Red tape hampers geothermal energy development

The Jakarta Post – Jakarta. Despite Indonesia’s abundant potential geothermal energy, industry players were discouraged from investing in the sector due to excessive red tape in the country, an energy analyst has suggested.

Jakarta-based think-tank Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa said the issuance of multiple regulations at the regional level – as a result of decentralization – had created multi-layered bureaucratic challenges for investors interested in developing geothermal energy.

“It could take years for investors to obtain an exploration permit,” he said during a public discussion on Sunday in Jakarta.

“Investors who initially planned to complete their projects within five years, for example, would be discouraged as they had to bear the extra cost of highly probable project delays.”

Indonesia is thought to have around 29 gigawatts (GW) of geothermal potential and the government has targeted geothermal energy production of 7,156 MW by 2025. This would make Indonesia the biggest producer of geothermal energy in the world.

Current electricity capacity from geothermal energy is around 2,650 MW, making up 5 percent of the total installed power plant capacity of about 53,000 MW.

Rida Mulyana, the Energy and Mineral Resources Ministry’s new and renewable energy director general, said he was aware of the problem but it was out of the ministry’s control.

“Two-thirds of the time used on licensing is spent with regional administrations,” he said.

The ministry, however, said it was committed to streamlining bureaucracy from its side.

“Previously, the ministry required 29 permits for geothermal energy, but this has been slashed to five now” Yunus Saefulhak, the ministry’s director of geothermal energy, said. (win/hwa)