Govt to set up agency to handle geothermal power
JAKARTA (JP): The President is expected to issue a decree later this year to establish a one-stop regulatory agency for the geothermal industry, to encourage power generation using geothermal steam.
"The draft of the presidential decree is now being considered by the State Secretariat. Hopefully, the decree will be issued later this year," the Ministry of Mines and Energy's director general of electricity and new energy development, Zuhal, said yesterday.
Speaking to reporters after opening the Electric & Energy Exhibition 1996 here, Zuhal said that the decree would allow the government to establish a one-stop agency to supervise the development of geothermal businesses in Indonesia.
Zuhal said it was unclear if the agency would be administered by the Ministry of Mines and Energy or by a directorate general of the ministry.
"But the most important thing is that investors will only deal with the planned one-stop service agency in processing licenses in the geothermal industry," he said.
He said investors in geothermal industries now had to deal with the state-owned oil and gas company Pertamina, the state- owned electricity company PLN, the Ministry of Mines and Energy and other government agencies.
"A one-stop service will help investors be more efficient and reduce costs for electricity generation with geothermal steam," he said. He did not elaborate.
Recently, the chairman of the Indonesian Geothermal Association, Prijanto, told The Jakarta Post that investors' main concerns in developing geothermal energy were the costs.
"Relatively speaking, geothermal energy is not yet competitive with other energy resources, such as coal and gas, in generating electricity," he said.
Incentives
He said that if the government gave tax incentives to geothermal energy investors, the cost of generating electricity by geothermal steam could be reduced by 2 U.S. cents to 5 U.S. cents a kilowatt hour (kWh), compared to the average cost of 6 U.S. cents for coal-fired power generation.
But Zuhal said the government would not offer any incentives for the time being: "Our concern is to create efficiency with a view to reducing costs in the geothermal business. And providing a one-stop service is one way to achieve that."
He said the government would hire an energy consultant to study the possibility of reducing the costs of electricity generation using geothermal steam to 6 U.S. cents a kWh or below.
He said the government would continue to help companies develop geothermal resources as an alternative source of electricity in Indonesia, which has rising energy demands.
At the Indonesian Petroleum Association's (IPA) 25th anniversary here Tuesday, President Soeharto said that Indonesia should try its best to delay becoming a net oil importer by exploiting other energy resources, including geothermal steam.
"Unlike other energy sources such as oil, coal and gas, geothermal energy cannot be exported. But if Indonesia maximizes its utilization, the country can save other energy resources for exports," Zuhal said.
Using geothermal steam to operate a 1,000 megawatt (MW) power station can save around 300 million barrels of oil a year. Oil is the country's most common source of energy.
Only 309.5 MW of Indonesia's total geothermal potential capacity of 19,600 MW have been developed. The 309.5 MW are generated by three geothermal power stations in Kamojang and Darajat in West Java and Dieng in Central Java.
The four-day Electric & Energy Exhibition 1996, organized by Mitra Teknologi Indonesia Foundation, features 38 electricity and energy companies and institutions from Indonesia, the United States, Germany, the Netherlands, Austria, Hungary, Britain, Japan and Singapore. (13)