Pertamina unit in geothermal JV
Laurel Teo In Jakarta
It ties up with Icelandic firm; US, German firms also keen to build wind powered generators AN ICELANDIC company has teamed up with a unit of state oil and gas firm Pertamina to speed up the development of Indonesia's vast and mostly untapped geothermal resources.
Reykjavik Energy and PT Pertamina Geothermal Energy will focus first on studying and exploring potential sites - an initial phase that government officials hope will begin by next year.
Sugiharto Harsoprayitno, a director with the Energy and Mineral Resources department, said: 'They will start by looking at which area has potential for development.'
Speaking to local media, he stressed that it was premature at this stage to speak of the size of any investment amounts.
The two companies signed an agreement in Iceland last week, during the Indonesia-Iceland Geothermal Forum held in the capital city, Reykjavik.
As a follow-up, the Indonesian embassy in Oslo, Norway, will organise a visit for Iceland's geothermal businessmen to Indonesia at the end of next month.
Meanwhile, Suryadarma, operations director of Pertamina Geothermal Energy, said his company would begin preliminary studies into areas with bigger potential, such as Sumatra, Java and Sulawesi islands.
He added that others interested in geothermal tie-ups with Indonesia included the Philippines' PNOC and Enel Corp of Italy.
The partnership with Iceland is part of Indonesia's efforts to speed up the growth of its geothermal sector.
Although the country is believed to have 40 per cent of the world's geothermal resources, capable of yielding over 27,700 megawatts (MW) of electricity, only about 3 to 4 per cent of the resources are being tapped at the moment.
By 2010, however, the government hopes to boost geothermal-generated electricity to 2,000 MW, up from the present level of about 900 MW. And by 2025, the geothermal sector is supposed to produce 9,500 MW. These are targets set in the government's energy plan.
Iceland, on the other hand, has plenty of experience in this sector. Geothermal power produces about 26 per cent of the North Atlantic island country's electricity, and supplies heating and hot water for 87 per cent of its homes.
ReykjavÃk Energy, a city-owned utilities firm, operates the world's largest and most sophisticated geothermal district-heating system.
Besides geothermal energy, Indonesia plans to harness wind energy. Private companies from the United States and Germany have already expressed their interests in building wind-powered generators.
J Purwono, who heads the government's electricity and energy usage unit, told a parliamentary commission on Monday that the American and German companies were already conducting feasibility studies and looking for suitable local partners.
Areas with wind-energy potential included West Nusa Tenggara, East Nusa Tenggara, North Sumatra, South Sumatra and Maluku, he added.