Tokyo-based Sumitomo Corporation, one of Japan’s largest companies, announced on Monday that it had won a contract to build a 35-megawatt geothermal power plant in West Java for Pertamina Geothermal Energy, a unit of state-owned energy company Pertamina.
The project will be part of Pertamina’s Kamojang geothermal power plant complex, which currently consists of four turbines with a combined capacity of 200 megawatts. The Kamojang plant, located in West Java’s Garut district, has been on line since 1982.
Sumitomo said in a statement that it would conduct the engineering, procurement and construction parts of the projects in a consortium that includes Rekayasa Industry, a state engineering firm. Fuji Electric, another Japanese firm, will be responsible for manufacturing and supplying equipment for the project.
“Construction is scheduled to take 23 months and be completed in July 2015,” Sumitomo said in the statement.
Ardiyansyah, the president director of Pertamina Geothermal Energy, told the Jakarta Globe in a text message that the estimated investment value of Kamojang power plant expansion was $58 million.
The Kamojang plant is Sumitomo’s ninth geothermal project in the country. It most recently completed the 110-megawatt Ulubelu plant in Sumatra’s Lampung province, which began commercial operation in December last year.
Pertamina manages 14 geothermal reserves spread across Indonesia, with three in operation. It generates 402 megawatts of electricity from geothermal energy and has laid out an ambitious plan to generate 2,200 megawatts, or the equivalent of 100,000 barrels of oil, by 2014.
Indonesia holds the largest geothermal potential in the world, estimated at around 29 gigawatts of electricity. Only 5 percent, or around 1,340 megawatt, of the country’s geothermal potential had been exploited to date.
Ridha Mulyana, director general for renewable energy at the Energy and Mineral Resources Ministry, said Indonesia had seen little progress in its attempt to better utilize its geothermal potential. Ridha cited difficulties in obtaining permits and financing among the main reasons.
With most geothermal reserves located in forest areas, permission to exploit them requires extensive negotiations between different government agencies. Financing is ties to an old structure in which the government awards contracts to exploit geothermal energy to the lowest bidder.
The government has introduced a feed-in-tariff scheme to guarantee that electricity generated from geothermal energy will fetch a higher rate. It has allocated Rp 3 trillion to finance geothermal exploration.