Indonesia to Form New Firm to Tap Geothermal Energy

PlanetArk 1 Feb 08;

JAKARTA - Indonesia plans to form a new state company to take over geothermal energy activities in the Southeast Asian country, an official at state oil company Pertamina said on Thursday.

Indonesia, dotted with hundreds of active and extinct volcanoes, has the potential to produce an estimated 27,000 megawatts (MW) of electricity from geothermal sources.

However, the vast potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.

Pertamina upstream director Sukusen Soemarinda said the government had decided Pertamina should hand over its geothermal energy activities to the new company.

"Pertamina should focus on oil and gas activities. Pertamina currently has 15 geothermal areas, some of them producing steam," he told reporters.

"Pertamina will handed over its geothermal areas to the new company once it is up and running," Soemarinda said, adding the new firm would be set up as soon as possible.

Energy Minister Purnomo Yusgiantoro has said Indonesia currently generates 850 MW electricity from geothermal energy, or about 3 percent of current production, and plans to increase that to 9,500 MW by 2025.

Chevron Geothermal Indonesia Ltd, a unit of Chevron Corp. has geothermal operations generating 636 MW in Indonesia.

A Chevron official said on Thursday the company was looking into expanding its geothermal capacity in the Southeast Asian country further.

Indonesia, Asia-Pacific's only OPEC member, is trying to tap alternative sources of energy to meet rising power demand and cut consumption of expensive crude oil as its own reserves dwindle.

(Reporting by Muklis Ali, editing by Ed Davies)