VZCZCXRO1066
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1025 1680959
ZNR UUUUU ZZH
R 170959Z JUN 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 2577
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL
RUEHKO/AMEMBASSY TOKYO 3058
RUEHJS/AMCONSUL SURABAYA 2469
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS JAKARTA 001025 
 
SIPDIS 
 
DOE FOR PI-32 CUTLER AND EERE/ED WALL 
DEPT FOR EAP/MTS, EEB/ESC/IEC/ENR, AND EEB/IFD/ODF 
COMMERCE FOR 4430/NADJMI AND 6930/HUEPER 
TREASURY FOR T RAND AND G RAO 
MANILA FOR FCS REIDBORD AND TREASURY CURRY 
STATE PASS TO USTR EHLERS AND WEISEL 
STATE PASS TO EPA MARK KASMAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ENRG EAID ID
SUBJECT: U.S. COMPANIES FACE OBSTACLES IN ADB GEOTHERMAL TENDERS 
 
¶1. This is an action request.  Please refer to paragraph 7. 
 
¶2. Asian Development Bank (ADB) geothermal tender specifications 
prevent meaningful participation by U.S. companies.  A U.S. company 
active in the geothermal products market has brought to Post's 
attention that a requirement that turbine product lines be at least 
2 or 3 years old and in regular manufacture within the last 10 years 
disqualifies most types of geothermal turbines made or 
remanufactured in the United States. 
 
¶3. David Mendive of Geothermal Development Associates, a geothermal 
equipment supplier and remanufacturer based in Reno, NV, informed 
Post that his company was unable to compete in most ADB geothermal 
tenders, because compatible U.S. technology has not been 
manufactured regularly within the last 10 years.  Mendive confirmed 
that his company can refit or remanufacture turbines to meet all 
other technical specifications of most tenders.  When asked about 
the rule, the ADB's Director of Energy and Water Division confirmed 
the rule serves ADB's goals, because "we are looking for new 
equipment and not retrofitted equipment.  We will not be able to 
support retrofitted equipment." 
 
¶4. According to Mendive, few U.S. companies regularly manufacture 
geothermal turbines.  Japanese manufacturers dominate the geothermal 
turbine market, and this equipment is the only type that 
consistently qualifies under ADB requirements, according to Mendive. 
 In a separate discussion, Indonesia's Director of Geothermal 
Enterprise Supervision Sugiharto Harsoprayitno observed that 
Japanese firms have dominated Indonesia's geothermal development in 
recent years and expressed a desire to broaden the mix of geothermal 
firms in Indonesia. 
 
¶5. Geothermal experts at the Department of Energy have expressed 
concerns that the ADB specifications will lock in current 
technologies and exclude new developments.  U.S. companies including 
UTC and Ormat have developed power conversion technologies for 
low-temperature applications that could potentially be excluded by 
ADB's restrictions.  The state of geothermal technology is changing 
rapidly, and in a few years there will likely be new drilling 
methods, pumps, tools, and conversion technologies.  It is critical 
that specifications such as ADB's do not disadvantage the 
implementation of these technologies, or handicap U.S. companies 
that develop them. 
 
¶6. Indonesia is preparing an electricity crash program that will add 
10,000 MW of electricity generating capacity, 4,700 MW of which will 
be geothermal power.  This program presents an opportunity to U.S. 
geothermal developers, but the ADB 10-year rule would put U.S. 
companies at a disadvantage for projects that receive ADB funding. 
 
¶7. Post requests assistance in addressing obstacles in ADB 
geothermal tender requirements so that U.S. firms can fully 
participate in ADB-funded projects. 
 
NORTH