A global consortium led by Tata Power, India’s largest private power utility, bested seven other bidders, including Chevron and PT Medco Energy Internasional, for a 240-megawatt geothermal power project in Northern Sumatra, Indonesia.
The consortium PT Sorik Marapi Geothermal Power is made up of Tata Power and Australia’s Origin Energy Limited, which hold a 47.5 percent stake each, and Indonesia’s PT Supraco Energy, which has a 5 percent share.
The group estimated that the Sorik Marapi geothermal project can support the development of 200 MW to 300 MW of generation capacity.
The consortium will carry out a detailed exploration of the project site over the next 18 months before moving forward with construction. If the site is deemed feasible for geothermal energy development and appropriate commercial agreements have been secured, construction could begin in late 2012, and the facility could start operation by June 2015.
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“We believe that our consortium’s success will attract other international investors in geothermal development to the huge opportunities here in Indonesia, supporting the achievement of government of Indonesia’s crash program targets by 2016,” said John Wheble, president of PT Sorik Marapi.
Meanwhile, Tata Power aims to source at least a quarter of its portfolio from renewable energy by 2017, focusing on geothermal power. The company invested in other companies to develop geothermal energy-generation facilities, such as a 10 percent stake in Australian company Geodynamics.
Tata Power has been reviewing geothermal prospects outside of Australia, with Indonesia on top of the list, to secure a foothold in emerging renewable energy markets.
With roughly 17,000 islands dotted with active and extinct volcanoes, Indonesia has massive geothermal potential for about 27,000 MW of electricity, considered to be the largest in the world. But despite its immense geothermal resources, the country only has 1,196 MW in operation.
The Indonesian government launched crash programs to support the country’s rising energy demands. The first program aimed to build 10,000 MW of coal power plants, but due to growing criticisms about fossil fuels the government made plans to introduce a second crash program in 2008 for renewable energy.
Unlike the first one, the second program utilizes clean energy sources such as hydro, solar and geothermal. The program will invest $19.8 billion to generate 6,867 MW from geothermal power plants.
Indonesia’s Ministry of Energy and Mineral Resources estimated that there are 253 geothermal locations in Indonesia, of which 2.7 percent has been used for electricity generation. The majority of geothermal locations, accounting for 67.3 percent, are in the stage of preliminary survey, while 30.5 percent are in the geology survey phase and 3.1 percent in the exploration stage.
