The Sarulla Geothermal Power Project is located in the Tapanuli Utara district, in North Sumatra province, Indonesia. It is the largest single-contract geothermal power project to date. It is owned and will be operated by Sarulla Operations Ltd. (SOL), a consortium of Medco-Ormat-Itochu-Kyushu.
The consortium includes PT Medco Energi International (27.5%), US based Ormat Technologies (12.75%), Japan based Itochu (25%) and Kyushu Electric (25%). It has a joint operating contract (JOC) with the concession holder Pertamina Geothermal Energy (PGE), a subsidiary of the state-owned oil and gas company PT Pertamina.
The Sarulla Geothermal Power Plant will have an installed capacity of 330MW which will be constructed in three phases of 110MW each. The construction of Phase 1 is scheduled to start in 2014 and its commercial operation is expected in 2016. The other two phases are expected to be commissioned in 2017 and 2018.
Sarulla plant is one of the private power plants under the second round of 10,000MW programme announced in 2004 by PLN.
“Indonesia is trying to cut the consumption of crude oil and is looking for alternative sources of energy.”
Indonesia is trying to cut the consumption of crude oil and is looking for alternative sources of energy. It has the potential to produce 27,000MW of electricity from geothermal sources but has not been able to achieve this fully due to the current high cost of geothermal energy.
Financial closure of the $1.17bn project was announced in May 2014. The Japan Bank for International Cooperation (JBIC) signed a loan agreement of $492m with SOL for the project in March 2014.
The other banks involved in the financing include Asian Development Bank (ADB), Bank of Tokyo-Mitsubishi UFJ, ING Bank, Societe Generale, Sumitomo Mitsui Banking Corporation, Mizuho Bank and National Australia Bank.
In April 2013, SOL signed a Joint Operating Contract (JOC) with the PT Pertamina Geothermal Energy (PGE), the project’s concession holder, which grants SOL the rights to use the geothermal field.
An Energy Sales Contract (ESC) was signed in the same month with the state electricity utility PT PLN, which will off-take the energy produced by the geothermal power plant for 30 years.
Sarulla plant make-up
The plant will be fuelled by two steam production and injection reservoirs named Silangkitang and Namora-I. The first unit will be constructed at Silangkitang and the other two units at Namora-I.
“The geothermal fluid will be re-injected in the underground wells to avoid depletion of gases.”
The plant will use Ormat’s Geothermal Combined Cycle Units (GCCU) which are more efficient than conventional steam power plants.
The GCCU will capture the steam from the wells and produce energy throughout the day without any interruptions. The geothermal fluid will be re-injected in the underground wells to avoid depletion of gases.
The steam from the plant will not be released into the atmosphere, but will be released back into the ground to ensure the sustainability of the well.
The power from Silangkitang will be transmitted to a substation at Namora-I via a 20km long, 150kV transmission line. This will be the interface point where PLN will construct a new transmission line to transmit power to the national grid.
Indonesian power market
Indonesia depends largely on oil to produce electricity. As of 2009, around 45.1% of energy was produced by oil, while gas constituted 26.7%, coal 24% and hydro electricity 2.3%.
Efforts to reduce dependence on the oil are underway. Since 2003, the government has negotiated with 26 independent power projects. Indonesia is already facing an electricity crisis and blackouts in regions such as Java.
Plans to end PLN’s monopoly are underway, so that private companies can sell the power directly to consumers. However they will have to continue to use PLN’s transmission network.