Jakarta Globe, Tito Summa Siahaan, Aug 26, 2014
Jakarta. Members of the House of Representatives finally approved a revised geothermal law, with the long-awaited decision expected to encourage the exploitation of geothermal energy in Indonesia. Once the president signs the revised law, it will replace the one issued in 2003.
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| A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010. (AFP Photo/Adek Berry) |
Jakarta. Members of the House of Representatives finally approved a revised geothermal law, with the long-awaited decision expected to encourage the exploitation of geothermal energy in Indonesia. Once the president signs the revised law, it will replace the one issued in 2003.
Indonesia
only harnesses 5 percent of its estimated 28,617 megawatts of geothermal power
as the previous law did not allow for the exploitation of geothermal sources in
the country’s conservation forests.
Other issues that hampered the optimal use of this energy source include
pricing considered unfavorable by investors, and opposition from indigenous
peoples.
According
to Ridha Mulyana, director general for renewable energy and energy conservation
at the Ministry of Energy and Mineral Resources, there are several key changes
in the revised geothermal law.
In terms of
the revised law, geothermal exploitation will no longer be considered part of
mining activities, Ridha said, adding “With this we can accelerate geothermal
energy development.”
The old law
classified the exploitation of geothermal energy as a mining activity, thus
making conservation areas, where much of the country’s geothermal sources are
concentrated, off-limits.
Another
important change is that the power to issue permits or conduct tenders related
to geothermal energy exploitation is returned to the central government, Ridha
added.
Previously,
regional governments had the authority to issue such permits or hold tenders,
which resulted in bureaucratic complications and often overlap with the central
government regulations.
Regional
governments, however, will get production bonuses taken directly from the
electricity output and they will also have the authority to obtain other
financial benefits from geothermal energy, he said.
Ridha said
the Ministry of Energy and Mineral Resources will have to formulate new
regulations now for implementing the revised law.
“We expect
to complete a government regulation on production bonuses this year,” he said.
Nur
Pamudji, president director of state utility firm Perusahaan Listrik Negara,
welcomed the revised geothermal law.
“It would
encourage the development of energy sources as previously off-limits areas can
now be exploited,” he said.
Lawmaker
Nazarudin Kiemas, who heads the committee on the geothermal bill, added that
the passage of the revised law would lead to an increase in investment in
geothermal energy as investors will now have better legal certainty.
The
Ministry of Energy and Mineral Resources estimates that 42 percent of the
nation’s geothermal resources are located in protected forest areas.
