| Title | Encouraging Geothermal Investment in Indonesia Through a New Business Scheme |
|---|---|
| Authors | Havidh NAZIF, Ida Nuryatin FINAHARI, Andi SUSMANTO |
| Year | 2020 |
| Conference | World Geothermal Congress |
| Keywords | PSPE, preliminary survey, exploration drilling, government assignment, business scheme, Indonesia |
| Abstract | The Indonesian government has committed to reducing greenhouse gas emissions by 29% in 2030. One of the efforts from energy sector is optimizing renewable energy utilization, including geothermal energy. The National Energy Policy targets the utilization of electricity from geothermal energy to reach 9300 MW by 2030. Due to national budget constraints, the government offers Geothermal License to business entities before exploration drilling. Preliminary Survey and Exploration Assignment (Penugasan Survei Pendahuluan dan Eksplorasi/PSPE) is one of the government's breakthroughs to accelerate geothermal energy development through assignments given by the Minister of Energy and Mineral Resources to business entities to carry out Preliminary Survey and Exploration activities aiming at one exploration well as the minimum output. The PSPE should be carried out within 3 years with the aim of finding geothermal reserves that can be developed economically. PSPE is carried out at the expense of the business entities without any reimbursement, but the executors will get the privilege or priority to obtain a Geothermal License after the PSPE is completed. Furthermore, they will be entitled to fiscal incentives for import duty on goods and the exemption of fixed dues. This new mechanism of geothermal development has received a positive response from investors. Offered in the second semester of 2017 until the end of 2018, the new mechanism has managed to get 8 (eight) business entities assigned by the Ministry of Energy and Mineral Resources. The PSPE holders are investors from the US, China, Turkey, Brazil, Philippines, and Indonesia, with an expected total investment amount of around US$135 million in the next three years. This paper lays out the guidance and process of PSPE in order to accelerate geothermal development in Indonesia. |