Carbon credits trader EcoSecurities has signed an emissions reduction purchase agreement with Indonesia utility PT PLN that will help finance development of five hydroelectric projects and a geothermal plant.
PT PLN President Commissioner Alhilal Hamdi said August 1 the agreement is one of the biggest carbon credit transactions by volume so far completed in Indonesia. The number of carbon emission reductions (CER) for the six projects is to total more than 2.6 million by 2012.
The agreement includes two larger hydroelectric projects, 20-MW Genyem in Papua Province and 30-MW Poigar 2 in North Sulawesi Province. PLN had recruited builders for the projects in 2005 and 2006.
The remaining three hydro projects are all small plants, totaling 4.2 MW, in West Kalimantan, North Sulawesi, and Gorontalo. The 60-MW geothermal plant is in West Java.
Currently, renewable energy is underutilized in Indonesia due to uncertain returns and more expensive technology than conventional thermal plants, PLN Renewables Manager Ario Senoaji said.
�The additional financial returns derived from the sale of CERS under the Clean Development Mechanism can help overcome these obstacles and drive adoption of renewable energy alternatives,� he said.
The PLN officials said they intend to develop many power plants from renewable resources to fulfill the utility’s power demand.
EcoSecurities conducts the business of originating, developing, and trading carbon credits. It structures and guides greenhouse gas emissions reduction projects through Kyoto Protocol requirements, working with both project developers and buyers of carbon credits.