| Abstract |
More than 200 volcanoes are located along Sumatra, Java, Bali and the islands of eastern part of Indonesia, which is known as ‘The Ring of Fire’. Indonesia also known as the world largest geothermal potential resources given rise to large concentration of high temperature geothermal system. The total potential estimated by National Geological Agency of Indonesia (NGAI) is about 27,000 MW. In term of geothermal development and its utilizations, the Government of Indonesia (GOI) is planning to utilize those big energy resource as a leading alternative energy to substitute fossils that may be fulfilling Indonesia’s growing demand for electric power in the next 20 years. Indonesia Geothermal Association (INAGA) and NGAI reported that Indonesia is composed of 256 geothermal potential locations in which is surrounded by 29 locations (2,795 MW) of prospective geothermal energy in which 18 locations (1,205 MW) planned to develop and operated by existing developers mainly composed of Pertamina Geothermal Energy and its partnerships while 3 locations (1,590 MW) have been tendered and 6 others are still waiting for the new bidding. The current geothermal fields operated from 7 locations with total capacity of as a minimum of 1196 MW consists of Darajat (260 MW), Dieng (60 MW), Kamojang (200 MW), Gunung Salak (377 MW), Sibayak (12 MW), Lahendong (60 MW), and Wayang Windu (227 MW). The Direct-use of geothermal in Indonesia is starting to grow since Pertamina Geothermal Energy (PGE) - the subsidiary of Pertamina, state oil and gas company - and National Research Institute (BPPT) launching the Mushroom harvesting project in Kamojang in year 2000 and now PGE work with local Cooperative in Lahendong (North Sulawesi) to develop palm sugar and white copra processing . This is not including spas and developed swimming pools which is uncounted numbers. Some others institution (NGO’s and the Universities) are also on the research progress of direct using geothermal for purifying Akarwangi (the raw materials for perfume). Geothermal (ground-source) heat pump use is not well known in the country. Since the economic crisis affected Indonesia in 1997 and started to recovered in 2003 has affected power sector demand and growth in Indonesia. This has resulted in black out in the whole country which are varies from time to time and from place to place. Furthermore, the changes in the regulatory environment for the geothermal industry and the firm commitment from the GOI are the major issues affecting the future growth of the Indonesian geothermal industry. During the energy recovery situation, GOI is setting a strategy to prepare Indonesia to become independent in meeting its energy requirement. GOI has gradually increased the national electricity tariff, and assessed a differential electricity tariff structure by region to support electricity infrastructure investment with regards to the needs of the region. In geothermal sector, GOI continues to encourage investors by offering incentives in exploration activities, and lessens the amount of risk by allowing the government assessing exploration activities as it is stipulated in the Geothermal Law. Following the issuance of the Geothermal Law No. 27/2003, GOI issued the Government Regulation No.59 Year 2007 regarding the geothermal business activities and Ministry of Energy Decree (MED) No.14 Year 2008 concerning on geothermal energy prices - that focuses on the importance of geothermal energy utilization on top of the utilization of other renewable energy. This decree then revised by MED No.5 Year 2009 concerning on energy price, and on the law protection towards the investor for the maximum use of Indonesian geothermal energy. These policies are issued to support to have a total Geothermal Power Plant Installed Capacity of 9,500 MWe by the year 2025. Cost of geothermal energy produced is slightly lower than those generated from fossil fuel such oil and gas, but still un-compete to that generated from coal fire plant. It is slightly higher specially than those from main mouth fire power plant. Thus, the opportunity to develop geothermal power plant in Indonesia is widely open to private. To support those GOI policies, a local and international companies are now increasing their activities in order to meet the energy demand in power sector. Pertamina Geothermal Energy with its own activities and its partner explore some area which are not produced yet. Some other new company are also involved in exploration stage or even in the development stage of utilize the geothermal power. All activities are supporting the GOI policy to meet the second stage of 10,000MW accelerating power plant project, which are mainly composed of 60% of geothermal. Thus, the opportunity to develop geothermal power plant in Indonesia is still widely open. Finally, in regard to investment substance GOI also expected to be able to maintain Indonesian country risk, to set up competitive basic electricity price, to determine market-demand currency rate, to arrange clear fiscal regulations, and to implement contract sanctity. |