Revision on geothermal tariff pricing regime in Indonesia

Jakarta, Indonesia (source: flckr/ fidzonflickr, creative commons)
Francisco Rojas 25 Sep 2014

According to a recent article in Lexology, the Indonesian Ministry of Energy and Mineral Resources is doing a revision to Regulation 17 affecting the tariff pricing regime in the country.

Following the legislation change in Indonesia announced the previous month, there are more developmeents now regarding a revision on the geothermal tariff. As reported in an article from lawyers of Hogan Lovells law firm, “the Indonesian Ministry of Energy and Mineral Resources also recently issued a revision to the geothermal tariff pricing regime.

The Ministry’s Regulation No. 17 of 2014 (“Regulation 17″) reverts back to a previously used geographically based tariff regime enhanced with an added dimension of the timing of reaching a particular project’s commercial operation date (to cater for inflationary effects).”

The same law firms states that “Regulation 17 also makes clear that the responsibility for constructing transmission lines to connect with geothermal projects rests with the state electricity regulator (PLN). PLN has also been tasked under Regulation 17 to prepare a ‘model’ power purchase agreement (“PPA”) for geothermal power projects.” It will be interesting to see how the new legislation affects the development of geothermal in the country.

To read the full article, please follow the link below:

Source: Hogan Lovells via Lexology