Indonesia drafts new rule on geothermal energy, focusing on reducing exploration risks

JAKARTA (rambuenergy.com) – The Energy and Mineral Resources Ministry is drafting new ministerial regulation aiming at luring investment in the geothermal energy and reducing exploration risks, a senior official at the energy ministry said.

Director for Geothermal Energy at the energy ministry Yunus Saifulhaq said exploration in geothermal energy is a high risk activity. Therefore, the government is planning to takeover the exploration activities to prove geothermal reserves. Once reserves are proven, the working area is then offered to investors.

Based on the Law No. 21, 2014, the government is preparing to issue new polices in the upcoming regulation. First, the government will assign a state owned company to obtain Working Area without tender. Second, conducting exploration commitment tender with feed-in-tariff and third, limited auction, in which the government offers freedom to investors or developers to  choose location, so that they can conduct preliminary survey and exploration. In this third option, an entity or company will be given assurance that the future development of the working area remains in the hands of the company.

Yunus made the comment while accompanying  House members during a visit to Tomohon town in North Sulawesi, about 40 km from Manado to the south. They visited Lahendong geothermal power plant. PLTP Lahendong is now developing Unit 5 and 6 with capacity of 20 MW each.

PLTP Lahendong Unit I (20 MW) began commercial operation on Aug. 21, 2001, followed by PLTP Unit 2 on April 7, 2009 and then PLTP Lahendong Unit 3. Lahendong Unit 4 began commercial operation on 23rd December 2011. The electricity from PLTP Lahendong is supplied to PLN power grid. The power plant supplied 40 percent of electricity needs of North Sulawesi at present.

Lahendong Unit 5 is scheduled to begin commercial operation on Dec. 26, 2016 and Unit 6 in July 2017. (*)