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T Prima Layanan Nasional Enjiniring (PLNE), a subsidiary of state-owned electricity company PT PLN, is set to pioneer the construction of a 10 megawatt (MW) biomass-fueled power plant (PLTBm)

Located in Morowali regency, Central Sulawesi, the power plant will be developed in cooperation with the Indonesian Chamber of Commerce and Industry (Kadin).

The PLTBm will be the first in the country'€™s eastern region and is estimated to cost Rp 3 million per kilowatt (kW), bringing the total value to around Rp 30 billion (US$ 2.56 million).

The cooperation was inked on Monday through the signing of a memorandum of understanding (MoU) between PLNE, Kadin'€™s eastern Indonesia chapter and the Morowali regency administration.

'€œThere have actually been a lot of offers to build various power plants, but I wasn'€™t interested. But then Kadin proposed building a biomass power plant that we thought made sense, as it would use trees that were also native to Morowali,'€ Morowali Regent Anwar Hafidz said on the sidelines of the MoU signing in South Jakarta.

Anwar said that the construction of the PLTBm would be able to meet rising electricity demand from Morowali households and small industries, which currently stands at 5-6 MW. The regent has agreed to earmark 20,000 hectares of forest land for the 10 MW pilot project.

He said that biomass energy, or energy generated from the burning of high calorie biological materials such as wood, was expected to replace the diesel-powered power plants that were currently in use.

'€œWith the introduction of biomass [power plants], my hope is that our community will no longer experience complete darkness at night,'€ Anwar said. PLNE president director Zainal Abidin Sihite said the PLTBm would use the wood of native trees, such as calliandra and gliricidia, locally known as kaliandra merah and gamal, respectively.

Zainal said that his company would be conducting assessments on the financial and operational aspects of the project prior to construction, including adjusting the rates that PLN would use to buy back the power output.

'€œThere are financial and technological aspects to note. We'€™ll be taking measurements, as we are merely consultants in helping Kadin and the regent get this project running,'€ he told reporters on Monday.

Zaenal estimated that the construction of the plant could be completed in two years at the most, in addition to the due diligence period of six months.

Kadin'€™s chief working unit officer for the Eastern Indonesian special economic zone (KEK), Riza Suarga, said the PLTBm was a realistic alternative to coal-fueled power plants or hydro power plants, particularly in remote areas with available forested land.

'€œOur concept is realistic. Instead of building kilometers of pipelines for energy transmission, we can build [the power plant] on the spot,'€ Riza said.