Indonesia:

Opinion: Harnessing Geothermal Energy (Jakarta Post)

Geothermal could indeed become one of the best alternative sources of clean, renewable energy to diversify Indonesia’s energy portfolio

(Courtesy CIA.gov)

The government has asked British business leaders, who accompanied UK’s Prime Minister David Cameroon during his visit to Indonesia last week, to invest in geothermal power development in the country.

But not a single investor will be interested in this kind of renewable energy until the government resolves the problems of tariffs, purchasing-power agreements with the state electricity monopoly (PLN), the tendering process and the poor coordination between the ministries and state companies involved in this sector.

Geothermal, like hydrocarbon resources, is highly risky, requires huge upfront investment and has a gestation period of up to eight years from exploration to power generation. But unlike oil and gas mining contractors that can sell their oil or gas to domestic or international buyers, geothermal investors face monopsony (when an employer has market power in the labor market, sort of the employer equivalent of a monopoly) because geothermal steam cannot be exported but must be harnessed on site into power sold only to PLN through its grid.

Read More.......