Star Energy to Push PLN for Big Hike in Price of Geothermal Energy

By webadmin on 06:55 pm Sep 15, 2009
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Reva Sasistiya

Geothermal power producer PT Star Energy hopes to negotiate a price increase of up to 60 percent for the energy it will provide to state electrical utility PT Perusahaan Listrik Negara from two new planned generators at its Wayang Windu plant in West Java.

Sanusi Satar, Star Energy’s vice president for public relations, said on Monday that the company would seek an increase from the 4.94 cents per kilowatt-hour to between 7 cents and 8 cents.

The previously agreed price would not be enough to cover costs, Sanusi said. “Although the power-sales agreement has been signed, we hope PLN will agree to revise it,” he said. “We are using the current geothermal power-sales benchmark that had been agreed to by PLN and geothermal producers, which averages 7.5 cents a kilowatt-hour.”

PLN had said last month that it would raise the ceiling on the price it would pay for electricity from privately owned geothermal plants. It later indicated it would pay 6.5 cents to 7 cents per kilowatt-hour.

Wayang Windu, the country’s biggest geothermal power station, has two generators with a total capacity of 280 megawatts. The plant’s capacity will rise to 400 MW following construction of the third and fourth generators, at a cost of $400 million, as part of the second phase of the government’s “fast track” program. The third and fourth generators are e x pected to be ope r ational by 2012.

The plant is located in Pengalengan, 40 kilometers from Bandung, West Java. It was jointly developed by Star Energy and PT Pertamina Geothermal Energy, a subsidiary of state oil and gas giant PT Pertamina.

The consortium and PLN signed an agreement in 2006 calling for the development of 400 MW of generating capacity, with each generating unit to be operated for up to 30 years.

Indonesia is home to one of the world’s largest reserves of geothermal energy, an estimated 27,140 MW. However, according to data from the Ministry of Energy and Mineral Resources, only 1,189 MW of generating capacity has been installed. The government is aiming to install an additional 9,500 MW by 2025.