Geothermal development costs have increased in Indonesia with a development cost of each MW now being at $3.5-3.6 million, or an increase of 21 percent since 2007.
Recent price adjustment for electricity generated by geothermal, is aimed at making Indonesian geothermal development more attractive.
While the cost of development were between $2.9 million and $3.1 million in 2007, developers are now planning with $3.5 million to $3.6 million.
The prices have gone up due to inflation in Indonesia.
So internal rate, so the chairman of the Indonesian Geothermal Association, “has dropped from an ideal rate of 16 percent to between 10 and 11″ in recent years, making it harder to make projects economical for investors and developers given the risks involved in development of geothermal projects.
Source: The Jakarta Globe