New Presidential regulation positive for geothermal in Indonesia
With the low tariffs for geothermal in the draft of new Presidential Regulations, further incentives as promised in the draft are needed to help ensure project feasibility in Indonesia.
Earlier this month, the Indonesian Geothermal Association (INAGA – API) reported that it considers that the Draft Presidential Regulation (Perpres) regarding tariffs for the purchase of electricity sourced from new and renewable energy (EBT) as quite attractive, so KataData.
However, investors ask for certainty of incentives from regulators in implementing these rules. Head of INAGA-API Priyandaru Effendi said the Presidential Regulation on EBT prices promised incentives in the form of reimbursement of costs for infrastructure development for geothermal power plants (PLTP). However, he still questioned what the reimbursement mechanism would be like.
“How do you do it? Is it certain or is it still another ‘subject to’ ? What we want is that everything promised there is definitely given without a complicated application mechanism,” he said.
The reason is, according to Priyandaru, the PLTP tariff written in the presidential regulation is very low. Thus, the developer needs all the incentives promised in the Presidential Regulation to help ensure project feasibility. In addition, the developer also wants projects that are currently running to continue to use the current rules. One of them is by reaffirming his support in the Presidential Regulation so that the existing obstacles can be resolved. As is known, the Ministry of Energy and Mineral Resources has finalized the Draft Presidential Regulation (Perpres) on tariffs for the purchase of electricity sourced from new and renewable energy (EBT). This regulation will regulate the selling price of EBT electricity with three mechanisms. This Presidential Regulation will regulate the selling price of electricity with a Feed In Tariff (FIT) mechanism , the Highest Benchmark Price (HPT), and the agreed price for electricity from peaker generators .
Director General of EBTKE, Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the implementation of the Presidential Regulation on EBT will be carried out in stages. In the first 10 years, the price of electricity for renewable energy plants will be high, only after 10 years of operation the electricity tariff will decrease. “Later, it will be staging (gradually), the initial price is higher for 10 years, then it goes down,” said Dadan