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T Supreme Energy Rantau Dedap (SERD), which is developing a geothermal power plant in South Sumatra, started drilling its first well in Tunggal Bute village, Muara Enim, on Monday.

SERD business relations manager Ismoyo Argo said it would take three to three and a half years to build the geothermal power plant.

'€œOur target is that we will be able to test the well by September,'€ Ismoyo said, adding that the potential capacity of the wells would only be known after testing.

SERD, a consortium consisting of PT Supreme Energy, GDF Suez and Marubeni Corporation, has planned to drill five 2,400-meter-deep wells, the drilling of which will take 45 days each.

The geothermal wells themselves are expected to start operating in 2018. They are expected to power two plants, each producing 110 megawatts (MW) to overcome an electricity shortage in the province.

Rantau Dedap geothermal area is one of three blocks in Sumatra managed by Supreme Energy Rantau Dedap. The other two blocks are in Muara Laboh, West Sumatra, which has gone through well testing, and Rajabasa in South Lampung, which is still waiting on a permit from the Forestry Ministry over land use.

In the Rantau Dedap power plant project, the consortium is investing around US$3 million to $4 million per megawatt, making the total investment up to $700 million.

'€œAlmost 50 percent of the investment will be spent on the power plants,'€ said SERD president commissioner Supramu Santosa.

The electricity that will be generated by Rantau Dedap power plant will be sold to state-owned electric company PT PLN for 8.86 US cents per kilowatt hour (kWh) under a 35-year contract.

Meanwhile, the electricity generated by power plants in Muara Laboh and Rajabasa will be sold for 9.4 and 9.5 US cents per kWh, respectively.

These geothermal power plants are the second stage of the 10,000 MW power plant acceleration (or fast-track) program launched by PLN in 2006.

Indonesia has the world'€™s largest geothermal potential with 29,000 MW, which is 40 percent of the world'€™s total potential, scattered across 276 locations. So far, however, only 1,336 MW, or four percent, has been utilized.

As of now, most power plants in Indonesia are coal-fired, accounting for 14,446 MW or 43.9 percent of electricity production nationwide.

Combined gas and steam power plants generate 8,814 MW (26.8 percent), hydro power plants produce 3,516 MW (10.7 percent), diesel-fired power plants generate 2,599 MW (7.9 percent) and gas-fired power plants produce 2,973 MW (9 percent).

Geothermal power plants produce 1,336 MW or 1 percent of the nation'€™s electricity power production.

Tisnaldi, director for geothermal at the Energy and Mineral Resource Ministry, said the Rantau Dedap power plant would be the world'€™s largest geothermal plant. '€œIts [electric power] potential reaches 600 MW,'€ he said. (dwa)