Bahlil Cuts Permits and Offers Incentives to Accelerate Geothermal Development
The government will accelerate the development of geothermal energy. Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said this is being done as part of the strategy for national energy sovereignty and security.
However, Bahlil admitted that licensing is one of the factors hampering the development of New and Renewable Energy (EBT), which has been widely complained about by business players.
“One of the problems is the speed of regulation, permits and all sorts of things,” said Bahlil after attending The 12th Indonesia International Geothermal Convention & Exhibition (IIGCE) at JCC Senayan, Wednesday (19/8/2026).
According to him, Indonesia has considerable potential for geothermal energy. However, only around 10-13% of these clean energy reserves have been utilised.
Bahlil stressed that Indonesia is the country with the largest geothermal resources in the world. However, in terms of implementation, Indonesia ranks below the United States (US).
He revealed that the lack of energy implementation by business players is related to convoluted licensing.
“Since I was appointed as Minister of Energy and Mineral Resources, I checked what makes it slow, because I used to be a business player too. Before I entered government, I was a business player. And after I entered government, I became Minister of Investment. Business players want things to be fast, but if the rules are convoluted and slow, what can you do?” he said.
Therefore, Bahlil has cut regulatory stages that hinder business actors. Nevertheless, these efforts are considered insufficient.
“And now it turns out that after my evaluation, there are still many obstacles to these regulations,” he added.
Bahlil further explained that in addition to improving regulations, he is also collaborating with other ministries regarding incentives, particularly taxation. This is because business players and regulators cannot operate independently.
“I have also checked the economic value. Even though it has reached 9.5 cents per kWh, the association says it is still insufficient. We will provide a breakthrough with tax incentives. So later we will amend the Government Regulation and Presidential Regulation for ease of doing business and incentives for the geothermal sector,” he explained.
Bahlil stressed that business players working in the EBT sector must have strong and serious commitment. The business must be developed quickly.
“For business players who have obtained concessions, they must also move quickly. Do not hold onto the concessions. If they are held, that also slows things down. So let us not be slow and have it only be seen as something done by the government,” he said.
“I always sign temporary suspensions. Temporary suspensions. This is part of the strategy of unscrupulous business players. Thank God if there really is a problem. But I am a former business player, my intuition and sense of smell, I know. This temporary suspension is actually a way to extend your contract period because you have a problem there. Thank God if the problem is with the people. But if the problem is technological or financial, that is a problem,” he continued.
He also asked the National Energy Council (DEN) to help oversee business players working in EBT so that they run their businesses properly and responsibly.
“Permits have been extended once. Some want to be extended twice, and some even want three times. Once we issue a termination, they lobby again. Using this, using this, using this. That is fine, as long as you have commitment. For us in the government, whoever does the work is fine, as long as it is fast,” he concluded.