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Legislatory situation still major obstacle for developers in Indonesia

Legislatory situation still major obstacle for developers in Indonesia Jakarta, Indonesia (source: flckr/ fidzonflickr, creative commons)
Alexander Richter 7 Nov 2013

In Indonesia, legislation still seems to be the main obstacle for more development in the country. The process of receiving permits still requires involvement and individual permits from too many different agencies and the still unclear situation on the proposed new feed-in-tariffs. But the government keeps promising to work on it, one has to see when this happens.

Following on previous articles on Indonesia’s lack of development despite large hopes and promises, it seems like legislation or actually the lack and unclearness thereof, still remains the main obstacle to more development. And yet again government representatives talk about 6 month time frame in which things will be solved, but this has been promised for more than 2 years. There is also no news on a finalization of the announced changes to the the feed-in-tariffs.

“Government is the single prime mover to accelerate geothermal progress,” said deputy chairman of the Indonesia Geothermal Association Sanusi Satar to reporters this week.

Sanusi noted that the government, through state utility Perusahaan Listrik Negara, is the single largest purchaser of electricity generated by private companies in the country, and has the power to set purchase price.

Sanusi also noted that geothermal projects have to clear permits from all levels of government, which presents many potholes for geothermal projects. “It would be ideal if companies could get all the permits under one roof,” he said.

Yunus Saefulhak, the head of the sub-directorate of geothermal services at the Energy and Mineral Resources Ministry, said that the government and the House of Representatives is now revising geothermal law to accommodate a more profitable pricing scheme for developers and to streamline the permits process. “There’s optimism that this law can be resolved by April,” Yunus said.

One of the other obstacles seems to be the group of companies working with coal in Indonesia. There are voices talking about a “coal mafia” that is not interested in geothermal replacing their businesses. Indonesia’s coal-fired power plants are widely spread in Java and Sumatra, where also the greatest potential for geothermal energy development can be found.  If these companies actually boycott development is unclear, but surely their possible opposition does not help.

Source: The Jakarta Globe, Detik Finance