With an expanding population and a stated goal of adding roughly 60 gigawatts of power-generating capacity by the year 2022, the government of Indonesia has advanced multiple major power projects in recent months. While many of the projects are traditional coal-fired and gas-fired powerplants, the archipelago nation is looking to expand its renewables mix, with a heavy emphasis on geothermal power.
In an press conference on April 8, state-owned enterprises Minister Dahlan Iskan announced plans to build a 2,000-MW coal-fired powerplant in the capital, Jakarta, at a cost of roughly $1.8 billion. The project is expected to break ground in 2015 and have a four-year construction schedule.
This news comes on the heels of a financing deal announced on March 28 for a $1.17-billion, 330-MW geothermal powerplant to be constructed in Tapanuli Utara, North Sumatra. The PT Medco Sarulla geothermal plant will consist of three 110-MW generating facilities and be built by a corsortium of Indonesia-based energy firm Medco and Japanese-based Itochu Corp. and Kyushu Electric Power Corp.
Geothermal power equipment for the PT Medco Sarulla powerplant will come from Reno, Nev.-based Ormat Technologies, which will supply its Ormat Energy Converters under a contract worth $254 million. According to Ormat Technologies, construction of the geothermal powerplant is expected to begin in 2016, with an 18-month project schedule.
"We are pleased to achieve this significant milestone as scheduled and look forward to continue execution on this exciting new development," said Ormat Technologies CEO Dita Bronicki in a statement to the press. "We will continue the effort to close this financing and, ultimately, supply clean, reliable electricity to the Indonesian market."
Indonesia is the third-largest producer of geothermal power in the world, after the United States and the Philippines. Due to the nation's volcanic geology, Indonesia has an estimated 40% of the world's potential geothermal resources. In an effort to spur development in this power sector, the government recently has upped the price it will pay for geothermal power, raising the target range to between 11.5¢ and 29¢ per kilowatt hour from between 10¢ and 18.5¢ per kilowatt hour.
The Indonesian Energy and Resources Ministry announced on April 15 that it would be reintroducing auctions for potential geothermal-powerplant public-private partnerships and allow for contractors already building geothermal plants to renegotiate their contracts at the new, higher delivery price.