The Parliament of Indonesia has passed a law that will enable the country to tap the power of its volcanoes, as part of its efforts to strengthen the geothermal energy industry.
Despite having around 130 volcanoes and holding approximately 40% of the geothermal potential in the world, it converts only a small portion of underground heat into power and is far behind countries such as the US and even its neighbor, the Philippines.
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Due to red tape and legal uncertainty, the country’s geothermal energy industry has not been able to attract investors, but the government now hopes that the long-awaited law will speed up investment in the sector.
Most importantly, the new law does not consider the exploration for geothermal energy and establishment of plants under the mining segment.
This is essential as large tracts of protected forest, which have geothermal potential, earlier could not be explored as mining in these regions was considered illegal.
The new law has also specified that electricity generated from geothermal will be priced high after several complaints from firms, which claimed that the tariffs did not even cover the huge production costs.
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By GlobalDataNazarudin Kiemas, who headed a parliamentary committee on the new law, was quoted as saying on the Legislature’s website: "Indonesia’s need for energy keeps increasing. There is abundant potential for geothermal energy."
President Susilo Bambang Yudhoyono will now sign the new law as part of the formal procedure.
Though the country has the potential to generate more than 28,000MW of electricity through geothermal energy, it is only generating approximately 1,300 MW of electricity.
Most of the country’s power requirements come from coal and oil.
Major obstacles for the establishment of geothermal facilities are the huge costs and the long time taken for research and development, unlike a coal power facility.
However, once it is set up, it can transform the endless supply of volcanic heat into electricity, with less pollution than coal.
Image: Mount Merapi, the most active volcano in Indonesia. Photo: courtesy of Crisco 1492.
