Indonesia defers geothermal target of 7,000 MW by 5 years to 2030

An article this week, by the Jakarta Post in Indonesia reports on the ambitious target of 7,000 MW of geothermal power generation capacity by 2025 always promoted by the country’s Ministry of Energy and Mineral Resources (ESDM) for years.

With reality looking quite different, the Ministry has now announced that the 7,000 MW target will now be pushed by 5 years given the current circumstances.

Ida Nuryanti Finahari, the ministry’s geothermal director, said that the country would likely only reach its goal of having 7,000 MW of geothermal power production by 2030, five years behind the target set by the General Plan for National Energy (RUEN).

Despite the various incentives in place for geothermal development, the seem to be insufficient in significantly lowering electricity tariffs of geothermal plants.

The geothermal industry describes the uncertainty of electricity prices and high production cost as key obstacles to make the economics work for geothermal development.

With expected new presidential regulation, there is hope that this will change and help make investments and outcomes more predicatable.

“Honestly, the Finance Ministry already has many incentives, but we need more breakthroughs or other incentives to lower geothermal prices,” said Indonesian Geothermal Association (API) chairman Prijandaru Effendi on Thursday.

The Ministry is still holding its expectations high on a $1.05 billion investment target for geothermal in 2020. The first quarter investment for this year though was only around $160 million or a mere 16% of the $1bn target, as we reported.

Source: Jakarta Post