T

he Energy and Mineral Resources Ministry is offering nine new work areas to public bidders for geothermal projects nationwide in a bid to generate more electricity from renewable resources.

Of the total 1,030 potential megawatts (MW) announced on Wednesday, the ministry estimates that the total geothermal capacity to be developed will amount to 550 MW with total investment of around US$2.1 billion.

Indonesia, which lies in the ring of fire, is estimated to have abundant geothermal resources of around 29 gigawatts (GW).

However, the utilization of the potential remains low.

As of the end of 2013, the total installed capacity reached 1,323.5 MW, only around 4 percent of the total electricity produced in the country.

The government is trying to boost the utilization of cleaner renewable energy resources, such as geothermal, to produce electricity, given that most power plants in the country still depend on ever-depleting fossil fuels.

Developing geothermal resources in the country remains problematic for investors, however, due to their locations that are primarily in forests or conservation areas, making them hard to access.

Another issue is the government'€™s ceiling price for electricity generated from geothermal power plants, which is considered by investors to be fairly low to make geothermal viable.

Energy and Mineral Resources Minister Jero Wacik said relevant parties were revising the 2003 Geothermal Law to make work on forest conservation areas legal under the 1999 Forestry Law.

'€œ[In the revision], geothermal will no longer be considered a mining activity so that it can be carried out in forest areas,'€ Jero said during the opening ceremony of the renewable energy and geothermal convention, the EBTKE Conex 2014 and the IIGCE 2014, on Wednesday.

He added that a ministerial decree had been signed earlier this month on the ceiling price for electricity produced from geothermal resources.

'€œWe are offering better prices so that investors will invest,'€ he said.

The ministry'€™s figures show that $376 million in geothermal investment was realized last year.

Several geothermal development projects are now in the pipeline, including a mega project of the 330 MW Sarulla plant in North Sumatra, which will be the biggest in the world.

'€œAlthough there are many barriers, geothermal can be developed. Sarulla had been delayed for 20 years but it will be constructed this year,'€ Vice President Boediono said at the geothermal event.

'€œWe shall not experience any more problems surrounding Sarulla. Indonesia can be a geothermal superpower.'€

In a separate development, the 55 MW Patuha geothermal plant is also expected to launch operations this year.