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PLN are to face devastating delays for 36 geothermal projects

State utility firm PT Perusahaan Listrik Negara (PLN) announced this week several geothermal power plant projects might be delayed for years due to a variety of issues including land acquisition and technical problems, which is a huge blow for an industry that offers such potential to the Indonesian energy crisis.

PLN construction director Nasri Sebayang said that 36 out of 52 geothermal projects included in the second stage of the so-called 10,000 MW electricity fast-track program would not meet the initial deadline of 2016.

Six plants with a total capacity of 360 MW are delayed because they are located in conservation forests, while 16 other projects with a capacity of 1,510-MW face technical issues.

PLN has yet to even tender 14 more projects, with a total capacity of 825 MW.

“It is impossible to meet the 2016 deadline for all the power plants under the second fast-track program,” Nasri said.

The second fast-track program also covers coal, gas and hydro plants. Geothermal power plants make up 49 percent of the total.

PLN intends to ask the government to allow exploration for geothermal energy sources in conservation forests to speed up construction, Nasri said.

“Usually it takes five to seven years to build a geothermal plant,” Nasri said.

Plants using coal or gas usually take a maximum of three to five years to be completed.

Despite the delays, PLN still expects around 4,650 MW of electricity, 46 percent of the total anticipated capacity of the second fast-track program, to be on stream before 2016.

The figure includes 1,650 MW from plants constructed by PLN while the other 3,000 MW will come from the independent power producer (IPP) scheme.

PLN also reports that of the 9,900 MW projected in the first stage of fast-track program, around 45 percent is already in operation, including Lontar coal-fired plants in Banten with a capacity of 630 MW; Kendari, Southeast Sulawesi (10 MW); Paiton, East Java (660 MW); and Amurang, North Sulawesi (50 MW).

This year, 10 coal-fired plants producing over 2,400 MW will begin production including those in Pacitan, East Java (630 MW); Pelabuhan Ratu, West Java (1,050 MW); Barru, South Sulawesi (100 MW); and Nagan Raya in Aceh (220 MW).

Seventeen coal-fired plants, or almost 3,000 MW of power, are still under construction. Ten of them, mainly in Kalimantan and the eastern part of the country, should be completed this year adding about 1,700 MW to supplies.

Seven planned coal-fired plants with a total capacity of 1,325 MW in Central Java, Riau, West and Central Kalimantan and West Nusa Tenggara should all be completed next year.

In 2013, PLN will invest around Rp 65 trillion (US$6.73 billion), up from Rp 50 trillion in 2011. Of the total investment, around Rp 21 trillion will be from loans, Rp 18 trillion from internal funds and the rest from state budget.

Indonesia is struggling with protracted infrastructure capacity problems, including power. Analysts have pointed to these issues as obstacles to growth

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