Consortium to Work on Three Geothermal Power Plants in Indonesia

The winner of a tender issued by the Indonesian state-owned utility PT PLN (Persero) for the development of the 340 megawatt (MW) Sarulla, North Sumatra, Indonesia geothermal power project on an independent power producer basis is a consortium composed of Ormat Technologies’ wholly owned subsidiary, Ormat International, Inc., a unit of Medco Energi Internasional Tbk (Indonesia’s largest private oil and gas company) and Itochu Corp. of Japan.

The Sarulla project represents the largest single-contract geothermal project to date in the geothermal industry worldwide and is a reflection of the large scale and high productivity of Indonesian geothermal resources, as well as an indicator of the potential of the Indonesian geothermal power industry. Medco is the leader of the consortium, whose bid consisted of the completion of the development of the geothermal steam field, construction of the field piping systems and three Ormat designed and supplied power plants with a combined gross capacity of 340 MW, owning and operating the facilities and selling electricity to PLN under a 30-year power purchase agreement (PPA) expected to be concluded within four months. Ormat’s responsibilities include the supply of the power plant and setting up and supervising the operations and maintenance of the plants, which will utilize its technology and equipment. The total project cost is projected to be about $600 million. The Sarulla project is to be constructed over the next five years in three phases of 110 to 120 MW each, with the first power generating unit to be operational within 30 months and the last within 48 months from the financial closing. The power plants to be constructed shall be Ormat Geothermal Combined Cycle Plants. Ormat has supplied and constructed five plants of this type to date in the U.S., the Philippines and New Zealand. As was the case with these plants, the Sarulla power plants will use air-cooled condensers to achieve 100% geothermal fluid reinjection, which serves to sustain the reservoir and to produce electrical power with very limited environmental impact. The exploitable geothermal resource potential of Indonesia has been conservatively estimated at 20,000 MW, which is widely distributed throughout the archipelago. Present installed capacity is approximately 800 MW. The Government of Indonesia and its Parliament have continuously reaffirmed their recognition of the importance of geothermal energy in Indonesia’s energy mix.
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