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WIKA to build geothermal plant in W. Java

Feel the heat: The Gunung Salak geothermal power plant percolates near Bogor, West Java

The Jakarta Post
Jakarta
Mon, July 23, 2012

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WIKA to build geothermal plant in W. Java

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span class="inline inline-center">Feel the heat: The Gunung Salak geothermal power plant percolates near Bogor, West Java. State construction company PT Wijaya Karya (WIKA) said that its subsidiary would make good on plans to build a 40-MW geothermal power plant in West Java .(JP/R. Berto Wedhatama)

Publicly traded state construction company PT Wijaya Karya (WIKA) says it will proceed with a long delayed plan to build a 40-Megawatt (MW) geothermal power plant in West Java.

WIKA corporate secretary Natal Argawan said in Jakarta last week that the firm’s subsidiary Wijaya Karya Jabar Power secured a contract to build and operate a geothermal power plant in the Gunung Mas geothermal field in 2008, although project realization had been slow due to high financial risk.

“We are completing a seismic survey,” he told Kontan business daily.

Drilling would start as soon as the survey was completed, he added.

In the first phase of development, which was expected to begin early next year, the company would drill two of seven targeted wells, each for an estimated cost of US$5 million, according to Natal.

“Hopefully, the drilling process will be complete in 2013. We will continue by building the power plant in the next phase. We expect the plant to start operations in 2015,” Natal said in a telephone interview.

Wijaya Karya Jabar will spend about $150 million to build the plant and intends to sell the power produced to state electricity company PT Perusahaan Listrik Negara (PLN).

Wijaya Karya Jabar Power, which will build and operate the plant is 55 percent owned by WIKA, 40 percent owned by PT Jasa Sarana and 5 percent owned by PT Resources Jaya Tehnik Management Indonesia.

“Some financial institutions have shown interest in providing loans for the project, but they have not made any formal commitment. Bank Mandiri and HSBC are among those interested,” Wijaya Karya Jabar’s president director Elvis Nurhasral said.

There are also other foreign firms, such as Cobra Group from Spain and KfW Bankengruppe from Germany,” Elvis said.

According to Elvis, the firms were awaiting the results of the well tests before the would commit to signing any formal agreement.

“This is a long process,” he said.

Indonesia is home to 40 percent of the world’s geothermal reserves and has the potential to produce more than 27,000 MW of geothermal power, according to reports.

However, to date that nation has only been able to generate 1,341 MW of geothermal power, or only 4.6 percent of its total potential.

The geothermal power plant was not the only project that WIKA has in the development in the energy sector, Natal said.

WIKA also has plans to build a gas-fired power plant in Rawa Minyak, Riau, Natal said.

The project will start next month and the construction will last for about a year.

The plant, worth Rp 170 billion (US$17.94 million), is expected to start operating by the middle of 2013 and will produce 25 MW of electricity when fully operational.

The power plants developments in Gunung Tampomas and Rawa Minyak, when complete, will bring the total number of power plants operated by the firm to eight.

The company has worked on three diesel power plants in Bali with a total capacity of 54 MW, a 25-MW diesel power plant in Ambon, Maluku; a 60-MW diesel power plant in Palembang, South Sumatra; and a 20 MW gas-fired power plant in Riau.

The government has finally raised the feed-in-tariff for geothermal power plants to between 10 to 17 US cents per kilowatt-hour (kWh) from 9.7 cents per kWh to lure more investors enter the geothermal power business. (tas)

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