Indonesia easing licensing for forest use

Wayang Windu Unit II, Indonesia (source: Aecom)
Alexander Richter 18 Apr 2010

After introducing tax breaks, the Indonesian government has now started to ease licensing for forest use for geothermal projects to speed up geothermal development in the country.

Reported from Indonesia, “Following tax breaks, the government has moved to ease licensing for forest use for geothermal projects to speed up its implementation to build support for clean energy sources.

Forestry Minister Zulkifli Hasan pledged that his office would issue licenses to use forests for geothermal projects in days, rather than the normal process that takes months.

“We are now preparing regulations to speed up the licensing process for geothermal exploitation of deposits in forests,” Zulkifli said after opening the IndoGreen Forestry Expo on Thursday.

The event, which runs until Sunday at the Jakarta Convention Center, showcases products, information and services related to forests.

Forestry and mining companies are taking part in the event to show their forest management concepts and conservation programs.

The event will also feature discussions on topics such as Indonesia’s strategy to reduce emissions from the forestry sector, good mining practices and the development of communal forests.

The ministry predicts that about 70 percent of the country’s geothermal deposits were located in protected and conservation areas.

Indonesia has the world’s largest estimated geothermal reserves with the capacity to generate 28,100 megawatts (MW) distributed in 265 sites across the country.

With climate change topping environmental issues, geothermal energy is being seen as a clean substitute for fossil fuels.

Indonesia currently relies heavily on coal for electricity generation.

The government has taken several steps to encourage investors to develop geothermal energy.

The Forestry Ministry has issued regulations allowing investors to exploit geothermal reserves in protected forests. Potential investors, however, are limited to mining underground in the forests.

The Finance Ministry has set up a working group on fiscal policy on climate change with the main focus of promoting clean energy sources. The ministry also aims to encourage environmentally friendly technology by providing tax incentives.

Ministry data showed that the government would collect an estimated Rp 624 billion in taxes this year from geothermal projects.

Head of the ministry’s working group on fiscal policy on climate change, Singgih Riphat, said the government also planned to offset risks for investors during exploration.

He said that the working group was still hammering out the details of financial risk during the exploration phase that could be covered by the state budget.

The National Energy Policy estimated that energy from geothermal sources would reach 9,500 MW by 2025 to support the government’s plan to cut emissions by 26 percent by 2020.

Environmental activists have voiced support for the development of geothermal projects, but they warned that massive geothermal projects in protected areas could also damage forests.”

Source: The Jakarta Post