Forestry Ministry considering issuing new geothermal regulation

The Forestry Ministry is considering issuing a government regulation as the legal umbrella for the use of water for the development of geothermal resources for power generation.

The ministry?s secretary general Hadi Daryanto said in Jakarta on Friday that rather than revising the natural conservation regulation, which would take longer time, the issuance of the government regulation is considered to be more effective.

He said that such a regulation would be needed to ensure certainty to investors willing to develop geothermal power plants. According to him, the water is used to move the turbine to generate the power from geothermal.

The government plans to use the country?s rich geothermal resource to generate electricity. Indonesia?s geothermal resources are is estimated to reach 25,710 megawatt or equivalent to 19 billion barrels of oil.

Hadi said that the existing geothermal power plants could only produce 1,189 megawatt (MW) or only 4.3 percent of about 9,500 MW to be produced by 2025.

State electricity company PT Perusahaan Listrik Negara (PLN) and PT Pertamina Geothermal have recently awarded four contracts to private investors to build geothermal power plants in Central Java, North Sumatra and Lampung. The projects are partly financed by the World Bank.

The total investment for the four projects is estimated to reach US$8,6 billion. The projects which would produce 2,885 MW, will be able to help cope with the power shortage estimated to reach 4,900 MW. (*)