The government will soon
issue a ministerial decree ordering state electricity company PT PLN to buy
power produced by geothermal power plants across the nation to reduce the
company's energy procurement costs amid surging global oil prices.
Energy and Mineral Resources
Ministry new and renewable energy and energy conservation director general
Luluk Sumiarso said the Office of the Coordinating Minister for the Economy,
the Finance Ministry, and the Office of Minister for State Enterprises and PLN
had green-lighted the decree.
“In a meeting on Wednesday,
we agreed to all clauses and we hope that the decree can be issued in the near
future,” he told reporters on the sidelines of a discussion on energy
conservation in Jakarta on Thursday.
He said the decree would
provide a detailed explanation on how PLN should buy power from geothermal
producers, including a clause ordering the company to refer to the reference
price of 9.7 US cent (around Rp 866) per kilowatt hour (kwh).
“If the price is below the
reference, PLN must accept it, but if it's higher, the company can have
business to business talks with geothermal producers,” Luluk said, adding that
this mechanism would not bring any harm to PLN.
The decree will pave the way
for the resumption of several geothermal projects that have been delayed for a
long time by disagreement over their proposed electricity prices.