Jakarta Globe, Tito Summa Siahaan, Apr 29, 2014
While many believe that Indonesian energy policy is on the right path with the development of geothermal alternatives, Deputy Finance Minister Bambang Brodjonegoro says there are risks.
Trucks at Patuha Geothermal plant in Bandung, West Java. Indonesia holds 40 percent of world's geothermal potential. (JG Photo/Reza Estily) |
While many believe that Indonesian energy policy is on the right path with the development of geothermal alternatives, Deputy Finance Minister Bambang Brodjonegoro says there are risks.
The
decision to introduce a feed-in-tariff policy for geothermal energy would put
an extra burden on the country’s electricity subsidy costs, according to
Bambang.
Bambang
refered to a pricing scheme in which the state electricity firm, Perusahaan
Listrik Negara (PLN), will pay a set price for electricity produced from
geothermal power plants owned and operated by independent power producers.
The
government has set aside Rp 71.36 trillion ($618 million) for electricity
subsidies in this year’s budget, down by about Rp 28 trillion from last year.
Depending
on the location, the tariff ranges from 10 cents to 18.5 cents per kilowatt
hour (KwH), with the Energy and Mineral Resources Ministry planning to raise it
further to 11.5 cents to 29 cents per KwH.
“Feed-in-tariffs
are not suitable for Indonesia, not when the government still subsidizes the
electricity,” Bambang added.
Bambang
instead proposes to replace the feed-in-tariff with a scheme that acknowledges
a price ceiling. “And then the government must also introduce an open,
international tender instead of direct appointment, so that we can get the best
deal,” he added.
Bambang
said that most of Indonesia’s sources of geothermal energy are located in Java
and Sumatra, where electricity is being generated by cheap coal. “This
situation will put PLN in a difficult position to agree to terms in geothermal
energy,” he added.
Satya Widya
Yudha, a lawmaker from the Golkar Party, said that there’s still a possibility
that the House of Representatives will enact the new oil and gas law before its
term is over.
“We still
have three months,” Satya said, who is a member of Commission VII ,which
oversees energy affairs. He added that the commission had handed over the bill
to the House’s Legislative Body.
“If the
Legislative Body makes a quick decision and lets Commission VII finalize the
bill, instead of creating a special committee comprised of lawmakers from other
commissions, I think it is very possible that it can be done before deadline,”
he added.
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