Indonesia shortlists Tata, Medco for geothermal project

JAKARTA (Reuters) - Indonesia has shortlisted India's Tata Power Co Ltd and PT Medco Energi International as bidders for a geothermal power project, an official at the mines and energy ministry said on Friday.

The plant, in Sorik Merapi in North Sumatra, will have an initial capacity of 55 megawatts (MW), gradually increasing to 200 MW.

Indonesian energy explorer Medco is part of a consortium with Ormat Technologies, while Tata, India's largest private sector utility, is part of a consortium with Indonesian firm PT Supraco Energy.

"Medco offers a lower electricity price than the Supraco-Tata consortium. The government will evaluate the result of the tender to decide who is the winner," said Sugiharto Harso Prayitno, the director at the ministry, in a telephone message to Reuters.

Chevron Corp said it had also submitted a bid but was not shortlisted.

Indonesia has launched the first phase of a program to add 10,000 MW of generating capacity from 35 new coal-fired power plants, which are mostly still under construction.

The government is still finalizing the second phase of the crash program to add another 10,000 MW using coal, geothermal and renewable energy resources.

With hundreds of active and extinct volcanoes, Indonesia has the potential to produce an estimated 27,000 MW of electricity from geothermal sources.

However, that potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.

(Reporting by Muklis Ali; Editing by Sara Webb)