Pertamina Geothermal Energy And PLN IP Cooperation Develop Potential Geothermal

JAKARTA - PT Pertamina Geothermal Energy Tbk (PGEO) established a strategic partnership with PT PLN Indonesia Power to accelerate the development of geothermal potential in Indonesia.

This partnership was marked by the signing of the Joint Development Study Agreement (JDSA) by the President Director of PT Pertamina Geothermal Energy Tbk Julfi Hadi and the Director of Business and Commerce Development of PT PLN Indonesia Power Bernadus Sudarmanta on Thursday 22 February in Bali.

Julfi Hadi explained that PGE and PLN IP adopted a new scheme to improve the commerciality of geothermal projects by increasing the production capacity of electricity through the utilization of hot water resulting from vapor separation (brine).

Furthermore, Julfi said this collaboration was one of the breakthroughs awaited for the development of the geothermal business. Through this JDSA, he said, there are also a number of Feasibility Study (FS) targets, including an attractive and bankable co-generation project with comprehensive and prudent studies so that it can achieve an optimal commerciality level.

"The next target is an attractive Internal Rate of Return (IRR) project with a quick completion of the Power Purchase Agreement (PPA) according to the price corridor in Presidential Decree 112/2022," said Julfi in his statement to the media, Friday, February 23.

He added, in this case, he said, the use of proven technology and mature so that it can produce a faster increase in efficiency, a faster Commercial Operation Date (COD), and a lower Capex.

Furthermore, Julfi said this collaboration is a form of collaboration between two groups of energy SOEs in Indonesia where PLN as a single buyer (sole off-taker) and PGE as a leader in the geothermal energy sector to maximize the use of Indonesia's geothermal potential as well as to increase business commerciality as a strategic effort to achieve the target of 1 GW of installed capacity in the next two to three years.

The potential for additional installed capacity through the implementation of this co-generation is up to 230 MW. For now, the locations that are a priority for FS to be carried out are Ulubelu Bottoming Unit (BU) 30 MW and Lahendong BU 15 MW.

Meanwhile Bernadus assessed that the realization of this JDSA was actually an important form of achievement. He also called this partnership the right first step to realize the energy transition and take-off efforts towards better growth in the geothermal business going forward.

"PGE and PLN IP are committed to accelerating PPA completion so that operational targets can also be achieved more quickly," he said.

Both parties agreed to accelerate this project and make it a business model for future geothermal development. This JDSA is expected to accelerate the development of PLTP to support the energy transition, especially with the characteristics of geothermal as a basic electric load.