Business

Govt eyes decree to force
PLN to buy more geothermal
power

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.

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