Publications

The economics of geothermal projects depend on the total steam production, the selling price of the energy, the costs to generate the energy, and the tax taken by the government. The price of geothermal energy must be competitive with other energy prices to enter the energy market. The production costs of geothermal energy depend on geographical and geological conditions. The tax depends upon government policy.Any company investing in a geothermal project needs to receive profits that at least meet its minimum attractive rate of return. Otherwise the company will invest in another project.This study is conducted to measure the effects of price, costs and government policy on the rate of return of funds invested by companies operating geothermal projects in Indonesia. The results indicate that geothermal is competitive with oil and nuclear, but that low tax rates are required for geothermal to compete with gas and coal.