To attract investors to Indonesian geothermal development, the government has finally raised the feed-in-tariff for geothermal power plants to between $0.10-0.17 per kilowatt-hour (kWh) from the current level at $0.097/ kWh.
Reported this morning from Jakarta, Indonesia, the Indonesian government has “finally raised the feed-in-tariff for geothermal power plants to between $0.10-0.17 per kilowatt-hour (kWh) from the current level at $0.097/ kWh”. This is done to attract investors to the Indonesian market for the development of the country’s ambitious geothermal development program.
In a statement the Minister for Energy and Mineral Resources of the country, Jero Wacik, said “If we set [the geothermal price] at only 9 cents it means the price is only one-fifth to the price of electricity from fuel-fired energy”. The current price for fuel-fired power plants is between $0.35-0.45/ kWh.
“The new prices will vary from region to region, where the power plants are located. For example, the price in Sumatra would be 10 cents, Java would be 11 cents, while Papua 17 cents,” he said.
He said the government would also offer other incentives for investors such as tax holidays during their exploration activities.
The government also continues to state its ambitious goal of adding 4,000 to 5,000 MW of geothermal power generation capacity between 2014 and 2015. But – as said diplomatically by Germany’s chancelor Angela Merkel on a recent visit to Indonesia – this is a rather “demanding” target. Others call it utopian.
The price set now is – so the Minister – not negotiable, as it would create a too long process.
The new feed-in-tariff would only apply to new projects or extension contracts between IPPs and the government owned utility PLN. There is the the possibility to revise existing pricing through negotiations.
“PLN president director Nur Pamudji said that the PLN would abide to the new pricing regulation even though it would slightly increase the PLN’s costs in fulfilling the country’s electricity needs.”
Source: The Jakarta Post