Feed-in tariff for geothermal energy to be finalized this month

The Jakrta Post – Jakarta. The government is set to introduce a feed-in tariff mechanism this month to push down the huge costs and limit the risks of geothermal exploration, in efforts to reach the country’s target of generating 7,000 MW of electricity from geothermal sources, a ministry official has said.

The new policy aimed to provide security for investors as geothermal exploration accounted for 60 percent of the investment costs, Yunus Saefulhak, the Energy and Mineral Resources Ministry’s director of geothermal energy, said Sunday.

“In future, the auction of geothermal work areas will not be based on price anymore, but according to the work program and exploration commitment,” he said.

The feed-in tariff policy obliges energy suppliers to purchase electricity produced from renewable energy at fixed costs. At present, the only off-taker available is state-owned electricity company PLN.

“The draft regulation is already at the State Secretariat, waiting to be signed by the President. Most probably, [the regulation will be issued] this month,” Rida Mulyana, the energy and mineral resources director general for Renewable Energy and Energy Conservation said.

The government is seeking to maximize the use of geothermal energy, which currently contributes to only 5 percent of electricity generation nationwide. The country’s geothermal energy potential is some 29,000 megawatts. (win/dmr)