PLN obliged to purchase geothermal energy

A newly issued governmental regulation on geothermal business has obliged state electricity firm PT Perusahaan Listrik Negara (PLN) to purchase geothermal power to ensure the power availability for the public, Bisnis Indonesia reported on Monday.

The Governmental Regulation No. 19, 2007 was signed by President Susilo Bambang Yudhoyono on Nov. 5, 2007, according to Rp Sukhyar, Expert Staff for Informiation and Commmunication Affairs at the Ministry of Energy and Mineral Resources.

PT Pertamina Geothermal Energy?s Operation Director Suryadharma welcome the new ruling, saying it would give certainty over the purchaser of geothermal power.

"Until now, there is no obligation on the part of PLN to purchase power produced from geothermal steam," Suryadharma said.

He noted however that there should be a mechanism on the purchase of geothermal energy by PLN.

Several executive of geothermal business agreed, saying the government should regulate the sale price of geothermal energy.

Supramu Santosa, one of the executives, said that since PLN wants to buy geothermal power at low price, there should be tax incentives to allow for the development of the geothermal energy business.

Sukhyar emphasized that the sale price for geothermal power would be set based on a ministerial decree. The government expected to issue the price formula before the end of 2007. (*)