Indonesia passes law to tap volcano power

by -
2014

Indonesia volcanoThe Indonesian parliament on August 26 passed a long-awaited law to bolster the geothermal energy industry and tap the power of the vast archipelago’s scores of volcanoes.

Made up of thousands of islands stretching from the Indian to the Pacific Oceans, Indonesia is home to some 130 volcanoes and is estimated to hold around 40 per cent of the world’s geothermal potential.

However, it produces only a tiny fraction of its energy by converting underground heat into electricity, and lags far behind others such as the US and the neighbouring Philippines.

Red tape and legal uncertainty have long held back the industry and obstructed much-needed investment, but the government hopes the new law will speed up the development of the sector.

Most importantly, it stipulates that exploration for geothermal energy and development of plants is no longer considered mining.

It was regarded as such previously, which meant the industry faced problems working in Indonesia’s vast tracts of protected forest, where there is much geothermal potential but mining is illegal.

The law also stipulates higher prices for electricity produced by geothermal, following complaints from companies developing plants that tariffs were not enough to cover the high cost of production.

“Indonesia’s need for energy keeps increasing,” lawmaker Nazarudin Kiemas, who headed a parliamentary committee on the new law, was quoted as saying on the legislature’s website. “There is abundant potential for geothermal energy.”

Outgoing President Susilo Bambang Yudhoyono must sign off on the new law, but that is expected to be a formality.

Indonesia is estimated to have more than 28,000 megawatts of geothermal potential but is currently producing just over 1300 megawatts of its electricity from the clean source. Most of its electricity comes from coal and oil.

High cost has long been one of the major obstacles. A geothermal plant costs about twice as much as a coal-fired power station, and can take many more years in research and development to get online.

But once established, geothermal plants like the one built in Kamojang on the main island of Java in the 1980s can convert the endless supply of volcanic heat into electricity with much lower overheads – and less pollution – than coal.

Yudhoyono has also focused on geothermal as part of his plan to slash greenhouse gas emissions by 26 per cent from 2005 levels by 2020.

Indonesia is the world’s third-biggest greenhouse gas emitter due its use of dirty fuels to produce electricity and to rampant deforestation.



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The Indonesian parliament on August 26 passed a long-awaited law to bolster the geothermal energy industry and tap the power of the vast archipelago's scores of volcanoes. Made up of thousands of islands stretching from the Indian to the Pacific Oceans, Indonesia is home to some 130 volcanoes and is estimated to hold around 40 per cent of the world's geothermal potential. However, it produces only a tiny fraction of its energy by converting underground heat into electricity, and lags far behind others such as the US and the neighbouring Philippines. Red tape and legal uncertainty have long held back...

Indonesia volcanoThe Indonesian parliament on August 26 passed a long-awaited law to bolster the geothermal energy industry and tap the power of the vast archipelago’s scores of volcanoes.

Made up of thousands of islands stretching from the Indian to the Pacific Oceans, Indonesia is home to some 130 volcanoes and is estimated to hold around 40 per cent of the world’s geothermal potential.

However, it produces only a tiny fraction of its energy by converting underground heat into electricity, and lags far behind others such as the US and the neighbouring Philippines.

Red tape and legal uncertainty have long held back the industry and obstructed much-needed investment, but the government hopes the new law will speed up the development of the sector.

Most importantly, it stipulates that exploration for geothermal energy and development of plants is no longer considered mining.

It was regarded as such previously, which meant the industry faced problems working in Indonesia’s vast tracts of protected forest, where there is much geothermal potential but mining is illegal.

The law also stipulates higher prices for electricity produced by geothermal, following complaints from companies developing plants that tariffs were not enough to cover the high cost of production.

“Indonesia’s need for energy keeps increasing,” lawmaker Nazarudin Kiemas, who headed a parliamentary committee on the new law, was quoted as saying on the legislature’s website. “There is abundant potential for geothermal energy.”

Outgoing President Susilo Bambang Yudhoyono must sign off on the new law, but that is expected to be a formality.

Indonesia is estimated to have more than 28,000 megawatts of geothermal potential but is currently producing just over 1300 megawatts of its electricity from the clean source. Most of its electricity comes from coal and oil.

High cost has long been one of the major obstacles. A geothermal plant costs about twice as much as a coal-fired power station, and can take many more years in research and development to get online.

But once established, geothermal plants like the one built in Kamojang on the main island of Java in the 1980s can convert the endless supply of volcanic heat into electricity with much lower overheads – and less pollution – than coal.

Yudhoyono has also focused on geothermal as part of his plan to slash greenhouse gas emissions by 26 per cent from 2005 levels by 2020.

Indonesia is the world’s third-biggest greenhouse gas emitter due its use of dirty fuels to produce electricity and to rampant deforestation.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00