Revision on Geothermal Law Will Be Passed This Year

 
Kartini Laras Makmur, Andin Aditya Rahman
 
The Government is currently drafting an amendment to revise Law No. 27 of 2003 on Geothermal Energy (Geothermal Law). The amendment is scheduled to be passed by the House in May or June this year.
 
According to the Government, the revision is expected to resolve current issues related to the geothermal energy sector, including geothermal energy prices, complicated licensing procedures and insufficient investment.
 
“With the revision, it is hoped that all problems deterring the development of geothermal energy, such as overlapping regulatory issues, can be resolved,” stated Trisnaldi, Director of Geothermal Energy at the Ministry of Energy and Mineral Resources last Thursday.
 
The issue receiving the most attention is the determination of geothermal energy prices that involve input from two international banking institutions, the World Bank and the Asian Development Bank (ADB).
 
“For review of the prices, we have cooperated with the World Bank and the ADB to conduct a study to review the price. It will also involve PLN [the state-owned electricity company,-], Ministry of Finance, developers and associations,” explained Mr. Trisnaldi.
 
The Government will use the World Bank and the ADB’s study as a reference for establishing regulations on geothermal energy prices. Mr. Trisnaldi admitted that both institutions will conclude their respective studies in the next day or so. If everything goes according to the plan, the Government will issue a new regulation on geothermal energy prices at the end of this month.
 
“We have fine-tuned it, and the exact figure will surely be better than the last one but I cannot yet say the exact nominal amount. The plan is to publish the said figures later this month,” said Mr. Trisnaldi.
 
Susilo Siswoutomo, Deputy Minister of Energy and Mineral Resources, admitted there are a number of problems related to the geothermal energy sector, including unattractive sales prices of geothermal energy, complicated licensing procedures, and lack of direct investments.
 
These complications have ultimately mounted to a shortage of geothermal power plants, that have only reaching 40 percent of the Government’s target.
 
“As of today the total installed capacity is 2,500 MW, whereas as of 2025, the Government has targeted the development of installed capacity by PLTP [geothermal power plants] in Indonesia to reach 6,500 MW,” explained Mr. Siswoutomo.
 
(For more information on the geothermal law revision, see: ILD No. 304)
 
(hot/kc)