New law on geothermal development still too weak

The newly issued regulation on the development of the country's geothermal resource is still too weak to attract new investors, as the main obstacle in developing the resource remains untouched, according to a senior geothermal expert.

Riki Ibrahim, a geothermal expert and the secretary general of the association of the general power companies, said recently that it would be still difficult to attract new players if the government still maintains the subsidy in fuel sales.

"How could geothermal will be able to compete if the subsidy in the fuel and gas sales are still maintained," Riki was quoted as saying by Neraca daily.

The regulation, which is based on a presidential decree, is also too weak to anticipate the long term development of the country's geothermal resource because as a presidential decree it could only last for five years.

"The presidential decree will last only for five years not for long-term process," he said, adding that if the government was really serious in developing the geothermal resource, the regulation should be upgraded into a law.

The new regulation announced by the government recently mostly deals with the transfer of the authority in developing and managing the geothermal resource from the state oil and gas company Pertamina to provincial governments.

But Riki said that the regulation still lacked clarity on how the provinces will manage the resource. (*)