Court maintains central government authority over geothermal resources

The Constitutional Court ruled on Wednesday in favor of the central government maintaining its authority over the country?s geothermal resources in a judicial review of Law No 21/2014 on geothermal and Law No 23/2014 on local administration.

The East Java government filed a judicial review of the two laws as it sought to regain authority over the management and utilization of geothermal resources in the region.

The Court said in its ruling that the central government authority over the management and indirect utilization of geothermal resources for electricity generation does not contradict with the country?s 1945 Constitution.

Yunus Saefulhak, Director of Geothermal at the Ministry of Energy and Mineral Resources, was quoted by a ministry statement as welcoming the Court?s ruling. ?Technically, geothermal must be managed as a system which can?t be separated by provincial or regency cross borders,? he said.

The East Java provincial and regency administrations were seeking to regain authority over the geothermal resources located in the regions which has been taken over by the central government following the introduction of the two aforementioned laws.

Indonesia holds the world?s second largest geothermal reserves, but so far only about 10 percent has been utilized for electricity generation. The government is seeking to lure fresh investment into the sector to help increase electricity supply as well as meet its target for renewables to account for 23 percent of the country?s energy mix by 2025.

Editing by Reiner Simanjuntak