Indonesia and its challenges for geothermal development, IIGCE 2017, Aug 2-4, 2017

Indonesia and its challenges for geothermal development, IIGCE 2017, Aug 2-4, 2017 Indonesian Geothermal Association, (Source: Launch of IIGCE 2017, 18 May 2017, INAGA-IIGCE)
Alexander Richter 23 Jun 2017

With only about 6% of its geothermal potential having been developed, Indonesia faces challenges in the further development of its resources. This and more are key topics of the International Indonesia Geothermal Conference & Exhibition in Jakarta, August 2-4, 2017.

Along with the existence of Indonesia that is located on the path of the volcano (ring of fire), Indonesia is a country with a large geothermal potential. Based on Bertani (2015), Indonesia’s geothermal reserves amount ± 29 Giga Watt (GW) or equivalent to 40% of the world’s total reserves. Currently the newly developed geothermal field is around 1,699 MW or about 6% of Indonesia’s total reserves. With the total amount that has been developed, Indonesia is the third largest country in the world as users of geothermal power generation under United States (3450 MW) and Philippines (1870 MW).

The Government of Indonesia has launched 35,000 Megawatts program to meet national electricity needs. In the program, it is expected that by 2025, 23% of electricity will come from renewable energy (geothermal, solar, wind, etc.).

Although the reserves amount is quite large, but geothermal development in Indonesia has several challenges. Among those challenges are:

Economic Challenges

Price certainly becomes one of important factor for geothermal development in Indonesia. As we know, the government through the Ministry of Energy and Mineral Resources has issued the Ministerial Regulation No. 12/2017 on the utilization of renewable energy sources for the provision of electricity. On the Ministerial Regulation the ceiling price mechanism is regulated to replace the feed-in tariff mechanism3). With the ceiling price mechanism, the upper limit of tariff to be paid by PLN has been determined. While in the FIT mechanism, the price to be paid by PLN is the fixed price per unit produced. The change is classified as a basic change which will make investor more careful on decision making.

For additional information, the capital to build geothermal power plants is bigger than the capital needed for the construction of fossil fuel power plants (oil and gas, coal). However, the maintenance and operational costs of geothermal power plants are lower than those of fossil power plants.

Locations Challenge

In general, geothermal locations are located in mountainous areas. Where the topography and soil surface conditions are challenges in making access road and other supporting facilities. Some of geothermal potentials are located in protected forest areas and national parks which previously not allow any mining activities including geothermal. At the moment, Law No. 21 of 2014 has been ratified, where geothermal activity has not been classified as a mining, so this is a breakthrough for geothermal development activities.

As consideration, the land needs is not as wide as the land for mining, so the forest clearing will be set to a minimum. 

Social Challenges

Public education on the development of geothermal activities still needs to be improved. Currently the community still considers geothermal activity, especially drilling, can have the same impact as the impact of drilling on oil & gas wells. The fear of the Sidoarjo mudflow event (LUSI) causing the community being resistant to drilling activities. While there is a difference between geothermal drilling and oil and gas drilling, the most significant is the reservoir pressure (geothermal reservoir pressure 1/5 of the oil & gas reservoir pressure). Other differences are rock composer, well design, fluid type etc. Therefore people should be given the understanding that geothermal drilling activities are very unlikely to result in events such as LUSI.

Resource Challenges

The geothermal project is very risky, with the risk of geological exploration (resource risk) as the highest risk. There key parameters of geothermal development are temperature, permeability and reservoir size. The entire information can be known through 3G surveys (Geology, Geophysics and Geochemistry). These three surveys were ultimately used to create a conceptual model of the geothermal system. Where on the conceptual model, information about the estimated magnitude of resources including temperature, subsurface permeability, depth estimation, area, and thickness of geothermal reservoir are describe. A large comparison of resources from 3G data interpretation with the results obtained after exploration drilling could be different. This can have an impact on the economy model that causes geothermal in the area cannot be developed. It is possible that after exploration drilling the temperature, depth of the reservoir, and the boundaries of the geothermal prospect area are different from expectation.  Below are the methods to identify key parameters and their potential pitfall. 

  • Reservoir temperatures are generally estimated using geochemical data from surface manifestations, by taking samples of fluid fumaroles (surface water vapor) or hot springs. The fluid will then be analyzed to determine the chemical element content. The chemical elements will be calculated to estimate reservoir temperature. There are many calculation methods that can be used; the art of selecting reservoir temperature estimates is the art of becoming a geochemist. Even though the calculated temperature is high, but can be as pitfall if the result of the drilling shows temperature lower than expected.
  • Determination of reservoir boundary and depth can be done using geophysical method. A common method is to measure the resistivity value of rocks below the surface by doing magneto telluric survey. Low resistivity values of rock are usually associated with cap rock which interpreted as a trap for reservoir at down below. The pitfall is if the low resistivity value is shallower than the actual reservoir location. Hence interpreted that the geothermal system has cooled down where the reservoir location is deeper than the bottom of low resistivity value.
  • Permeability can be estimated by detailed geological studies (mapping of surface structure and rock alteration) and geophysical studies (micro earthquakes). In general, geothermal exploration targets are surface structures that are predicted to have a succession far below the surface. However, after drilling, it is known that the structure is shallow and has no connection with the geothermal reservoir. Usually surface structure data will be combined with micro earth quake data to increase the confidence level of the permeability target.

Various efforts were made to reduce resource risk, methods in the oil and gas industry also tried to be applied. One of them is Low Frequency Passive Seismic (LFPS). This method is quite successfully used to map the distribution of fossil gas below the surface. Since the fossil gas and geothermal steam are regarded as the same fluid, the mapping of the steam distribution below the surface is tried to be applied to the geothermal field that has a proven steam zone. This topic will be one of the papers that will be presented at IIGCE 2017 which will take place from 2 – 4 August 2017 at the Jakarta Convention Center.