ESDM waiting on new regulations for auctions on geothermal working areas in Indonesia

City skyline Jakarta, Indonesia (source: flickr/ Charles Erbianco, creative commons)
Alexander Richter 21 Feb 2020

With plans for an auction of five geothermal working areas (WKP) in Indonesia, the Ministry of Energy and Mineral Resources is holding back as it is waiting for new regulations that could help make investment in the sector more attractive.

The Indonesian Ministry of Energy and Mineral Resources (ESDM) said that this year’s geothermal working area (WKP) auction is still waiting for new regulations. The government is drafting rules to make investment in the sector more attractive.  The new rules also aim to reduce electricity prices from geothermal power plants.

“The main thing is we are still focusing on drafting regulations on how the government can take exploration risks so that the price of geothermal economics can decrease,” Geothermal Director Ida Nuryatin Finahari said at the Energy and Mineral Resources Ministry Building.

This year, the Ministry of Energy and Mineral Resources plans to offer five WKPs in the form of auctions and assignments to State-Owned Enterprises (SOEs). However, Ida has not been able to disclose the geothermal working areas (WKP) that will be offered. In the previous auction, Ida said the three WKP offered saw no interest by investors.

The three WKP in question are, Lainea WKP, Gunung Galunggung WKP, Gunung Wilis WKP. She suspects that the auction was lacking in interest due to the price of geothermal electricity as stipulated in Minister of Energy and Mineral Resources Regulation No. 50 of 2017 is less attractive in business for investors.

“We will re-evaluate what makes it unattractive. Then this year we will guess which locations we will offer. But it depends on the new Geothermal Candy,” he said.

Source: KataData