Jakarta Globe, Tito Summa Siahaan, October 22, 2013
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| Trucks at Patuha Geothermal plant in Bandung, West Java. Indonesia holds 40 percent of world’s geothermal potential. (JG Photo/Reza Estily) |
A special
committee at the House of Representatives approved on Monday the geothermal
bill proposed by the government, which would make it a step closer to becoming
law, as the nation seeks to wean itself from reliance on fossil fuel to produce
electricity.
All of the
nine factions in the committee supported the bill, and all of the speakers
highlighted the country’s enormous geothermal potential, the need to attract
investment, and the inadequacy of the current geothermal law.
Should the
bill become law, it will replace the existing law on geothermal issued in 2003.
Energy and
Mineral Resources Minister Jero Wacik said the aim of the bill is to optimize
the country’s geothermal potential.
“Indonesia
holds 40 percent of the world’s geothermal potential, or 28,617 megawatts, but
only 1,341 megawatts, or 4.6 percent of that amount had been harnessed,” he
said.
Jero said
that one of the key points in the proposed bill is the removal of the words
“mining activities” in the definition of geothermal activities. Inclusion of
such wording could create unnecessary complication in the exploitation of
geothermal energy.
Another law
bans any form of “mining activities” to be performed in areas of conservation,
according to the minister.
“Most of
our geothermal potential is located within conservation areas,” Jero said.
Such
overlapping policies in Indonesia have, in many cases, created disadvantages
for investors — especially among international investors that want to invest in
the country’s energy business.
Aside from
that, regulation on conservation areas had been widely blamed as the main
reason as to why development of many geothermal projects has stalled.
Ali Kasela,
a lawmaker for People’s Conscience Party (Hanura), said that his party
supported the bill as it would bring more benefits from geothermal energy to regional
development.
Jero said
that the problem is rooted in the misunderstanding of the impact of geothermal
projects.
“Unlike
mining operations, a geothermal power plant takes only little space within a
protected forested area,” Jero said.
State
utility firm Perusahaan Listrik Negara estimated that Indonesia would need at
least $77.3 billion in new investment to produce 13,000 megawatts of renewable
energy, including geothermal, to the country’s electricity grid until 2021.
Tisnaldi,
the director for geothermal at the Energy Ministry, said that another highlight
in the proposed bill is the obligation for geothermal concession holders to
sell a 10 percent interest to regionally owned enterprises or state-owned
enterprises after it enters the exploitation stage.
“It aims to
share the benefits of the geothermal project to local governments,” Trisnaldi
said.
Jero said
that the government is also looking to use geothermal to reduce the country’s
dependence on fossil fuel and help the objective in carbon emission reduction.
Milton
Pakpahan, the chairman of the special committee, said that the bill is
scheduled to be approved by the House plenary meeting in April 2014.
The
National Energy Council (DEN) forecast early this year that the country may not
achieve its target to have a more balanced energy mix by 2025, which is
designed to reduce the country’s oil consumption and carbon emissions.
Based on
the council’s projections, Indonesia’s energy consumption in 2025 would be made
up of 23.9 percent oil, 19.7 percent natural gas, 30.7 percent coal and 25.7
percent renewables.
In 2010,
the country’s energy mix was 49.8 percent oil, 24.5 percent coal, 20 percent
gas and 5.7 percent renewables.
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