Wind energy in Indonesia: Another wind farm

State utility Perusahaan Listrik Negara is eager to see Indonesia’s second large-scale wind farm in operation by the end of next year, in an attempt to reduce its reliance on costly fossil fuel, president director Nur Pamudji said on Monday.

Two wind farm developers UPC Renewables Indonesia and Binatek Reka Energi will build the $100 million wind farm, off the coast of Samas in Yogyakarta. Consisting of 16 to 33 wind turbines, the capacity of the wind farm will be 50 megawatts. “This will be Indonesia’s second wind farm after the one in Sukabumi. It will be the largest,” Pamudji said.

In January, local energy firm Viron Energy signed a power-purchase agreement with PLN that would allow it to purchase power from its wind farm in Sukabumi, West Java, which has a capacity of 30 megawatts.

Pamudji said PLN was interested in buying power from the UPC Renewables wind farm because it would save billions of dollars that would otherwise be spent on costlier fuel. The two companies signed a non-binding agreement on Friday that would allow UPC to move forward with its investment plan.

“UPC Renewables will study the investment plan and come up with a price. Then we will sign power-purchase agreement,” Pamudji said.

Kardaya Warnika, director general of renewable energy at the Ministry of Energy and Mineral Resources, said in April that UPC Renewables had offered a purchasing period of 30 years at a price of Rp 1,200 (13 cents) per kilowatt hour for the first 20 years and Rp 700 per kWh beyond that. That compares to an average production cost of Rp 1,100 per kWh last year and an average selling price of Rp 729 per kWh at state power company PLN.

Pamudji, who had been aware of the price offer, declined to comment on the price “until their study is done.”

PLN, however, hopes that the wind farm can be operational by the end of 2013. UPC Renewables said the project could be finished in 15 months, once the power purchase agreement was signed.

“This wind power project is safe for the community and will help Indonesia achieve its target for the use of clean energy,” Erwin Jahja, president director of Binatek Reka Energi, said in a statement on Friday.

In PLN’s 2011-20 electricity supply plan, the utility forecast states that Indonesia will need to provide an additional 55,346 megawatts of power capacity over the next decade, assuming a yearly economic growth of 7 percent, at a total investment estimated at $96.2 billion.

The plan outlines an aggressive decline in using oil fuel for the country’s power, while shifting to cheaper gas and coal. Renewable energy would comprise 18 percent of total power production by the end of this decade, from just 10 percent currently. Wind energy, however, has yet to be included in the plan.

PLN is working out a deal that could give Indonesia a wind farm in Yogyakarta, near the southern coast of Java and facing the Indian Ocean. This would be the second such wind farm in the country, following one in Sukabumi, West Java.