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Indonesia extends period of tender for three geothermal working areas

Caldera of Mount Galunggung, Indonesia (source: flickr/ buitenzorger, creative commons)
Alexander Richter 25 Nov 2019

Not having been able to close the tender for three geothermal working areas in the set time period, the Indonesian government has extended the auction until December 9, 2019. The areas being tendered are Lainea WKP, Gunung Willis WKP, and Gunung Galunggung WKP.

The government through the Ministry of Energy & Mineral Resources (ESDM) has announced the extension of the auction period of three geothermal working areas (WKP) from 13 November to 9 December 2019. Previously, the three WKP auction took place from October 22 to November 12.

The three WKPs being auctioned by the government are Lainea WKP, Gunung Willis WKP, and Gunung Galunggung WKP.

Director of Geothermal of the Ministry of Energy and Mineral Resources Ida Nuryatin Finahari said the three WKPs had been extended for the auction because there were no business entities registering (for the tender). However, he admitted that there were already a number of potential investors both from within and outside the country asking for the auction, and that there will be an evaluation after the auction process is complete.

Meanwhile, Chairperson of the Indonesian Geothermal Association Prijandaru Effendi considers it reasonable if the WKP auction process is extended. Because, investing in geothermal is basically not easy. The tender process for each project in the sector also generally requires relatively little time.

There are various aspects that are considered by potential investors when participating in the WKP auction. Starting from the potential geothermal reserves, the prospect of demand for energy, the concepts and strategies for developing geothermal projects, the costs that must be prepared, until the risks that must be faced by investors.

“Investors definitely want a return on investment in geothermal. But before that, they must consider many things on paper, “he said.

To invite many investors to the geothermal energy sector, the government needs to sit together and understand what the wants and needs of investors are. Then, the government must put it in the form of rules that are conducive to the country’s geothermal industry.

In this case, the government can make new regulations or change some points on existing rules, so that they can accommodate and provide certainty to geothermal developers in Indonesia.

“So far the government has been quite open and often shares with associations. Just progress in the future ahead that needs to be waited for, “he explained.

The Lainea working area has a size of 15,620 hectares and potential geothermal reserves of 66 MW.

Source: Kontan (1) and Kontan (2)