New geothermal legislation passed in Indonesia
JW Marriott, Jakarta, Indonesia (source: flickr/ Aktiv Phil, creative commons)
Francisco Rojas
26 Aug 2014
The anticipated legislation has been passed and has declassified geothermal as a mining operation, opening the forested areas to exploration and exploitation while increasing the price tariffs that will make it more attractive to invest in.
Following yesterday’s statement by the Minister of Mineral Resources of Indonesia, the law that allows geothermal projects to be exploited in forest areas has been passed.
According to a recent news piece, the new law finally takes out geothermal out of the “mining activities” sector and allows it to be fully explored. Indonesia has nearly 40% of the worlds geothermal potential and is currently being being barely tapped.
Regarding the new piece of legislation, “it stipulates that exploration for geothermal energy and development of plants is no longer considered mining. It was regarded as such previously, which meant the industry faced problems working in Indonesia’s vast tracts of protected forest, where there is much geothermal potential but mining is illegal.The law also stipulates higher prices for electricity produced by geothermal, following complaints from companies developing plants that tariffs were not enough to cover the high cost of production.”
By allowing higher prices, geothermal can tackle one of its greatest weaknesses, the relative high cost of exploration and early stage development.
The benefits not only apply to energy generation or better competitiveness. The same source states that “Indonesia is the world’s third-biggest greenhouse gas emitter due its use of dirty fuels to produce electricity and to rampant deforestation.” so by allowing geothermal to flourish, reliance on oil and reduction of green house emissions can be effectively addressed.
To read the full article, please follow the link below:
Source: MSN News Website
