The Present and Future Implementation of Geothermal Exploration Risk Sharing Mitigation in Indonesia

Abstract

Geothermal is a clean and renewable energy source and abundant in the “ring of fire” countries. Geothermal has its biggest natural-inherited risks in the exploration stage which require high risk and significant up-front capital. To allow substantial development, various policy instruments are needed to allow exploration risk mitigation measures and a fair risk allocation between the government and the industry. There are a lot of examples of policy supports from countries with a high-rate of success in developing geothermal as main source of renewable energy production. However, each country has its own context, specific conditions and regulations in such best practice from one country cannot be imitated fully to another country. Although Indonesia has one of the biggest untapped geothermal resources in the world, the additional geothermal generation capacity is not at the expected level. This paper will discuss the present and-potentially-future Indonesia risk sharing mitigation to boost geothermal exploration and exploitation. A background on the risk sharing mitigation facilities by the top geothermal producer countries is also presented.