House Passes Geothermal Bill

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  • TEMPO.CO, Jakarta - The House of Representatives (DPR) plenary session yesterday passed the bill on Geothermal Energy. Mulyana Rida, director general of Renewable Energy and Energy Conservation, said the Geothermal Law streamlines the process for geothermal licensing, where—in the past—had to go through both the central and local governments.

    "With the new law, geothermal licensing and work area auctions will be directly handled by the central government," she said in the DPR building yesterday.

    In addition to the simplification of licensing process, the law also changed the term 'mining'. In the old regulation, plenty of geothermal projects could not get a permit because they are categorized as a mining activity, which are prohibited from using conserved forest areas. Removing the term 'mining' will allow geothermal contractors to work on forest conservations.

    Another difference is the greater benefits for local governments in the form of local revenues (PAD) as a production bonus. Rida said the production bonuses can curb bribery practices in auctions and provisions.

    In two years after the passing of this bill, the government will publish three complementary regulations regarding direct use, indirect use, and production bonuses in the geothermal sector.

    DPR's chairman of the special committee for Geothermal Bill, Nazaruddin Kiemas, said the new rule is necessary because of energy demand continues to increase. He said that the development of geothermal energy has a huge potential. From 299 geothermal sources worldwide—with 28,617 megawatts of energy potential, only 4.7 percent has been developed.