Indonesian govt allows geothermal development in conservation areas

Jakarta (Indonesia Window) – The Indonesian Ministry of Energy and Mineral Resources allows the development of geothermal power plants in areas of production forest, protected forests, and conservation forests through the Law Number 21 of 2014 concerning Geothermal Energy.

“In addition, we also call on geothermal energy contractors to make programs on public welfares and corporate social responsibility besides encouraging provincial and district administrations to use regional incomes from production bonuses,” Indonesian Minister of Energy and Mineral Resources Arifin Tasrif said in a statement received by Indonesia Window here on Wednesday.

The government also encouraged the regional-based geothermal development through the Flores Geothermal Island (FGI) program to meet the need of geothermal electricity in Flores, East Nusa Tenggara province, the minister added.

The program will also be applied in other areas when the FGI program runs well,” he said, adding that to draw investment in the geothermal energy sector, the government provides various incentives in the fiscal sector including tax allowances, exemption from property tax and import duty.

According to Minister Arifin, in a bid to reduce risks contractors may face, the government initiates a scheme on the development of geothermal power plants in which exploration activities are conducted by the government.

The government is also preparing a presidential regulation to readjust the prices of renewable energy in an effort to attract investors in the sector of new and renewable energy including the geothermal energy, the minister said.

The mixed energy of the new and renewable energy was targeted to reach 23 percent by 2025 when the energy consumption per capita touches 1.4 tons of oil equivalent (ToE) and the electricity consumption per capita reaches 2,500 kWh (kilo watt per hour).

“In 2050, the mixed energy of the new and renewable energy was projected to increase up to 31 percent with the energy consumption per capita and the electricity consumption per capita reaching 3.2 ToE and 7,000 kWh respectively,” the minister said.

Reporting by Indonesia Window