Indonesia to reassess geothermal potential to attract investment


(Photo:Pertamina Geothermal Energy)

Indonesia’s strategic location along the Pacific Ring of Fire endows it with approximately 40% of the global geothermal reserves. Despite having a geothermal generation capacity of around 24 GW, limited demand has hindered investment attraction. As a result, the new content of “New and Renewable Energy Bill” (RUU EBET) expected to incorporate inputs from various sectors to reassess renewable energy sources such as geothermal energy across different regions in the country.

Eniya Listriani Dewi, the General Director of New and Renewable Energy and Energy Conservation at the Ministry of Energy and Mineral Resources (ESDM), acknowledged the progress of the New and Renewable Energy bill has been repeatedly delayed due to the Indonesia’s presidential elections. Moreover, ministers have been urging for the acceleration of drafting the bill.

Compared to solar and wind power, which are susceptible to weather conditions and intermittent, geothermal energy, with almost no carbon emissions, is considered less intermittent. Hence, it is believed to have the potential to play a significant role in the country’s energy transition process. The Ministry of Energy and Mineral Resources plans to scale up the geothermal capacity to reach 9.3 GW by 2035.

The Chairman of the Indonesian Geothermal Association (API), Julfi Hadi, stated that this potential is most abundant geothermal areas located on Sumatra and Java islands, with potentials amounting of 9,679 MW and 8,107 MW respectively. However, currently only around 15% of these potentials are being utilized.

The state-owned electricity company who is responsible for all power distribution in Indonesia, PLN, has announced its plans to revise the National Electricity Supply Business Plan (RUPTL). It is projected that the total generating capacity will increase by 80 GW before 2040, with renewable energy accounting for 75% of the total capacity. Moreover, there will be a ban on the development of the coal-fired power plants, which will be replaced by renewable energy power plants.

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