A Review of Geothermal Pricing Policy and Its Impacts on Geothermal Development in Indonesia

Abstract

Geothermal power development in Indonesia has been started in the early 1910s to 1970s where numbers of geoscientific explorations and shallow exploration drilling had taken place in Kamojang. Geothermal Power Plant Kamojang Unit 1 with the generation capacity of 30 MW is the first Geothermal Power Plant in Indonesia which has been operated commercially since 1982 and it has been successfully maintain operations for around 40 years. It has contributed to total of installed geothermal power plants in Indonesia which amounts to 1948.5 MW. Geothermal development in Indonesia, based on issuance of Geothermal Law, can be divided into 2 periods, namely before and after the issuance of the Geothermal Law. Since the issuance of the Geothermal Law in 2003, Government has been fully in charge of regulating geothermal enterprising which was previously undertaken by PERTAMINA. Furthermore, in order to accelerate geothermal development, the Government issued various regulations and policies, one of which was the policy on geothermal pricing. Until now, the government has issued 7 policies on geothermal prices through Ministerial of Energy and Mineral Resources Regulation. This paper will discuss each of these pricing policies in detailed and evaluates the impact of each of these policies on geothermal development in Indonesia