Ormat signs contract for 60 MW greenfield development in Indonesia

Sumbawa Island, West Nusa Province, Indonesia (source: flickr/ a_rabin, creative commons)

Alexander Richter 8 Eki 2013

In a release today, Ormat Technologies announced that “it has signed an agreement for the development of the Hu’u Dompu project in Indonesia. The agreement was signed today in the presence of Penny Pritzker, Secretary of Commerce for the U.S. Department of Commerce. President Obama’s U.S. Asia Pacific Comprehensive Energy Partnership (USACEP) is encouraging U.S. companies to develop renewable energy in South East Asian countries, including Indonesia. Ormat will develop the project through the project company Pacific Geo Energy (PAGE). The Hu’u Dompu greenfield geothermal project is located in West Nusa Tenggara Province on Indonesia’s Sumbawa Island, and may be developed for up to 60 megawatts (MW) in three phases over the next six years.

“A joint project like this represents a clear win-win for our bilateral commercial relationship with Indonesia, and demonstrates the opportunities that exist in the world’s fastest-growing region for U.S. companies to not only sell their goods and services but share their expertise and drive development in high-priority areas like clean energy.”, said U.S. Secretary of Commerce Penny Pritzker.

Under the terms of the agreement with the initial developers, Ormat will hold a 90 percent stake in the project, while the remaining 10 percent will be held by the current owners of PAGE, PT Trimatra Energy and PT Bima Transindo Persada. PAGE obtained the geothermal license for the project, which entitles it to a power purchase agreement price of ¢9.65/kWh.

Dita Bronicki, chief executive officer of Ormat said, “As the first greenfield development for Ormat in Indonesia, we are pleased with the opportunity that this project presents. Together with our new local partners and the support from U.S. and international sources, we’re hopeful that this prospect will be a successful source of renewable sustainable and affordable energy to Sumbawa Island.”

The development of the Hu’u Dompu geothermal project will contribute significant economic value to the U.S. industrial sector and support valuable domestic U.S. jobs in renewables. Through the various phases of exploration, development and construction, U.S. export content will be sourced from states stretching coast-to-coast including California, Nevada, Minnesota, Wisconsin, Massachusetts, Iowa and South Carolina. An estimated 530 U.S. jobs will be created or retained throughout project development. Upon completion, the Hu’u Dompu geothermal project will save 500,000 tons of carbon dioxide emissions each year of operation.

This project supports the goals of the USACEP, which was launched by President Obama and the leaders of Indonesia and Brunei to improve the region’s ability to provide energy for its citizens. The Partnership aims to drive investment and facilitate progress through four key regional priorities: encouraging the use of renewables and cleaner energy, developing cross-border connectivity, promoting the greater use of natural gas, and addressing rural electrification issues and energy efficiency.”