Revision On Geothermal Pricing Soon To Be Signed
“We are looking forward for the ministerial regulation revision on geothermal power plant to be signed in a few weeks. It would provide certainty for business stakeholders, and boost the development of geothermal power,” told Rida Mulyana, Director General of New Renewable Energy and Energy Conservation, during a seminar on geothermal, held in Jakarta today (4/10)
According to the director general, the most important point in the revision is the calculation mechanism for geothermal electricity price. The feed in tariff was previously based on areas, but it is settled now that it would be based on the Highest Standard Price (HPT in its Indonesian abbreviation). There are two basis used to calculate the HPT, i.e. the power plant capacity and the quality of geothermal energy.
The revision is being discussed by the Fiscal Policy Body at the Ministry of Finance, and it would be soon handed over to the Minister of Energy and Mineral Resources for signing. “We are pushing all effort, so the Ministerial Regulation can be signed soon,” Rida Mulyana promised.
He further elaborated that the pricing policy revision is made based on inputs from the Ministry of Finance and business stakeholders in geothermal sector. Owners of small-scale geothermal power plants admitted that the electricity sales is not profitable enough, compared to the large sum of investment.
“Later [in the regulation revision], it would be calculated for the small-capacity power plant to have higher sales price, compared to those of the large-capacity. It would also applicable even if both small-capacity and large-capacity power plants are in the same area,” he explained.
Pricing issues has always been problematic. Even after the feed in tariff was settled, it has not showed a significant acceleration in geothermal development. Therefore, the revision is needed for the purpose of geothermal power plant projects acceleration, all over Indonesia.
The Ministerial Regulation No. 22/2012 on the assignment for PLN (the state utility company) to purchase electricity from geothermal power plants and it’s pricing, has arranged a special tariff scheme or feed in tariff. According to the current regulation, the electricity sales price is determined to the location and state’s area, within the range of US$10 cents – US$18 cents per kwh.
It was later to be learned, that the scheme is not properly aimed at the purpose. Hence, a modification is required, so that the development of geothermal power plant could reach its economic value.
“The existing tariff scheme based on area will be further adjusted,” Rida Mulyana concluded
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