Pertamina Geothermal Energy (PGE), a subsidiary of state energy holding company Pertamina, will miss its production and investment growth target this year due to lower electricity demand from state electricity firm PLN as their off-taker.

PGE president director Ali Mundakir said the company was expected to attain around 90 percent of its total investment target of US$277 million this year.

It will use the investment mainly for the drilling of wells and development of power plants.

“We have delayed two plans to drill new wells as we are waiting on [a positive result from] ongoing operations,” he told the press during a recent media visit to one of its geothermal power plant units called PLTP Kamojang in Garut, West Java.

The two drilling operations that were delayed are located in PGE’s Lahendong-Tompaso geothermal field in North Sulawesi.

“Drilling is costly as one well could cost us $7 million to $10 million,” Ali said.

As of September, the realization of PGE’s investment reached 80 percent of its total target or equivalent to around $221 million.

For its production target, Ali said the company would only book around 96 percent of its total target to generate 4,350 gigawatts hours (GWh) from five areas, namely Kamojang (235 megawatts), Lahendong (120 MW), Ulubelu (220 MW) and Karaha (30 MW).

PGE currently holds 34.4 percent of total RI installed capacity from geothermal energy at 1948.5 MW, making it the second biggest firm after local energy firm Star Energy in terms of installed capacity.

Aside from PLN’s lower electricity consumption, PGE’s inability to meet its production target was also caused by the delay in the operation of the PLTP Karaha power plant.

Latest data from PLN showed that electricity consumption in the first nine months of 2018 reached 71 percent or equivalent to 173 terrawatt hours (TWh) from a full year target of 239 TWh.

Previously, PLN lowered its electricity consumption growth target from 8.3 percent stated in the electricity procurement business plan (RUPTL) for the 2017 to 2026 period to only 6.86 percent in the RUPTL for the 2018 to 2027 period.

However, Ali said PGE was still on target to kick off several power plant projects, including a 55 MW power plant in Lumut Balai, South Sumatra, in December.

The two other projects in the pipeline are the 55 MW Hululais power plant in Bengkulu and the 2x55 MW Seulawah power plant in Aceh.

“The construction of Lumut Balai is already at 99 percent and the 1 percent is for testing the installed equipment. And then we are also awaiting for PLN [state electricity firm as the off-taker] to set up the network from and to the facilities,” he said.

As for exploration in its existing working areas, PGE is currently in the process of increasing its installed capacity in West Java by drilling new wells in Kamojang, which still has potential steam reserves equivalent to 65 MW.

“We found that Kamojang in West Java still has a lot of untapped reserves.

“Data shows that the area has potential reserves equivalent to 300 MW, but to date we only have installed 235 MW of electricity capacity,” Ali said.

The Energy and Mineral Resources Ministry’s director for geothermal, Ida Nuryatin, concurred that West Java had huge potential geothermal reserves.

“We have abundant geothermal energy potential in West Java compared to other regions,” she said, citing data from the ministry that showed that there were at least 34 undeveloped geothermal locations in the region.

The ministry’s data showed that West Java contributed 61 percent or 1,194 MW of installed capacity from geothermal energy from the total RI renewable energy capacity at 1,948 MW.