President set to sign new government regulation on geothermal

President Joko Widodo is expected to soon sign a new government regulation on geothermal business in the country in a bid to help lure new investment in the sector.

Director General of New and Renewable Energy at the Ministry of Energy and Mineral Resources Rida Mulyana was quoted by kompas.com as saying Monday that the final draft of the new regulation has been sent to the State Secretary and is ready to be signed by the president.

He said that the new government regulation, which will replace Government Regulation No 59/2007, will provide certainty for geothermal investors in the country.

He said that as part of implementation of the upcoming new regulation, the Ministry of Energy and Mineral Resources will later issue ministerial decree setting a fixed price for state-owned electricity firm PT PLN in purchasing power from geothermal power plants, thus providing certainty for the investors and clear guideline for PLN in drafting power purchase agreement with the geothermal power plant developers.

Rida said that under the new regulation, the government can also assign PLN to buy electricity output from certain geothermal power plant projects to help accelerate the planned 35,000 MW power plant development project.

Head of the Indonesian Geothermal Association (APBI) Abadi Purnomo welcomes the plan to set up a fixed electricity purchasing price in geothermal power plant projects as it would eliminate price risk for investors. (*)