Indonesia is a country that has the greatest geothermal potential in the world, which is 40 percent of the world's geothermal potential or equivalent to 28,000 MW over 256 locations. The large geothermal potential can provide opportunity for Indonesia to break away from dependence on other fossil fuels that always tend to experience price’s increase and are not environmentally friendly. Unfortunately, there is just 1189 MWe of geothermal energy being utilized.
Director of Energy, Mines and Mineral Resources and Mining-BAPPENAS, Dr. Montty Girianna said the government gives private parties the opportunity to participate in the development of geothermal power. "The government has also issued a policy encouraging the private sector to invest in geothermal energy utilization," he said in the seminar Geothermal For Indonesia: East Indonesia Towards Energy Independence on Thursday (24/3) in the UGM Faculty of Engineering.
Montty mentioned a number of advantages will be obtained by involving the private sector in the development of geothermal projects. "The development of geothermal projects will be more efficient if it conducted by private parties," he explained.
Freddy R. Saragih, Chief of Fiscal Risk Management Center, Ministry of Finance conveys tha the government has allocated a revolving fund for geothermal amounting negative Rp1,126,5000,000,000. The funds will be used to finance exploration activities for development of geothermal power electricity projects
"The funds are prioritized for exploration in eastern Indonesia and green-field," he said.
Freddy said that the revolving fund program is intended to improve the position of the government, in this case the PLN, in the geothermal mining working area (WKP) offers that is based on electricity tariff. In addition it is also to increase investor’s interest for geothermal development, especially outside Java and Sumatra. "Revolving fund program is directed to make exploration and development of geothermal resources more scalable by providing sufficient data to help establish affordable electric rates," he said.
Freddy added, with a measured risk, it can facilitate the funds raising to finance the exploration activities, likewise with the development of insurance systems for geological risk.