House starts drafting geothermal bill

Adianto P. Simamora, The Jakarta Post, Jakarta

The House of Representatives has started drafting the geothermal power bill and hopes to finalize it by the end of this year.

Rustam Tamburaka, chairman of the House's team for the drafting of the bill, said the House considered the bill important given that Indonesia had huge geothermal resources and that only a small amount of these had been developed.

The bill aims to lure foreign investors into the country's geothermal sector, Rustam said.

"We are now seeking input from all sides to make sure that the new law can serve as a benchmark for the development of the country's geothermal power industry in the future," Rustam said.

The Commission held a meeting on Monday with PT Indonesian Power, the power generating unit of state electricity company PT PLN, the Indonesian Geothermal Association (INAGA) and PT Amoseas, which is a geothermal power producer owned by American energy firm ChevronTexaco.

The Commission also had plan to invite govern officials, activists and experts from universities to contribute to the drafting process, Rustam said.

The bill is among the few bills proposed by the House as most bills have come from the government.

Two weeks ago, the House passed the power law, but it mostly regulates power generation, distribution and marketing, and does not specifically deal with geothermal sector.

Gothermal energy refers to underground steam that can be used to generate power. It is considered an environmentally clean energy source.

Geothermal resources were under the supervision of state-owned oil company Pertamina until May 2000, when the government issued a regulation transferring supervisory powers to the local governments.

Pertamina had awarded several contracts for foreign investors to develop the country's geothermal resources but most of these were postponed in 1998 due to the economic crisis.

INAGA data say some 40 percent of the world's geothermal resources are located in Indonesia, which could potentially produce some 20,000 megawatts (MW) of electricity.

Now, Indonesia has a number of geothermal power plants with a combined capacity of 747.5 MW. The plants are located in Kamojang, Salak, Darajat and Wayang Windu in West Java; Lahendong in North Sulawesi and Sibayak in North Sumatra.