Alternative Policy Solutions for Geothermal Development in Indonesia

Abstract

Two hundred and seventeen geothermal prospects have been identified in Indonesia with total potential of 19,658 MW. Geothermal energy is a renewable, non exportable and clean energy resource.
To date, however, only 647 MW of Indonesia's total potential has been developed. Although in its diversification policy the Government of Indonesia has made geothermal one of the preferred domestic energy resources, the industry feels the government does not provide a suitable climate or sufficient incentives for further geothermal development.
This paper discusses Alternative Policy Solutions for Geothermal Development in Indonesia using a Rationalist Method developed by D. L. Weimer and A. R. Vining (in Policy Analysis-Concepts and Practice, Prentice Hall 1989). The Method starts with identifying issues of market, distribution and governmental problems. Then the alternative policy solutions of market mechanism, incentive, rule, non-market supply and insurance are analyzed.