geothermal vs coal in indonesia, page-27

For the record GOI and MEMR policy on Geothermal, in particular Ministerial Regulation No. 22/2012, now obligates PLN to buy all geothermal electricity according to the new pricing regime....subject to the caveat below.

Moreover, Ministerial Regulation No. 01 / 2012 (2nd Stage of 10,000 MW Crash Program) was introduced in order to speed up the development of geothermal power to the amount of 4,925MW by the year 2014. Coined Fast Track Phase II. PAX's projects are listed - this is public knowledge..... and quite easily found.

Further fiscal incentives offered by GOI to geothermal developers include:

1. 30% of corporate income tax;
2. 10% of added-value tax paid by the GoI;
3. Custom duties exemption for geothermal developer;
4. 25% per year depreciation for 8 years with double declining balance method; and
5. Investment tax credit 5% per year for 6 years.

On the FIT:

The FiT scheme for geothermal in Indonesia is divided into 6 areas and not dependent on capacity.

All electricity generated from geothermal power plant will be bought using this scheme.

Feed-in Tariff are applied for all geothermal business scheme however:

- Existing GWA for Contract extension, unit expansion and already signed PPA as long as both parties agree to renegotiate.

- New GWA for IUP holder after the issued and IUP holder
will negotiate PPA as long as both parties agree to renegotiate.

try also - http://www.cleanbiz.asia/news/existing-indonesian-geothermal-plants-burned-new-prices#.UKqlpIdtiWZ

No doubt there will be some argy-bargy as these new policies are implemented.

To my mind, very difficult to see how the recently announced deal (PPA) has any effect on PAX (good or bad) other than to show that PPAs are starting to flow out of the bureaucratic pipeline.

Is there a risk?

Of course, there's always risk with developmental projects under a new legislative regime - anywhere in the world - but imo the risk is more likely at the financing level, not the pricing level.

The proof will be in the pudding.

Over to you Dazzy.