Indonesia Government policy on geothermal

energy and its investment opportunities

Authors:

Akbar Prima Jaya

Geological Engineering-Institut Teknologi Bandung
Akbar.prima.jaya@students.itb.ac.id

Wahyu Utomo
Petroleum Engineering-Institut Teknologi Bandung
wahyu_utomo@students.itb.ac.id

Muhammad Reza ramdhan

Geological Engineering-Institut Teknologi Bandung
E rezha_here@yahoo.co.id

Keywords: Geothermal

energy, Indonesia, Geothermal

Development project, Energy policies, Investment

Conference topics:
Policies and trends
Renewable Energy

ABSTRACT
Indonesia has the largest geothermal potential in the world
(40% of world reserves), but only 5% had been utilized for power
plant, or about 2% of the total domestic demand for electricity. The
current total potential of geothermal in Indonesia is about 28,835
Mwe and mostly used in electrical power plant. In Indonesia has
been implemented in a number of power plants units known as
Kamojang, Lahendong, Sibayak, Gunung Salak, Darajat, Wayang
Windu, Dieng, etc. The government continues to aggressively
develop the use of geothermal energy by the Law No. 30/2007 on
Electricity to emphasis on diversification and conservation of
energy. Additionally, according to Revision Act of the Law No.
21/2014 concerning geothermal, Minister of Energy and Mineral
Resources provide the legal certainty of the acceleration of
geothermal utilization permit within production forest, protected
forest, and conservation forest by Forestry Minister. The new policy
based on minister law allow such as foreign ownership up to 95%,
access to geothermal resources through a preliminary study,
participating bidding mechanism, and the existence of clear
regulations. Nowdays, Indonesia has power plant capacity reached
1,719 MWe, and the government intend to increase the capacity up
to 12000 MWe in 2025. The Investment opportunities in this field
perhaps quite profitable due to the construction of the power plant
will increase too. In this paper will be presented regarding to the
economic studies in the development of Indonesia's geothermal
potential reserves and profit investments. In addition, this study also
includes feasibility studies and financial risk investment studies
based on program MP3EI (Masterplan for Acceleration and
Expansion of Indonesia's Economic Development). Therefore,
conclution should be reached, whether investment of geothermal
energy development is favorable for investors.
26 January 2015 (Modified)

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