Since August 2006 production has been progressing on the Sarulla Geothermal Project in Indonesia. The project has been operated by a consortium known as the Medco-Ormat-Itochu Consortium which consists of Medco Energi Internasional Tbk; Ormat International Inc., a subsidiary of Ormat Technologies, Inc. (”Ormat”); and the Itochu Corporation.

The Sarulla Project will result in a geothermal power plant with a capacity of 340MW which represents the largest single contract geothermal power plant project to date. It is a strong indication of the large scale potential of Indonesian geothermal resources.

The Sarulla Project is being constructed in three phases consisting of power generating units of 110 to 120 MW each. The first phase is expected to be completed by the end of 2008 with the project to be in full operation mode within a further 18 months.

Total cost of the project will be approximately $800 million with the Japan Bank for International Corporation providing the majority of the financing. Power delivered by the project will serve the base load of the state-owned Indonesian power company PT Perusahaan Listrik Negara’s North Sumatra - Aceh grid system. Upon the completion of the third phase, the expected annual revenue from electricity sales under the PPA will be approximately $110 million.

The power plant will be constructed by Ormat Geothermal Combined Cycle Plants and the system has a number of positives. By capturing steam from wells and converting that power into energy, it can operated 24 hours a day without the concern of intermittency. After use, the geothermal fluid is injected back into the ground so the geothermal wells will not be depleted. Rather than releasing the steam from the plant into the atmosphere, the steam will be re-released back into the ground which will also ensure the sustainability of the well.

Project news last updated : 18 December 2007

To read about more geothermal energy developments, get yourself over to the Geothermal Energy page.