Recently, after rigorous review, the Indonesian State Electric Power Company approved the revised draft of PPA by Zhejiang Kaishan Compressor Co., Ltd. on Sorik Marapi Geothermal Power Company, a subsidiary of Kaishan.
Kaishan acquired Sorik Marapi Geothermal Power Company (hereinafter referred to as "SMGP") through Singapore KSORKA Company (hereinafter referred to as "KS ORKA") in April 2016. Prior to KS ORKA's acquisition, SMGP had obtained the power purchase agreement (hereinafter referred to as "PPA") issued by Indonesian State Power Company. After Kaishan acquired SMGP, the development mode was changed from three central power stations to modular power stations. Kaishan provides geothermal power generation complete sets of equipment. Compared with the central power station, modular power station has the advantages of shorter construction cy period, lower investment intensity and wider application ranges.
Because of the change of development technology and mode, SMGP needs to apply to the Indonesian State Power Company for PPA modification. After consultation, the revised draft of PPA made appropriate adjustments to the target operation date of each phase of the project, and made necessary modifications to the settlement method, etc. In the revised draft, the commercial operation date of the project is deferred. The original PPA is valid for 30 years from the commercial operation date of 240MW project. The revised draft stipulates that the validity period of PPA is 32 years from the first commercial operation date.
The formal approval of Sorik Marapi Geothermal Power Company’s PPA Revision means that the project has entered the stage of real income and ensures the sustainability of Kaishan's project in Indonesia. The success of Kaishan SMGP project will be a milestone in Kaishan’s development of geothermal power generation.
Since 2011, Kaishan has been devoted to the research and development and promotion of renewable energy power generation technology to achieve its transformation and upgrading. With self-developed screw expansion power generation technology with independent intellectual property rights and "one well, one station" geothermal power generation technology, Kaishan began to implement the strategy of transformation to renewable energy operators.
Indonesia ranks third in the world both in terms of geothermal power generation and in terms of geothermal power generation capacity, just behind the United States and the Philippines. Indonesia's geothermal resource reserves rank first in the world. At present, only 4.7% of its total geothermal energy is utilized. Most of its resources have not been exploited yet, and there is a huge potential for market development. After the establishment of KS Orka Company, two geothermal projects have been purchased from Indonesia, namely the Orik Marapi project in Sumatra (PPA capacity 240MW) and the Sokoria project in Denggara, East Nusa (PPA capacity 30MW).
Sorik Marapi Geothermal Project is located in the Sumatra Fault Zone in North Sumatra, Indonesia. It is the golden geothermal resource area in Indonesia, covering 629 square kilometers and extending more than 50 kilometers along the Sumatra Fault Zone. According to the detailed resource assessment of Sinclair Knight Merz, the authoritative global geothermal consultant, the geothermal resources of this project are reliable and the project is one of the largest geothermal projects in Indonesia.
With the continuous development of Geothermal Resources in Kaishan’s reserve, Kaishan is gradually realizing its goal of becoming a leading developer and operator of geothermal projects in the world, and is becoming the global leader in geothermal power development and operation. New energy business based on geothermal power plants will become Kaishan’s New Performance Growth Point.
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