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Jokowi demands to shorten the geothermal development application process. (Photo: Sekretariat Kabinet Republik Indonesia)
Indonesia possesses rich geothermal resources, with a goal of increasing geothermal power generation capacity to 10.5 GW by 2035. However, development has been slow, and to meet this target, an annual increase of 700 MW to 800 MW will be necessary. President Joko Widodo has attributed the issues to slow administrative processes and has called for immediate improvements.
Geothermal development permits take six years
At the Indonesia International Geothermal Conference and Exhibition (IIGCE) on Sept. 18, Jokowi explicitly criticized the lengthy approval processes for geothermal development projects, stating, "It takes six years before we can start construction. Investors cannot accept such delays. Although everyone tells me to be patient, it's very difficult."
During the same event, Minister of Energy and Mineral Resources Bahlil Lahadalia admitted that cumbersome regulations could hinder Indonesia's goal of achieving net-zero emissions by 2060. He announced plans to simplify the application processes for new and renewable energy, although no further details were provided. He emphasized that he has reported to the presidential candidate Prabowo Subianto about accelerating the implementation of reforms.
Bahlil noted that investments in geothermal power plants have increased eightfold over the past decade, with total investments reaching $8.7 billion as of this year.
Muara Laboh Geothermal Power Plant in Indonesia. (Photo: INPEX)
Economic, environmental challenges hinder geothermal development
Indonesia has a potential geothermal energy capacity of about 24 GW, making it the second largest geothermal resource holder in the world after the United States. However, only 2.6 GW has currently been developed. Julfi Hadi, president of PT Pertamina Geothermal Energy, the geothermal development arm of the state-owned oil company, pointed out that to meet the 2035 target, Indonesia needs to increase capacity by 700 MW to 800 MW annually.
He believes the biggest challenge for geothermal development is economic factors, emphasizing the need to make geothermal projects commercially attractive without raising electricity prices. He suggested adopting the latest technologies and expanding operational scales to reduce production costs.
However, the challenges for Indonesia's geothermal industry go beyond economics. In Banten Province, a development project has been delayed for over 15 years mainly due to local farmers' opposition. They are concerned about the impact on their livelihoods, fear changes to the landscape could lead to the loss of underground water sources and worry about potential health risks.
In April of this year, a pipeline rupture at the Sorik Marapi geothermal power plant in North Sumatra resulted in a release of hydrogen sulfide.
Nevertheless, the Geothermal Power Plant Project (PLTP) is a key initiative for Indonesia's energy transition. During this exhibition, Indonesia also signed cooperation agreements with New Zealand and Iceland, hoping to leverage the experience of other countries to expand geothermal energy development.
Source: Jakarta Globe、Tanahair、Mongabay
