Law 21/2014 New Geothermal Law

This law updates previous geothermal laws and regulations, and separates geothermal activities from other natural resources exploitation such as mining. This may mean that geothermal exploitation will no longer be subject to the restrictions that apply to mining activities. It also specifies that tenders for geothermal exploration will now be issued by central government.


The new law also requires that local communities either receive a share in revenue or a production bonus from the geothermal power plant.


The basic structure of the law (building on Law No. 27/ 2003 and associated regulations) seeks to provide a stronger legal basis for upstream geothermal energy development, including private investments in the sector and to expand regional autonomy to support sustainable energy alternatives to fossil fuels. There is a fiscal incentive for new renewable energy development.


In 2005, the Directorate of Geothermal Enterprise Supervision and Groundwater Management was created, to strengthen the sector's management efficiency.


The regulations set out all the requirements and obligations for businesses seeking to establish themselves in this sector, including the coordination with the different levels of government, and the requirements to adhere to environmental quality and conservation legislation.