30 Sep 2014
GEOTHERMAL FEED-IN TARIFFS (Regulation of the Minister of Energy and Mineral Resources Number 17 of 2014)

The above captioned Regulation of the Minister of Energy and Mineral Resources Number 17 of 2014 was issued on 3 June 2014. It increases the purchase price payable by the state-owned power utility company PT Perusahaan Listrik Negara (Persero) for the electricity produced by geothermal power plants and for the geothermal steam used in generating electricity.

The new regulation provides that the highest benchmark price, in the range of 11,8 – 29,6 US$/kWh, shall be determined based on the Working Area and the year when the Commercial Operation Date (COD) occurs – a change from the old regulation (Regulation of the Minister of Energy and Mineral Resources Number 22 of 2012) which determined the highest benchmark price, in the range of 10 – 18,5, US$/kWh, on the basis of the Working Area and the Capacity.

In relation to the changes in the highest electricity benchmark price, holder of an electricity business license who obtained their geothermal license after the enactment of Law Number 27 of 2003 (the previous Geothermal Law) and had entered into a Power Purchase Agreement before the issuance of the Regulation, may propose an adjustment to their electricity selling price.

As for geothermal development projects which are currently not running, the government is giving to the developers the option to return their geothermal license and/or electricity business license to the regent or local governor within a certain time limit, upon which the working area will be offered again in a new bid with a new price. Developers who do not return their geothermal license and/or electricity business license within the time limit will not be allowed to participate again in the bidding process in that particular area. (by: Herry Kurniawan/Zefanya S. Sahusilawane)