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Jakarta Post

A feed-in rate, geothermal power and how to finance it

  • Montty Girianna

PREMIUM
Jakarta   /   Mon, August 27 2012   /  05:00 am

To accelerate geothermal electricity generation, the government is considering implementing a feed-in rate. The current rate charged for geothermal power has been deemed too low and does not justify field development. Proposed prices are non-negotiable, at 10 to 14 US cents per kilowatt hour (kWh) ,depending on where a power plant is located.

Applied only to new projects or to the extension of IPP contracts, this rate is expected to push investment and support an ambitious goal of adding 4,000 Megawatts (MW) of geothermal power generation capacity by 2015.

The proposed rates are of significant importance for the national economy, without a doubt. It certainly would reduce subsidies for electricity. A feed-in rate would allow for the reallocation of price-volatile fossil fuels, such as diesel and coal, that otherwise would have been needed for electricity generation.