New geothermal law to be completed this year

The government said it aims to conclude the revision of Law No 27/2003 on geothermal in May or June of this year to help accelerate the development of geothermal projects in the country.

?With the issuance of the (new) law, it is expected that all problems which have hampered geothermal development such as the issue of overlapping (of concession) can be resolved,? said Director of Geothermal at the Directorate General of New and Renewable and Energy Conservation, Tisnaldi in a statement on Thursday.

He added that with the introduction of the new legal umbrella, the past issue of selling price of geothermal energy should no longer be an obstacle to developing geothermal project

?We have teamed up with the World Bank and Asian Development Bank in conducting study of the pricing, while also involving PLN (state utility), Ministry of Finance, (geothermal) developers, and (industry) associations. It is expected that over the next two days, there will be a final report from WB and ADB,? Tisnaldi said.

The results of the study, according to him, will be used by the government as a basis to determine regulation on the selling price of geothermal energy. ?We want the price to be attractive so that in future tender (of geothermal working areas) there will be serious and capable participants to develop geothermal,? he explained.

He added that his year the government plans to hold tender for at least five geothermal working areas.

Meanwhile, Vice Minister of Energy and Mineral Resources Susilo Siswoutomo said that to date, the development of geothermal working areas with combined capacity of 2,500 MW have been hampered due to various problems including the issue of selling price, licensing, and lack of capital of the developers. The government has set a target to develop geothermal power plants with total capacity of 6,500 MW until 2025.

Chairman of the Indonesian Geothermal Association (API), Abadi Poernomo said that of the government?s target of 6,500 MW capacity, so far only 1,341 MW has been developed and entered the national electricity network. ?Within 10 years period, we must achieve the remaining 5,200 MW,? he said, while adding that the development of a geothermal project requires 7-8 years to complete. ?On average, we can develop about 500 MW a year.?

Editing by Reiner Simanjuntak