Can Geothermal Regulation Enhance (TECHNICAL) Innovation –

Abstract

Indonesia and New Zealand offer a good comparison, since both countries have a long history of large scale geothermal development of high temperature geothermal resources.
When considering the types of plants historically installed, in New Zealand there was a wide range of technologies adopted. In Indonesia there is virtually only installation of single-flash condensing steam turbines (mainly in 55 MWe units). This paper contends that this difference can be in large part explained by the type of regulations and policies (resource access, electricity market; and environmental policy) that were in place.
We conclude that regulation and market settings can enhance or inhibit innovative solutions in (geothermal) energy projects and derive some potential lessons for NZ and Indonesia. In neither case are the adopted solutions always the most technically or economically efficient. There may be good policy reasons for the choices adopted but it is as well to make these explicit. The same general principles will apply to other countries as well.