans to start drilling activities at Muara Laboh geothermal power plant in May next year, assuming the PPA is signed this year. The company expects to finish construction the Muara Laboh geothermal power plant facilities in 2015/2016.

The exploration cost for the Muara Laboh project alone is estimated to reach between US$70-100 millions, which will be funded from internal cash source.

Supreme Energy teams up with Japan's Sumitomo Corp and International Power Plc - GDF Suez, in developing the Muara Laboh project and teams up with Japan's Marubeni Corp in developing the Rajabasa geothermal project. (bernard/roffie)