Government facilitates investors to develop geothermal energy

Government facilitates investors to develop geothermal energy

A citizen carries manure on the farm around the geothermal well installation of PT Geo Dipa Energi in the Dieng Plateau area, Kepakisan Village, Batur, Banjarnegara, Central Java, Wednesday (19/8/2020). ANTARA FOTO/Anis Efizudin/wsj/ac.

Jakarta (ANTARA) - The Ministry of Energy and Mineral Resources, through innovations and breakthroughs within existing regulations, has made it easy for contractors and investors to develop geothermal energy in Indonesia.

Such measures encompass the issuance of Law Number 21 of 2014 on Geothermal that regulates development of geothermal power plants in areas of production forests, protection forests, and conservation forests.

"Furthermore, we encourage geothermal contractors to conduct Corporate Social Responsibility activities as well as prompt local governments to optimize the use of regional earnings from production bonuses," Minister of Energy and Mineral Resources Arifin Tasrif noted in a statement received here, Wednesday.

The government also called for regional-based geothermal development through the Flores Geothermal Island (FGI) to fulfill power demand in the island of Flores from geothermal and optimizing non-direct utilizations.

"Later, this program will also be applied in other areas, after the FGI runs well," he noted.

In order to attract investment in the geothermal sector, Tasrif noted that the government had offered various incentives in the fiscal sector, such as tax allowances, exemption from Land and Building Tax (PBB), and import duties.

Meanwhile, to reduce contractor risk, the government also initiated a geothermal power plant development scheme in which the government will conduct drillings.

"The government provides a geothermal power plant development scheme in which it conducts exploration activities," he remarked.

Currently, the government is also preparing a presidential regulation to regulate renewable energy prices.  

"This is done to attract investment in the renewable energy sector, including in geothermal development," he added.

Indonesia remains resolved to increase its new and renewable energy mix to reach 23 percent by 2025, in which energy consumption per capita reaches 1.4 tons of oil equivalent (ToE) and electricity consumption per capita touches 2,500 kWh.

"Furthermore, in 2050, the energy mix from renewable energy is projected to continue to increase by 31 percent, with energy consumption per capita reaching 3.2 ToE and per capita electricity consumption reaching 7,000 kWh," the minister explained.
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