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Geothermal projects need investors
The government is to auction off geothermal resources in Ngebel, Ponorogo, and Ijen, Banyuwangi, to help defuse the power crisis in Java and Bali, an official says
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The government is to auction off geothermal resources in Ngebel, Ponorogo, and Ijen, Banyuwangi, to help defuse the power crisis in Java and Bali, an official says.
The total capacity of the two sites is more than 400 Megawatts (MW).
Head of the provincial energy and mineral resources agency, Tutut Herawati, said the government was preparing a joint team from the central government, provincial and regency administrations to open a tender for the two geothermal projects.
"The joint committee will offer US$3 million per kilowatt hour and will select three winners for each project," Tutut said Thursday.
The first winner will be required to pay $10 million in advance as a guarantee and to start operations within six months.
"If it fails to fulfill this condition, the project will be granted to the second winner," she said.
The geothermal resource in the Blawan-Ijen area, recently declared a mining site, is located on the border of Banyuwangi and Bondowoso and has a capacity of 185 MW.
The resource in the Ngebel-Wilis area, on the border of Ponorogo and Madiun, has a capacity of 120 MW and is under regulation in a bylaw issued by the provincial government last month.
"Local and foreign investors exploring the resources are also required to supply their power production to the Java-Bali grid through state-owned electricity company PT PLN," she said.
Tutut said the province had a further nine geothermal deposits that would be offered to investors in the future.
The nine, located in Madiun, Mojokerto, Probolinggo, Pacitan, Malang and Sumenep, have a combined potential capacity of 580 MW.
Separately, the director general for coal and geothermal minerals at the Energy and Mineral Resources Ministry, Bambang Setiawan, said the government would continue mining the renewable and environmentally friendly geothermal energy to help defuse the decade-long national power shortage.
"The government will not impose taxes on the imports of any materials for geothermal exploration as incentives for investors to produce the energy," he said.
He said Indonesia had 40 percent of the world's geothermal potentials, which could produce a total of 27,510 MW, equivalent to 219 billion barrels of crude oil.
"The government will also explore the geothermal energy in Seulawah and Jaboi (Aceh), Jailolo (North Maluku), Ungaran (Central Java), Mt. Tapomas, Tangkuban Perahu and Cisolok (West Java), and Sokoria (East Nusa Tenggara)," he said.
The demand for power in Java and Bali had reached 3,500 MW by November 2008. Businesses and industrial operations in the region are still on the waiting list for the supply of 900 mega volt ampere (MVA) from PLN.
The Java-Bali grid is still running short of the increasing demand by up to 250 MW.
Spokesman for PLN's East Java distributors, Agus Widayanto, said the company would be able to meet increasing demand after the power plant project, with a total capacity of 10,000 MW, was completed by the end of 2009. (sal)
