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Pricing policy key catalyst for geothermal future: Expert
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Renewable energy -- A geothermal power plant (pictured) in Dieng, Central Java, has become an increasingly significant source of renewable energy. (Tempo/-)
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ndonesia must pay close attention to its geothermal power pricing policy as it has been highlighted by the market as a key catalyst for the successful growth of renewable energy in the future, an expert has said.
Global business consulting firm Boston Consulting Group principal Alex Doyla said the Indonesian government had set an ambitious target of generating 8 percent or 7,200 Megawatts (MW) of its total electricity from geothermal energy by 2025.
However, since the 1980s Indonesia has only utilized 1,494 MW of geothermal energy capacity, he went on.
"The geothermal energy growth has been low in the last three decades. The former President [Susilo Bambang Yudhoyono] had issued a commitment to triple the country’s utilized geothermal capacity by 2014, but the actual growth was relatively low during 2010-2015, standing at only below 300 MW," Alex said during the 4th Indonesia International Geothermal Convention and Exhibition (IIGCE) at Jakarta Convention Center on Thursday.
He admitted the government had made positive developments in the geothermal energy sector during the past year, including its decision to offer production bonuses for local administrations, introduce a price ceiling concept and categorize geothermal exploration as a "non-mining activity".
The government also had been successful in centralizing tender processes and permit issuance and introduced sanctions to parties attempting to hinder geothermal activities.
"To develop further our geothermal sector, pricing issues must be resolved as it is the key catalyst for its growth in the future," said Alex.
He further said that two pricing policy components Indonesia must prioritize to speed up geothermal development were pricing schemes and tariff escalation. (ebf)
