Indonesia’s MEMR is working with a team from Gadjah Mada University to evaluate possible financial incentives to attract investment in the geothermal sector.
Indonesia’s Ministry of Energy and Mineral Resources (MEMR), working with an independent team from Gadjah Mada University (UGM), is evaluating several financial terms to further increase investment in Indonesia’s geothermal sector, based on a proposal by geothermal operators to adjust the amount of fees charged to geothermal permit (IPB) holders.
The study evaluates the impact on geothermal level economics of reducing or simplifying relevant charges for IPB holders.The charges considered here are those within the MEMR, such as production contributions, production bonuses and fixed contributions.
“The EBTKE Directorate conducted its own investigation in cooperation with UGM and the response was very positive.” Riza Pasik, Secretary General of the Indonesian Geothermal Association (INAGA/API), said:
Apart from tariff cuts, MEMR is also discussing possible other fiscal incentives, such as adjustments to land tax, business tax, value-added tax and income tax for geothermal companies, although these remain the responsibility of the Ministry of Finance.
Previous reports said that MEMR was working on a draft derivative regulation of Presidential Regulation No. 112/2022 that would allow geothermal independent power producers (IPPs) to negotiate with PLN on the price at which electricity from geothermal plants is purchased.
“For example, if a price revision says it’s unattractive, we evaluate it and try to determine how good the numbers are, but the mechanics don’t change, only the value.” Haris Yahya, head of MEMR’s EBTKE Electricity Research and Testing Center, explained:
The results of the fee assessment and proposed derivatives regulation are expected to be published by the end of the year.
Source: Bisnis.com
