New geothermal legislation in Indonesia expected for April 2014

New geothermal legislation in Indonesia expected for April 2014 Jakarta, Indonesia (source: flickr/ yohanes budiyanto, creative commons)
Alexander Richter 13 Dec 2013

New geothermal legislation, expected to pass in April 2014, is to remove the association between geothermal and mining activities making development of geothermal resources easier and will also call for state owned companies to develop geothermal sites currently unattractive to investors.

Having reported about the continued struggle to move on development of its abundant geothermal resources, Indonesia is now expected to pass a new piece of legislation. The legislation is hoped to help Indonesia to develop its geothermal potential by removing a number of current obstacles to increased development.

As reported by the Jakarta Post, “Asep Sugiharta, an official dealing with forest protection and biodiversity conservation at the Ministry of Forestry, said a proposed bill, which has been submitted to House of Representatives Commission VII, which oversees energy affairs, is set to become a landmark in the development of the energy business in Indonesia.

He said the bill was expected to become law in April next year.

“We’re not purposely trying to be an obstacle to geothermal development, but our key principle is maintaining forest conservation,” Asep said in Jakarta. He was one of the speakers at an event organized by the World Wide Fund for Nature.

The WWF recently launched the second edition of its report titled Sustainability Guidelines for Geothermal Development in Forest Areas. Under current law, geothermal exploitation is described as a “mining activity,” which means it is restricted from conservation areas.

This is a major hurdle in the development of geothermal energy as the majority of resources are located in conservation areas, which are strictly supervised by the forestry ministry.

The new law is aimed at removing the association between geothermal and mining activities.

Despite having the largest potential for geothermal energy in the world, with an estimated 29 gigawatts of electricity, only 5 percent, or around 1,340 megawatts, of Indonesia’s geothermal resources are being exploited, according to a finding by the energy ministry.

Ridha Mulyana, director general for renewable energy at the Ministry of Energy and Mineral Resources, said geothermal resources were crucial in the production of renewable energy. Around 70 percent of the country’s geothermal resources are located under volcanic areas or inside conserved forests.

Rida also recently unveiled eight revisions to the current law on geothermal energy. First on the agenda is to change the status of geothermal from “mining.”

With these revisions, geothermal activities will be permitted in forests that currently enjoy protected or conservation status.

Another revision calls for the government to appoint a state-owned company or organization to develop geothermal sites that are unattractive to investors.”

Source: The Jakarta Globe