| Abstract |
Indonesia geothermal power development is today’s energy to replace fossil fuel and coal for electricity in some regions, particularly Java. The outcome is expected to meet National Energy Policy that is targeted as much as 23 percent of Indonesia’s energy mix by 2025. A political will is significant because energy has become a political instrument. Furthermore, a political will to gain a political commitment for a change in energy policy towards definite achievements: Optimal National Net Benefit, Security of Supply, and National Energy Security. To-date geothermal resources contribute only around 1,100 MW of the total Indonesia power generation capacity of approximate 29 GWe. The government of Indonesia launched the second accelerated 10,000 MW projects in to be commercially operational by 2012-2018 and 48 percents of the projects of which are geothermal power projects, however it has been known that it is impossibly applicable. Before Geothermal Law no. 27/2003 had been established, geothermal projects were majorly executed by PT. Pertamina (Persero) and PT. PLN (Persero) because the construction of a geothermal power plant in Indonesia requires a huge initial cost of the project economics, i.e. upstream side, pipeline system and power plant. There is no option but to give it for state-owned enterprises such as Pertamina Geothermal Energy, PLN Geothermal, GeoDipa and/or PT. Indonesia Geothermal etc. which hold the risk and reward as a support from the government. In Indonesia, law provides normative, conceptual stipulations of regulatory perspectives. Beyond the regulation moreover require time and explanation below the customized conditions at that time. The ego of inter-sectors and the ministries are therefore difficult to manage. This paper focuses business strategies to geothermal development possibly well addressed, coordinated and synchronized for the upcoming new law which is an improvement of prior regulation. Government had proposed Law on Geothermal and its academic drafts to the House of Representatives in 2013. A special committee (Pansus) of several Commissions was then established to discuss the Proposed Law and plan the next agenda over the meetings. It then creates the need to specify the grounds and to look up what natural resources lie in the hands of the Government means. It has been said that founding fathers dreamed Indonesia’s people make the most of their natural resources for the sake of prosperity to the nation. As their own natural resources are a mean to achieve the wealth, a strategy to place the resources under the State is made, known as The State’s Right to Control. Essentially, this aims to affirm that Indonesia’s natural resources only belong to the people and can only be used for their well being. As regulated in Mining Laws, the State’s Mineral Rights serve to maintain the management of subsectors in mining industry and hand Mining Rights over to the Government. This allows the Government to assign state-owned companies in exploration and exploitation with economic rights. If foreign companies are invited to the business, certainly they are entitled to get a profit share in the economic rights. Most geothermal mining areas (Wilayah Kerja Pertambangan or WKP) are located at conserved forests, and those actually violate UU 41/1999. As the discovery hinders a sustainable development in renewable energy, the government needs to amend UU 27/2003. Geothermal will no longer be considered in mining activities. Technical mining terms are strictly rejected in the new Forestry Law to avoid the actual ‘mining activities’ in forestry areas. As the amendment formerly urged work areas to be built at conserved forests, it is highly recommended to redefine the mining terms in Geothermal Law. There are then questions to think about: 1). How can the economic right of companies involved in natural resources management support The 1945 Constitution? Are the current contract systems or Ijin Usaha Penambangan truly a facility, as stated in Law on Coal and Mineral Resources? 2). Can the highest authority in mining activities be incorporated in the central-regional government partnership or solely given to regional governments? In case the central solely holds it, decentralization should be considered, as mentioned in Autonomy Law of 2004, Presidential Decree No. 37 Year 2004. 3). Today central government does not hold the highest authority in mining activities: ‘Law on Coal and Minerals of 2009 and Law No. 27 Year 2003 on Geothermal contradict The 1945 Constitution’. An out-of-box perspective is needed in search of a comprehensive barrier analysis with real-time solutions since Law No. 27 Year 2003 on Geothermal cannot make its way. It turns out that WKP in protected forests is not the only issue to change regulations on geothermal. Others are too, but not limited to geothermal electricity cost, exploration fund, power purchase agreement, inadequate extracted data from Mining Work Area (WKP) to goal a bid, licensing, incentive programs, a low tolerance to approved vendors who abandon their responsibilities, pricing requests and so on. Details are obtainable from the stakeholders. Law review occasionally includes the authority of central and regional government, demand from the regional governments regarding authority, participating interest, a management model to enterprises (Ijin Usaha Penambangan/Panas Bumi or license) and Budget plan of the central and regional government. House of Representative currently also reviewed a Law of Oil and Gas bill to be included in National Legislative Program (Prolegnas) of 2010 but, yet it does not pass the first examination. Geothermal Law was recognized as a part of Indonesia’s 2013 Prolegnas and it even made to the first review/evaluation. The issues mentioned are always involved in the discussion of the two or more laws. Therefore, revision to the mining terms is urgent, so that Amendment UU 27/2003 has the chance to be issued this year or in 2014. On top of that, the new revision to the law can expectedly be the approach to adopt such changes before the 2014’s Presidential Election. Moreover, this paper discusses on the most crucial issues for today’s geothermal development in Indonesia: transaction for geothermal business license and geothermal steam and electricity tariff (total project). The state-owned enterprises such a |