Government Drafts Auction Rules For Geothermal Energy

Jakarta (Antara Bali) - The government is drafting the auction rules for geothermal energy following the issuance of the Regulation of Energy and Mineral Resources (ESDM) No. 22 Year 2012 on August 29, 2012.
        
Secretary General of New Renewable Energy and Energy Conservation of ESDM Ministry, Djajang Sukarna said on Friday that  the regulation has changed the mechanism of auctions from using the lowest prices to a program of work and commitment.
        
"According to the regulation, the price of geothermal energy is fixed. Hence, determination of the winner of the auction is based on the bidders' respective programs and commitments," he said.
        
Sukarna said that the government targets to publish the auction rules before the end of 2012. He added that geothermal energy auction using the regulation can be initiated in early 2013.
        
"We expect the government to start the auction using the new set of rules in March-April 2013 and complete it quickly, so that the exploration can begin in 2013," he said.
        
According to him, if the exploration can be completed in 3 to 4 years, production can be expected to begin in the next 5 to 6 years, given an additional two-year development period.
        
"We expect a geothermal energy production project based on the new regulation to start in 2017 or 2018," he said.
        
Sukarna added that the government is reviewing the rules regarding the bank guarantees of the bidders with an option of US$10 million which is enough to fund the drilling of one exploration well and other activities such as surveys.(*/M038)