A big congratulations to Ormat technologies of Yavne, Israel for signing a $254 million deal for providing geothermal energy in Indonesia! The first phase of the 330-megawatt Sarulla geothermal power station in Sumatra is due to begin operating in 2016.
Sumatra lies in one of the most geologically active parts of the Pacific ring of fire and is known for numerous active volcanoes. The nearby volcano of Krakatoa was responsible for the largest eruption in recorded history and Sumatra’s Toba volcano was responsible for earth’s largest volcanic eruption in the past two million years.
It was about 5000 times more powerful than Mount Saint Helen’s 1980 eruption. Earthquakes, volcanic eruptions and the threat of tsunamis are unfortunate facts of life for the people of Indonesia.
Now for the good news, Indonesia has 40 percent of the world’s exploitable geothermal energy potential. It has been estimated that as much as 28 billion watts of geothermal energy potential is available there or the equivalent of 12 billion barrels of oil. It has been a long slow process tapping into this energy.
The government of Indonesia set rules for geothermal energy more than a decade ago and there has been some controversy about plans to tap into geothermal energy here. So currently only 1.2 billion geothermal watts are being exploited in Indonesia.
According to their press release, Ormat will deploy their modular geothermal generating technology in three phases, each consisting of 110 megawatts of generating capacity.
One important consideration for this project is Ormat’s technology which allows nearly 100% of the geothermal fluid to be recycled and which utilizes the extracted brine. This will both increase the efficiency of this geothermal project and reduce the emissions of unwanted volcanic gasses.
Ormat (NYSE: ORA), expects to complete financing and begin construction in one year. The Sarulla geothermal power project is among the world’s largest single-contract geothermal power plants and is an important step towards Indonesia’s planned ten billion watt geothermal expansion.
Photograph of boat and erupting Indonesian volcano by Byelikova Oksana via Shutterstock