Contribution to CO2 Emission Reduction (Clean Development Mechanism – CDM Projects)

PT Supreme Energy Muara Laboh (SEML) is in the process of developing a geothermal power plant of 220 MW in Muara Laboh, in Solok Selatan Regency, West Sumatra Province.

The renewable energy sources (geothermal) will contribute to sustainable long-term electricity supply to the Sumatra grid, avoiding considerable amounts of greenhouse emissions which would be released by producing the equivalent amount of electricity from fossil fuels. For the economic viability of the project it is essential to ensure that the project is registered under the Kyoto Protocol Clean Development Mechanism (CDM) framework and benefits from revenues from selling Carbon Emission Reductions (CERs).

The CDM projects are therefore a key component of the overall development process.

SEML has submitted the project notification under the CDM scheme to Indonesian National Council on Climate Change (NCCC) and United Nations Framework Convention on Climate Change (UNFCCC) in July 2010. SEML has worked with reputed consultants on the development of the Project Design Documents and preparing the subsequent steps of the registration process.

The CDM project of SEML has registered in Climate Change (UNFCCC) on October 31, 2012. Registering this project under the CDM before 31 December 2012 marks a key milestone as it ensures that the carbon credits (CERs) will be generated from the projects are eligible in offsetting GHG emissions under the European Union Emission Trading Scheme (EU ETS).

This geothermal energy project will contribute to sustainable long-term electricity supply to the Sumatra grid, avoiding considerable amounts of greenhouse emissions (GHG) which would be released by producing the equivalent amount of electricity from fossil fuels. It is estimated that the geothermal project will generate about 1,730,000 MWh of electricity per year. The project is grid connected geothermal power plants which will supply electricity to the Sumatra grid. The current emission factor (“combined margin” in the UNFCCC terminology) of the Sumatra grid is 0.743 tCO2e/MWh. The project activity is therefore estimated to generate emission reductions equivalent to ~1,170,000 tCO2/year.

The projects utilize available heat under the surface of earth as a source for power generation and will utilize environmentally safe and sound technology available in the geothermal power generation sector. In addition, the projects will create employment opportunities during the construction and operation of the geothermal project. In this way the projects demonstrate environmental, social, economic and technological sustainability and contribute to sustainable development objectives of Indonesia