House Commences Discussion on Revision of Geothermal Law

Kartini Laras Makmur, Andin Aditya Rahman

The Ministry of Energy and Mineral Resources has lodged a draft bill to revise the current Law No. 27 of 2003 on Geothermal Energy. The primary aim of the revision is to optimize the utilization of geothermal heat as an alternative energy.

Commission VII at the House of Representatives has formed a Special Committee to further discuss the Draft Bill. The Special Committee is comprised of representatives from nine political party factions.

Jero Wacik, Minister of Energy and Mineral Resources, expressed his appreciation for the steps taken by the House to accelerate discussion on the Draft Bill.

“Based on the views of all factions, I’m quite delighted that all agreed to accelerate the Draft Bill,” stated Jero in Jakarta on Monday.

The Minister explained that as a renewable energy source geothermal energy has great potential to contribute to electricity distribution in Indonesia.

It is estimated that Indonesia has up to 40 percent of the world’s potential geothermal energy resources capable of producing approximately 30,000 megawatts of electricity annually.

“Geothermal is an environment-friendly energy source with much lower gas emissions compared to other energy resources,” asserts the Minister.

Despite its great potential, the development of geothermal energy is currently being held back by cross-ministry regulations. This is primarily a consequence of geothermal energy production being considered a mining activity.

This has caused problems for exploiting geothermal hotspots in forest areas which requires permits from the Ministry of Forestry and Ministry of Environmental Affairs.

“The regulations perceive this as a mining activity. In accordance with Minister of Forestry regulations, mining activities are prohibited in conservation forests,” explained Jero.

Rida Mulyana, Director General of New Energy, Renewables and Energy Conservation, added that 15 potential geothermal hotspots are located in protected forest areas amounting to 6,000 megawatts of power.

Rida asserts that with its abundant sources of geothermal energy, Indonesia could overtake the Philippines in geothermal energy utilization by 2020. Currently, the annual geothermal energy produced in Philippines is approximately 1,900 megawatts.

“If the Muara Laboh, Rajabasa, and Rantau geothermal power plants are finished, total production will be around 2,000 megawatts,” explained Rida.

Rida further explained that the Draft Bill will address six important issues. First, it will provide for and regulate the utilization of geothermal hotspots in protected and conservation forest areas. Second, it will establish provisions on shareholdings in private geothermal power plants.

The third issue the Draft Bill will address is the Government’s authority to delegate geothermal exploration and exploitation to state-owned enterprises as well as the private sector. The Draft Bill will also retain the Government’s power to revoke geothermal licenses granted by mayors.

The two final points that the Draft Bill covers are provisions on participating interests that will provide regional governments with the opportunity to manage geothermal resources, and further detailed transitional provisions covering the period for the utilization of geothermal recourses.

Milton Pakpahan, Chairman of the Special Committee, asserts that his Committee will expedite the Inventory List of Issues (Daftar Inventarisasi Masalah) discussions on the Draft Bill. He added that the House will soon organize a public hearing with relevant stakeholders, such as PT. PLN and the Indonesian Geothermal Association.

“We are targeting the Draft Bill to enter a plenary session by next April,” stated Milton.

For an analysis of the Draft Bill see ILD No. 304.

(hot/kc)

Kartini Laras Makmur, Andin Aditya Rahman

The Ministry of Energy and Mineral Resources has lodged a draft bill to revise the current Law No. 27 of 2003 on Geothermal Energy. The primary aim of the revision is to optimize the utilization of geothermal heat as an alternative energy.

Commission VII at the House of Representatives has formed a Special Committee to further discuss the Draft Bill. The Special Committee is comprised of representatives from nine political party factions.

Jero Wacik, Minister of Energy and Mineral Resources, expressed his appreciation for the steps taken by the House to accelerate discussion on the Draft Bill.

“Based on the views of all factions, I’m quite delighted that all agreed to accelerate the Draft Bill,” stated Jero in Jakarta on Monday.

The Minister explained that as a renewable energy source geothermal energy has great potential to contribute to electricity distribution in Indonesia.

It is estimated that Indonesia has up to 40 percent of the world’s potential geothermal energy resources capable of producing approximately 30,000 megawatts of electricity annually.

“Geothermal is an environment-friendly energy source with much lower gas emissions compared to other energy resources,” asserts the Minister.

Despite its great potential, the development of geothermal energy is currently being held back by cross-ministry regulations. This is primarily a consequence of geothermal energy production being considered a mining activity.

This has caused problems for exploiting geothermal hotspots in forest areas which requires permits from the Ministry of Forestry and Ministry of Environmental Affairs.

“The regulations perceive this as a mining activity. In accordance with Minister of Forestry regulations, mining activities are prohibited in conservation forests,” explained Jero.

Rida Mulyana, Director General of New Energy, Renewables and Energy Conservation, added that 15 potential geothermal hotspots are located in protected forest areas amounting to 6,000 megawatts of power.

Rida asserts that with its abundant sources of geothermal energy, Indonesia could overtake the Philippines in geothermal energy utilization by 2020. Currently, the annual geothermal energy produced in Philippines is approximately 1,900 megawatts.

“If the Muara Laboh, Rajabasa, and Rantau geothermal power plants are finished, total production will be around 2,000 megawatts,” explained Rida.

Rida further explained that the Draft Bill will address six important issues. First, it will provide for and regulate the utilization of geothermal hotspots in protected and conservation forest areas. Second, it will establish provisions on shareholdings in private geothermal power plants.

The third issue the Draft Bill will address is the Government’s authority to delegate geothermal exploration and exploitation to state-owned enterprises as well as the private sector. The Draft Bill will also retain the Government’s power to revoke geothermal licenses granted by mayors.

The two final points that the Draft Bill covers are provisions on participating interests that will provide regional governments with the opportunity to manage geothermal resources, and further detailed transitional provisions covering the period for the utilization of geothermal recourses.

Milton Pakpahan, Chairman of the Special Committee, asserts that his Committee will expedite the Inventory List of Issues (Daftar Inventarisasi Masalah) discussions on the Draft Bill. He added that the House will soon organize a public hearing with relevant stakeholders, such as PT. PLN and the Indonesian Geothermal Association.

“We are targeting the Draft Bill to enter a plenary session by next April,” stated Milton.

For an analysis of the Draft Bill see ILD No. 304.

(hot/kc)

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