CDM Financing for Geothermal Project in Indonesia: Current Status and Post 2012 Prospect
(Pendanaan CDM untuk Proyek Panas Bumi di Indonesia: Kondisi Saat Ini dan Prospek Setelah 2012) 

Abstract

     Geothermal potential in Indonesia reaches 29,038 MW, but only about 4% has been utilized. The obstacles faced is the high investment costs and limited funding mechanism. CDM is one of the incentive mechanisms that can be used to help overcome these obstacles. CDM for development of geothermal projects in Indonesia was the first utilized in the development of Darajat geothermal power plant unit III with the installed capacity of 110 MW which is operated by Chevron Geothermal Indonesia. This project has been registered at the CDM Executive Board in 11 December 2006 and received the CERs for the first time in 11 June 2009. After this success, a lot of construction of geothermal power plants using CDM funding scheme. The cost of generating geothermal power plants in Indonesia about 9.5 cents $/ kWh and with the CDM scheme can reduce the generating cost about 0.85 cents $/ kWh.

     CDM is the only mechanism in the Kyoto Protocol that involves developing countries. The first phase of the Kyoto protocol will expire in 2012 and until now there is no legally binding to continue the second phase of the Kyoto protocol. Various proposals need to be studied regarding post-2012 climate change regime, including the CDM scheme. Agreement schemes need to be discussed and analyzed the advantages and disadvantages for Indonesia, especially in the development of geothermal power plants. Agreement is expected to come to involve the countries that did not ratify the Kyoto Protocol, especially the United States and Australia.