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This year’s geothermal investment in Indonesia lagging behind expectations

Drilling rig on site at Tulehu, Indonesia (source: PLN)
Alexander Richter 5 Oct 2020

With so far $302 million of investment into geothermal development in Indonesia in 2020, this lags behind the 2020 target of US$ 1.05 billion.

Being among the countries with the world’s largest geothermal resources, the ambitions for geothermal development in Indonesia remain high so the speakers of a recent webinar on Risk and Mitigation of Geothermal Development in Indonesia held by University of Indonesia Alumni Association (Iluni UI).

Andre Rahadian, Chairperson of Iluni UI, said “We are utilizing EBT [renewable energy] whose reserves are still abundant and we already have a roadmap from 2,000 to 5,000 MW until 2025. The question is with this pandemic condition whether the roadmap can still be implemented,” said Andre.

Head of the Sub-Directorate for Geothermal Program Preparation, Directorate General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources, Havidh Nazif estimates a geothermal resource potential of 23,965 MW in his remarks. Yet despite the potential, the country only utilises about one-tenth of its potential, with an installed geothermal power generation capacity of today around 2,130 MW. Meanwhile, the target set for this year is 2,270.7 MW.  “Of the installed capacity, the contribution is more to electricity production of 9,078 GWh and steam production of 65.2 million tons,” he explained.

Although the utilization of geothermal energy is not optimal, it is enough for the public to enjoy non-tax revenue worth IDR 0.748 trillion in the second quarter of 2020 (around USD 50 million).

On the other hand, geothermal investment is still relatively low, namely US $ 302 million, this figure is only 28.26 percent of the 2020 target of US $ 1.05 billion.

“This is still in stages. We need time. Yes, it looks like the difference in investment is small but in [renewable energy] it has contributed the most. Because geothermal development is typically capital intensive. We estimate an investment need of around USD 4-6 million per installed 1 MW of power generation capacity.” added Havidh.

Source: Tribun News