Old Geothermal Law (No. 27/2003)

The objectives of Indonesias Geothermal Law No.27 of 2003 are: to provide a stronger legal basis for upstream geothermal energy developments, including private investments in the sector; and to expand regional autonomy in Indonesia to support sustainable energy alternatives to fossil fuels.The law clarifies the regulatory structure surrounding geothermal development. Geothermal Business Permits (IUP) are granted by the authority of the state. They only concern use of geothermal resources, not of surface land. First, a Pre-tender field survey is done by the government (Art 10). Afterwards, the Minister determines Geothermal Working Areas (Art 9) offered for competitive bidding to prospective investors. Eventually, IUP are issued by the Minister, Governor or Regent/Mayor, according to their authorities (Art 21). The term of an integrated business permit is divided in three steps: The exploration term (extendable twice for a one year period), the feasibility study (for a maximum term of two years as of the expiration of the exploration term) and the exploitation phase for a minimum term of thirty years (extension possibility). In 2005 followed the creation of the Directorate of Geothermal Enterprise Supervision and Groundwater Management to strengthen the sectors management efficiency. Over the period from 2007 to 2008, Indonesia's geothermal power plant capacity in increased by 317 MW.

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