JAKARTA, May 12 (Xinhua) -- The Indonesian government plans to provide a fiscal incentive for geothermal operators in the country to speed up the development of the underused power-generation resource amid higher prices and depleted oil reserves.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the incentives would include the exemption of double value- added tax for geothermal operators in the upstream and downstream sectors.

The incentive, said Purnomo, was being discussed with the Ministry of Finance, according to the local daily Jakarta Post here on Thursday. Indonesia is striving to increase its use of alternative energies, including gas, coal and geothermal energy, in order to rely less on increasingly expensive and scarce oil.

An environmentally clean energy source, it has a carbon dioxide emission rate 90 percent lower than that produced by oil-fired power plants.

However, the energy resource is relatively untapped despite its abundance here. Indonesia is estimated to hold about 40 percent of the world's geothermal reserves, equivalent to a total of 27,140 megawatts (MW) of power.

While the country has several operational geothermal power plants, their combined capacity currently is only 807 MW or about 3 percent of the country's total geothermal potential.

Purnomo said the government was planning to gradually increase production of geothermal energy to 2,000 MW in 2008 and up to 6, 000 MW in 2020.

The current regulations require geothermal operators to pay the tax twice because they operate on two levels, in the upstream sector by producing geothermal energy and in the downstream sector by distributing it.

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