Thursday 11th March 2021, an online Focus Group Discussion (FGD) was held with the topic "Optimizing the Role of Geothermal Energy in Realizing National Energy Security", which was organized by IREEM (Institute for Natural Resources, Energy and Environmental Management) – a professional institution with one of its missions to carry out policy, technical, energy and environmental audit studies.

The background for holding this FGD is the plan of the Minister of BUMN to form a Geothermal Holding Company. This plan is interesting because it can produce optimal synergy both in terms of the advantages of Primary Energy Upstream, Operations, and Buyers (PLN), as well as Government support through SOEs in funding and assignments. However, with the IPO plan for geothermal, it is necessary to carry out detailed and comprehensive analyzes.

Geothermal development has almost the same characteristics as oil and gas because it has high risk, high investment, and long returns. Besides that, it potentially requires development funding assistance such as a Subsidiary Loan Agreement (SLA), direct lending with government guarantees, PISP, Business Feasibility Guarantee Letter (SJKU), Gov. Drilling, etc. Therefore, it is necessary to study and analyze carefully so that the holding and IPO plans do not harm future geothermal development.

Following are some important points that can be concluded from the results of the FGD:

It can be concluded from the agreement of the speakers and responders that Geothermal energy is a national asset that must be optimized, has great potential, is spread across various regions in Indonesia, is very friendly to the environment or relatively does not emit greenhouse gases. It will be a loss if this nation does not optimally utilize the energy resources it has.

The price of Renewable Energy (RE) electricity is still an obstacle in the development of RE including Geothermal, but the government is still committed to pushing RE development towards National Energy Independence and Security.

There are many efforts that must be made by the government, both directly and indirectly through SOEs, to improve the selling price of RE electricity, including Geothermal, by reducing the risk of exploration and exploitation by the government. This is a step forward, but the government's ability to fund exploration drilling needs to be continuously explored by involving Green technology funding and/or Multilateral Bank funding. Breakthroughs to reduce exploration and exploitation risks and others through the use of clean energy funds including climate change funding are very optimal compared to using Domestic Investment (PMN) or APBN funds.

The formation of a Geothermal Holding can also be expanded into a special RE SOE which is a national strategic step towards National Energy Independence but needs to be done carefully and not to let national assets be held hostage by private finance parties as happened in 1996-1998.

With the PGE IPO program currently underway, careful analysis is required. It is necessary to measure all possibilities from the "pluses and minuses" as recommended by Mr. Heri Setiawan Director of State Financial Risk Management- DJPPR and Mr. Luluk Sumiarso Former Director General of LPE/Oilgas/EBTKE and Secretary General of ESDM and Mr. DEN member.

BUMN Geothermal Holding is intended to position synergy between PLN and Pertamina, which has always been difficult to combine these two large BUMNs. So if the GDE, which has become a Geothermal SOE, is then used as a Geothermal Holding, then it really deserves consideration by the Government (as a mediator), and we don't lose momentum in the energy transition through the Optimization of SOE Holding which is currently being carried out by the Minister of SOEs. In the RUEN there is a mandate to form BUMN RE and BUMN Holding which the intention of BUMN Holding is the implementation plan of the RUEN mandate.

Article 33 of the 1945 Constitution has become a philosophical guideline for the government's mastery and control of natural resources. This issue is very crucial with the many precedents for filing a Judicial review to the Constitutional Court (MK) on government plans in sectors involving state control over land, water and natural resources. Therefore, a conception of state control has been formed which necessitates the active role of SOEs as an extension of the Government.

FGD materials can be accessed at the following link:

http://bit.ly/OptimalisasiPeranPanasBumi-FGD-IREEM