Sipoholon Ria-Ria geothermal field will be retendered: Govt

The Sipoholon Ria-Ria geothermal field in North Sumatra will be re-auctioned because the price of electricity to be produced from the geothermal field offered by PT Medco Geothermal Indonesia as the main bidder during the first auction exceeded the maximum level set by the Ministry of Energy and Mineral Resources, a senior official at the ministry has said.

Sugiharto, the director for geothermal development at the ministry, said on Monday that the price demanded by Medco Geothermal for the sales of the electricity from the field reached 12 US cent per kWh, exceeding the maximum level of 9.7 US cent set by the ministry.

He said that the government would hire a private company to carry out a feasibility study to give potential bidders a more complete data on the geothermal potentials in the Sipaholon Ria-Ria field. ?The field will be re-tendered after the feasibility study has been completed,? Sugiharto said.

Meanwhile, the auction of the Arguna Werang geothermal field in East Java has been stopped due to uncertainty about the status of the field. According to the Energy and Mineral Resources Minister?s decree No. 2, 2010, the geothermal field should be developed by PLN. However, the East Java governor has insisted that the project should be offered to investors as an independent power producer (IPP). (bernard)