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Sarulla geothermal electricity price agreed
After a long process of negotiations, state power firm PT PLN and a consortium developing the Sarulla geothermal power plant in North Sumatra finally agreed on the project’s electricity price at 6
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fter a long process of negotiations, state power firm PT PLN and a consortium developing the Sarulla geothermal power plant in North Sumatra finally agreed on the project’s electricity price at 6.79 US cents per kilowatt hour (kWh).
“Finally, we signed the PPA [Power Purchase Agreement] on April 1. The consortium agreed with the price offered by PLN which is 6.79 US cents per kWh,” PLN’s director Dahlan Iskan told reporters Thursday. “The contract is made for 30 years,” Dahlan said.
The price represents the amount to be paid by PLN to the consortium per kWh of electricity. The current average price of geothermal electricity sold to PLN is at about 7 US cents, chairman of the Indonesian Geothermal Association (API) Suryadarma said.
A regulation issued by the Energy and Mineral Resources Ministry stipulates that the maximum price for geothermal electricity sold to PLN is at 9.7 US cents per kWh.
Murtaqi Syamsuddin, a business and risk management director at PLN, said the agreed price would still need to be verified by the Development Finance Comptroller (BPKP).
The Sarulla geothermal power plant will have a capacity of 3x110 megawatts (MW). The consortium includes PT Medco Energi Internasional which owns 37.25 percent of the project; US-based company Ormat Technologies owns 12.75 percent; and two Japanese companies own the rest, Itochu (25 percent) and Kyushu Electric (25 percent).
Medco won the Sarulla geothermal concession in 2006, but field development and power plant construction has yet to be started due to disagreements on the PPA price.
With the signing of the PPA, Dahlan said that the project was expected to be on stream in 2012.
The Sarulla geothermal project will require about US$600 million in investment. The project is one several private power plants under the second 10,000 MW program with PPAs being negotiated with PLN.
PLN had also reached agreements on electricity tariffs with four other private power plants — the Tawaeli power plant in Central Sulawesi; the Tanjung Pinang power plant in Riau Islands; the Embalut power plant in East Kalimantan and the Banjarsari power plant in South Sumatra.
