Two state-owned enterprises (SOEs) in the energy sector, PT Pertamina (Persero) and PT PLN (Persero), signed a Memorandum of Understanding (MoU) on the development of geothermal energy for power generation as part of the national energy security agenda and the acceleration of the transition to clean energy.
The collaboration between Pertamina and PLN, through their affiliates, PT Pertamina Geothermal Energy Tbk (PGE) (IDX: PGEO) and PT PLN Indonesia Power (PLN IP), was carried out in a Heads of Agreement (HoA) signed at Wisma Danantara Indonesia on Tuesday morning (August 5). The synergy was facilitated by the Anagata Nusantara Investment Management Agency (BPI Danantara/Danantara Indonesia) through PT Danantara Asset Management (Persero).
This agreement covers cooperation focused on accelerating geothermal development in 19 existing projects with a total capacity of 530 megawatts (MW).
Julfi Hadi, President Director of PT Pertamina Geothermal Energy Tbk, stated, "This step is a significant part of PGE's strategy to accelerate the development of the 3 gigawatts (GW) of potential geothermal reserves that we have identified in 10 independently managed geothermal working areas (WKP). This development includes seven brownfield projects, eight yellowfield projects, and four greenfield projects in the Hululais, Ulubelu, Lumut Balai, Lahendong, Kamojang, Sungai Penuh, and Kotamobagu Geothermal Working Areas (WKP).
This collaboration has the potential to generate additional capacity development of up to 1,130 MW with an estimated investment value of up to USD 5.4 billion. This additional development potential is projected from both existing producing working areas and new prospective areas.
Co-generation Geothermal Power Plants (Ulubelu) (30 MW) & Lahendong (15 MW)
On this occasion, PGE and PLN IP also agreed to a Consortium Commitment Agreement for the development of the Ulubelu Bottoming Unit (30 MW) and Lahendong Bottoming Unit 1 (15 MW) geothermal power plants using co-generation technology. Overall, this project has the potential to increase generating capacity by up to 45 MW.
"The application of co-generation technology can shorten the power plant development process with more efficient operating costs. This cost efficiency is due to the use of existing energy and the elimination of the exploration phase. Therefore, we believe this consortium can increase generating capacity without increasing the Company's capital expenditure (capex) burden," explained Julfi.
As a country located in the Pacific Ring of Fire, Indonesia has geothermal reserves of up to 24 GW, or approximately 40% of global reserves. By 2024, Indonesia's installed geothermal power plant capacity is projected to reach 2.6 GW, a significant increase from 1.4 GW in 2014. However, this enormous potential still needs to be optimally utilized. As a world-class green energy company, PGE is ready to be a driving force behind a greener and more sustainable national energy transition, one way being through a synergy with PLN IP facilitated by Danantara.
Danantara Indonesia CEO Rosan Roeslani stated, "Geothermal energy development is part of the national strategic agenda to strengthen energy security and encourage the transition to a low-carbon economy. We are committed to ensuring that every strategic asset management initiative is implemented with accountable, professional governance and in line with international standards. Through integrated collaboration across state-owned enterprises, Danantara Indonesia supports the creation of inclusive and sustainable economic growth, while strengthening Indonesia's energy independence."
Similarly, PT Pertamina (Persero) President Director Simon Aloysius Mantiri also emphasized, "As the entity mandated to manage national geothermal working areas, Pertamina, through PGE, is committed to expanding the utilization of geothermal resources as the backbone of Indonesia's clean energy sector. Through this collaboration, we are exploring collaborative schemes that will allow for the optimization of the potential of geothermal working areas in a measured and progressive manner. Together with PLN and Danantara Indonesia, we are ready to accelerate the implementation of strategic projects that directly contribute to the national energy transition target and increase the renewable energy mix."
