Indonesia: New Regulations Will Ease Geothermal Energy Exploration

Indonesia drafts new rule on geothermal energy, focusing on reducing exploration risks (rambuenergy.com)

(Courtesy CIA.gov)

The Indonesian 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.

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