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NEWS UPDATES Asean Affairs   6 December 2010

PLN begins drilling for geothermal plant

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In a major step toward diversifying the country's overreliance on fuel for power generation, the state electricity company (PLN) said one of its subsidiaries had started drilling the Tulehu geothermal field in Maluku. The company plans to open a 20 megawatt geothermal plant in the province to make use of the alternative energy source.

"We started drilling December 5, and expect to have the power plant in operation by 2014," said PLN Geothermal chairman Tjahjo Sasmojo.

He added that PLN's decision to scrap earlier plans to build a diesel power plant in the region will save the state company more than Rp250 billion ($28 million).

Tjahjo said the project's total cost of $86 million will be largely funded by a $73 million soft loan from the Japan International Cooperation Agency (JICA). "We hope JICA can sign the soft loan by early March," he said.

PLN is struggling to meet the national target of producing 55,484 megawatts by 2019 to power economic growth.

The state utility has been tasked with generating 31,958 megawatts with 23,525 offered to the private sector through the Independent Power Producer (IPP) scheme.

The government has announced a 20,000 megawatt fast-track program, divided into two phases, expected to be completed by 2014.

PLN expects to produce 10,000 megawatts by 2013 in the first phase, with the same amount produced by the private sector in the second phase by 2014.

Tjahjo said the Maluku geothermal plant is not included as part of this fast-track program.

"We have had plans to open this geothermal plant since 2007. We first examined the field in 2009, and will start drilling today," he told the Jakarta Globe.

Tjahjo said the next plan is to explore the Mataloko field in Flores, in East Nusa Tenggara. "We do not know how much of the geothermal reserve there is yet. We are currently surveying the field," he said.

The company also operates a geothermal plant in Lahedong, North Sumatera, and plans to expand its business further, into geothermal power plant machinery maintenance.

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