Indonesia:

Government Minister Questions Risk of Geothermal (Jakarta Globe)

Deputy Finance Minister
Bambang Brodjonegoro

While many believe that Indonesian energy policy is on the right path with the development of geothermal alternatives, Deputy Finance Minister Bambang Brodjonegoro says there are risks.

The decision to introduce a feed-in-tariff policy for geothermal energy would put an extra burden on the country’s electricity subsidy costs, according to Bambang.

Bambang refered to a pricing scheme in which the state electricity firm, Perusahaan Listrik Negara (PLN), will pay a set price for electricity produced from geothermal power plants owned and operated by independent power producers.

Depending on the location, the tariff ranges from 10 cents to 18.5 cents per kilowatt hour (KwH), with the Energy and Mineral Resources Ministry planning to raise it further to 11.5 cents to 29 cents per KwH.

Bambang instead proposes to replace the feed-in-tariff with a scheme that acknowledges a price ceiling. “And then the government must also introduce an open, international tender instead of direct appointment, so that we can get the best deal,” he added.

Bambang said that most of Indonesia’s sources of geothermal energy are located in Java and Sumatra, where electricity is being generated by cheap coal. “This situation will put PLN in a difficult position to agree to terms in geothermal energy,” he added.

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