Indonesia could squander its world-class geothermal resource unless policymakers move quickly to cut red tape and lift price caps, research firm BCM Insights says in a new industry survey. The poll conducted between 5 May and 15 June — ranks geothermal as the country’s most dependable clean-power option, with 85.9 percent of respondents calling it more reliable than any other renewable source. Yet only 5.9 percent believe current government support is adequate, a gap BCM Insights says is “eroding investor confidence.”
High upfront costs, exploration risk and community resistance are the sector’s biggest headaches. A majority — 55 percent — cite social acceptance as the chief obstacle, while 51 percent point to capital intensity. Two-thirds add that the electricity price ceiling in Presidential Regulation 112/2022 still scares away capital.
Regulatory design also draws fire. Nearly 70 percent want the Independent Power Producer and Geothermal Exploration and Energy Development Agreement frameworks overhauled, arguing that protracted contract talks and opaque risk allocation slow project pipelines. By contrast, 88 percent say a proposed “power-wheeling” regime that allows private generators to sell electricity through PLN’s grid would improve project economics.
Financiers echo the call for certainty. Project-finance structures remain the preferred funding route (35.8 percent of responses), followed closely by soft-loan mechanisms (32.1 percent) — a split that tilts toward concessional debt among veterans with more than a decade in the field. Regulatory stability and faster permitting top the wish-list for unlocking capital, cited by 51.8 percent and 50.6 percent of respondents, respectively.
BCM Insights concludes that Jakarta must revisit tariff policy, streamline permits and deploy risk-mitigation funds if it hopes to meet its 2040 geothermal capacity target. “Developers remain upbeat about the resource, but frustration with policy bottlenecks is growing,” the report warns.
Click this link to download the full survey report: https://bit.ly/3GwRs1Q
