LEADING THE WAY

Indonesia 2018 | ENERGY & MINING | INTERVIEW

TBY talks to Tetsuro Kurita, President Director of PT Fuji Electric Indonesia, on geothermal potential, efficient technology, and investment incentives.

How would you assess the opportunities in Indonesia within the field of renewable energy?

Indonesia is one of the countries with significant potential in the global geothermal market. Currently, Fuji has almost a 50% market share in Indonesia and is increasing its market share. In 2018, we were awarded a major project of Muara Laboh in Sumatra. The government is planning to increase the production up to 7GW by 2025 from 1.7GW today. The steam produced from the well is transmitted to the power plant, where the main equipment produces electricity by the steam. We started working for a geothermal plant in 1980 at a time when other competitors did not see the potential in Indonesia. Over time, we have supplied one geothermal plant after another, now working as not only a manufacturer but also an EPC company. We would like to grow together with the Republic of Indonesia and sustain the leading position in geothermal power generation.

What could be done to attract more investments into geothermal?

It would be expected for Indonesia to be more flexible in the regulations to encourage more investors in the area and offer an attractive purchase price of geothermal electricity so as not to have a negative impact on geothermal development with a deep concern for the long-term return on investment. Geothermal independent power producer (IPP) sales price will be compared to other kinds of power plants. Once the period of initial high investment is over, the steam is acquired with much less investment or maintenance expenditures after the operation starts. In the case of oil and gas drilling, even if they fail to drill in the right place, there are still some government compensations. In geothermal, however, such aid has not yet been established. The government declares it would like to increase total power supply by additional 35GW, 25% of which should be renewable energy with plans for geothermal to be the biggest contributor within the renewable energies matrix. We could attract more investors only if the government provides a more favorable purchase price for geothermal power plants.

How can Fuji support Indonesia with its sustainability objectives?

We have extensive experience in energy saving systems all over the world, and the most outstanding one is our smart city project in Japan. With our know-how, we are ready to serve also Indonesian power plants by providing such technologies. Power plants in Indonesia were not designed with the intent of saving energy but rather reducing costs. For example, the engines consume a large amount of power, and most of all, motors in power plants in Indonesia today do not have inverters for driving the system efficiently. Motors run for 24 hours a day while effective operations only take place for six hours. Fuji Electric has a solution for efficient motor control. New technology requires higher investment; however, energy-efficient plants run for a long time and gain accumulative efficiency, which will generate much greater profits.

Could you tell us more about your Suryacipta industrial park project?

With Japanese government (NEDO) assistance, we provided a high-quality electricity supply system to Suryacipta Industrial Park by utilizing Japanese power infrastructure technology. This project is designed to solve the problem of inconsistent electricity supply common in Indonesia. We have installed a large system with Japanese government funding of around USD50 million there. Together with NEDO and a consortium of Japanese companies, including Sumitomo Corporation, Mitsubishi Electric, NTT, and TEPCO of Japan, Fuji provides the best solution for power stabilization and improves the quality of PLN incoming power. In this project, we installed UPS with the capacity of around 4.5MW for selected tenants in the industrial park. We became the first company to provide such a solution in Indonesia. I hope Fuji Electric Indonesia will grow strongly with the country and contribute to it continuing into the future.