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Developments in Geothermal Energy in Indonesia
Developments in Geothermal Energy in Indonesia
Developments in Geothermal Energy in Indonesia
Developments in Geothermal Energy in Indonesia
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Developments in Geothermal Energy in Indonesia

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Presented by Asclepias Indriyanto, Indonesian Institute for Energy Economics

Presented by Asclepias Indriyanto, Indonesian Institute for Energy Economics

Published in: Technology, News & Politics
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  • 1. Notes on the Development of Geothermal in Indonesia Generating Dialogue Clean Energy, Good Governance, and Regulation Forum Singapore, 16-18 March 2008 Asclepias Rachmi S. Indriyanto Indonesian Institute for Energy Economics
  • 2. Geothermal Development (1) <ul><li>Large estimated potential, low realization </li></ul><ul><li>Most of existing capacity was the result of PD 45/91, which targeted to develop 4500 MW </li></ul><ul><li>During the Asian Financial Crisis, various geothermal development contracts and price agreements were suspended. </li></ul><ul><li>They were later renegotiated or cancelled; eventually negotiation agreed on lower price; but still many projects are not progressing. </li></ul>
  • 3. Geothermal Development (2) <ul><li>Recent progress: </li></ul><ul><li>2003: Law 27/2003, the only RE governed by its own law </li></ul><ul><li>2004: Geothermal Blueprint </li></ul><ul><li>2005: Establishment of Directorate of Geothermal Enterprise </li></ul><ul><li> Supervision & Groundwater Management, to strengthen sector </li></ul><ul><li> management </li></ul><ul><li>2006: Master Plan Study for Geothermal Power Development </li></ul><ul><li> in Indonesia (funded by JICA) </li></ul><ul><li>2007: Exemption of import duties for geothermal exploration </li></ul><ul><li> equipments and exemption of taxes for exploration activities </li></ul><ul><li>But SOE are still facing significant hurdles, and low participation of commercial financing and private sector </li></ul>
  • 4. Geothermal Development (3) <ul><li>Challenges: </li></ul><ul><ul><li>Economics: </li></ul></ul><ul><ul><ul><li>High initial costs to develop geothermal energy </li></ul></ul></ul><ul><ul><ul><ul><li>Remote areas, limited infrastructure </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Drilling deep wells </li></ul></ul></ul></ul><ul><ul><ul><li>Subsidized prices of fossil-based energy (petroleum fuels, and electricity mostly generated from fossil energy) </li></ul></ul></ul><ul><ul><ul><li>Environmental benefits are not included in cost calculation </li></ul></ul></ul><ul><ul><li>Regulations: </li></ul></ul><ul><ul><ul><li>Alignment of upstream and downstream regulations </li></ul></ul></ul><ul><ul><ul><li>Required set of implementation regulation for Law 27/2003 </li></ul></ul></ul><ul><ul><ul><li>Alignment with Forestry regulation (national parks, boundary of various forest categories, overlap uses) </li></ul></ul></ul><ul><ul><ul><li>Role of local government in geothermal undertakings </li></ul></ul></ul><ul><ul><ul><li>Procedure for tender & licensing </li></ul></ul></ul><ul><ul><ul><li>Incentive for research & development, improve capacity of local contents </li></ul></ul></ul><ul><ul><ul><li>Road map & master plan on energy mix is not binding </li></ul></ul></ul>

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