PLN and GE sign LoI for biomass power plant

Indonesian utility company PT PLN and US-based technology firm General Electric (GE) have signed a letter of intent to develop a biomass-fired power plant.

The $5 million (€3.8 million) pilot facility, to be located in Sumba Island, East Nusa Tenggara, will generate 1MW of renewable power from eucalyptus- and acacia tree-derived woodchips. It is expected to begin supplying electricity to Sumba Island residents in 2014.

Under the agreement, PLN and local organisations will supply the 100-hectare site on which the plant will be built, and GE will install its gasification technology.

'The project will demonstrate the technical and economic viability of extending electricity to remote areas using biomass fuel sources. It will also serve as a model for developing biomass power plants in other parts of Indonesia,' PLN president director Nur Pamudji was quoted as saying.

The biomass plant will help Indonesia reduce its reliance on diesel power plants.

Although a higher initial investment will be needed to establish the biomass plant compared with its diesel alternative (around 30% more), the return on investment will be faster, according to GE Asia Pacific's gas engine market development director Made Wahyu Wiratma.

'The rate for the electricity from a diesel power plant is between 26 to 30 US cents per kWh, while the rate for the electricity from the woodchip-fired power plant is only 12-15 US cents per kWh,' he said.