Geothermal law revision expected to be completed next year
Thursday, December 12 2013 - 06:30 AM WIB
The ongoing amendment of the geothermal law by the House of Representatives and the government is expected to be completed in April next year.
Rida Mulyana, Director General of New and Renewable Energy and Energy Conservation at the Ministry of Energy and Mineral Resources, said on Thursday that one of the points which are being revised is regarding the definition of geothermal business.
Under Law No. 27/2003, geothermal business is categorized as ?mining business?. As such it is considered unfriendly to the environment and is consequently opposed by many conservationists. As a matter of fact, geothermal business is friendly to the environment, according to Rida.
?This has become obstacle,. Thus we shall remove the word ?mining? in the new law,? she said in a seminar on geothermal in Jakarta.
She said 40 percent of the world?s geothermal resources are located in Indonesia but only 4 percent of the resources have been developed. Furthermore, 21 percent of the resources are located in conservation areas.
The second new point that will be included in the revised law is that the government will directly and indirectly collaborate with investors in developing geothermal projects. Next, the government will assign state owned firms or other governmental agencies to develop geothermal resources which are not interesting for investors, for instance those located in remote areas.
In addition, geothermal business areas will be categorized as conservation areas.
Furthermore, the licensing of geothermal will be wholly handled by the central government. There will a strict regulation regarding transfer of share in geothermal business in order to prevent the geothermal license holders from easily selling their licenses without doing anything.
?They can sell the shares provided that they have carried out exploration activities,? she said.
The revised law will also allow the regional governments to have a 10 percent participating interest in geothermal projects in their areas. The law will also stipulate that the existing working areas which have yet to be developed should be transferred to other parties.
Editing by Johannes Simbolon