Strategic Partnership for Geothermal Power Plant Commercialization in Indonesia
In a groundbreaking move, PT Pertamina Geothermal Energy Tbk (PGE) has forged a strategic partnership with PT PLN Indonesia Power to accelerate the development of geothermal potential in Indonesia. This partnership signifies a significant step towards achieving energy transition goals.
Joint Development Study Agreement Signing Ceremony
The Joint Development Study Agreement (JDSA) was officially signed by PT Pertamina Geothermal Energy Tbk’s President Director, Julfi Hadi, and PT PLN Indonesia Power’s Director of Business Development and Commerce, Bernadus Sudarmanta, on Thursday, February 22nd in Bali. This marks a new chapter in the collaboration between the two energy giants.
Julfi Hadi highlighted that PGE and PLN IP are adopting a new scheme to enhance the commercial viability of geothermal projects by increasing electricity production capacity through the utilization of brine, a byproduct of steam separation. This innovative approach is expected to revolutionize the geothermal business landscape in Indonesia.
Targets and Milestones
Under the JDSA, several Feasibility Study (FS) targets have been set, including attractive and bankable co-generation projects, with comprehensive and prudent assessments aimed at achieving optimal commercial viability. The next target is to develop attractive Internal Rate of Return (IRR) projects with swift Power Purchase Agreement (PPA) finalization in accordance with the price corridor outlined in Perpres 112/2022.
Julfi emphasized the importance of leveraging proven and mature technologies to enhance efficiency, expedite Commercial Operation Dates (COD), and reduce Capital Expenditure (Capex). This collaboration between the two state-owned energy groups, with PLN as the sole off-taker and PGE as a leader in the geothermal energy sector, aims to maximize Indonesia’s geothermal potential and boost business commerciality to achieve the strategic target of 1 GW installed capacity within the next 2 to 3 years.
Commitment to Accelerating Progress
Bernadus Sudarmanta expressed his belief that the JDSA signifies a significant milestone in the journey towards energy transition and sets the stage for a brighter future in geothermal business growth. Both parties are committed to expediting PPA finalization to achieve operational targets sooner.
In conclusion, the collaboration and synergy between PGE and PLN IP are paramount in accelerating the growth of Indonesia’s geothermal potential. The optimism surrounding the JDSA’s impact on achieving PGE’s aspiration to become a 1 GW company is palpable. This partnership sets a precedent for future geothermal developments and is poised to expedite the development of Geothermal Power Plants (PLTP) to support energy transition, particularly with geothermal characteristics as a baseload electricity demand.
