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Nearly a
decade after government set the rules for geothermal energy, a developer on
Friday undertook the first exploration drilling for the much-vaunted resource
that could help power the nation.
Supreme
Energy Muara Laboh has started drilling at its working area in South Solok,
West Sumatra. The activity is expected to take up to nine months to complete,
and will be followed by the construction of a 220 megawatt geothermal power
plant should the exploration be successful.
The
geothermal energy director at the Energy and Mineral Resources Ministry,
Tisnaldi, hailed the project as an historical landmark because it was the first
such activity conducted since the government issued the Law on Geothermal
Energy in 2003. He added that it was one of the largest energy projects in
Sumatra.
“Geothermal
projects are crucial in order to make our energy more environmentally friendly
in the future, especially considering that our oil, gas and coal resources are
in decline,” Tisnaldi said.
If the
power plant goes ahead, the project is estimated to cost Rp 7 trillion ($722
million), according to a company statement received on Sunday. “The power plant
construction will start in 2014 and is expected to begin commercial operation
in 2016,” the statement said.
The
electricity generated from the power plant will be dispatched to state utility
Perusahaan Listrik Negara’s power grid based on a 30-year power purchase
agreement, it said.
Surpeme
Energy Muara Laboh is jointly controlled by local company Supreme Energy,
France-based International Power-GDF Suez and Japanese firm Sumitomo
Corporation.
This
project is a part of phase II of a government program to add 10,000 megawatts
in generating capacity across the country. While phase I consisted largely of
new coal-fired power plants, phase II concentrates on renewable energy.
By 2025,
the government expects the portion of electricity generated from renewable
energies to reach 17 percent, while diesel fuel will stand at 20 percent, gas
at 30 percent and coal at 33 percent.
At present,
5.7 percent of electricity is from renewable sources, 24.5 percent is from coal
and 20.1 percent from gas.
To
encourage investment, the government this month raised the price floor for
renewable energy.
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