Further development of geothermal development in Indonesia – what stage are we at?

An event focusing on the challenges and opportunities of Indonesia’s geothermal energy development, organized by the New Zealand Embassy in Jakarta, Indonesia (Source: New Zealand Embassy)

Geothermal energy offers a unique opportunity to decarbonize Indonesia’s energy systems and reduce dependence on fossil fuels. Indonesia aims to increase its geothermal energy production to 20% by 2030. Given Indonesia’s abundant geothermal steam resources, this is entirely possible, but various remaining challenges will slow progress towards achieving these goals.

Identifying and addressing the sources of issues and challenges behind slow progress towards Indonesia’s renewable energy target is important to support Indonesia’s energy transition ambitions.

As a long-time friend of Indonesia, Aotearoa New Zealand remains an important and trusted partner in the geothermal sector. By supporting geothermal energy technical assistance and capacity building to strengthen Indonesia’s human resources in this sector, New Zealand is helping Indonesia accelerate geothermal energy development to support Indonesia’s achievement of climate goals.

To obtain thoughts and opinions from geothermal industry stakeholders on Indonesia’s geothermal energy development trajectory, challenges and opportunities, the Embassy of New Zealand organized an industry forum on May 28, 2024 at the Fairmont Hotel in Jakarta.

Guests included New Zealand Ambassador to Indonesia, Kevin Burnett and EBTKE CEO, Ibu Eniya Listiani Dewi, who set the stage for the participants. The event, attended by approximately 50 stakeholders from the private and public sectors, began with a breakfast networking session, followed by a panel discussion on some key topics, including questions and comments from the floor. The panel was moderated by Greg Ussher and Alex Batten of Jacobs.

Summarizing the current context, Moderators highlighted several key issues they have observed in the geothermal space in Indonesia and what they are seeing around the world: the growth of geothermal energy development in Indonesia, with only 62 MW added to the grid since the end of 2021; low tariffs and high capital expenditure; as well as prescriptive regulations and processes. All of these have been identified as challenges for the industry hampering development, leading some developers to look to offshore geothermal projects.

The panelists were then asked: – despite the current challenges, how can we move forward geothermal development in Indonesia?

The panelists are Pak Gigih, CEO of Panas Bumi, Pak Julfi Hadi, President of INAGA and Pak Christyono, Director of PLN Geothermal. The panelists noted that as Indonesia embarks on the path to realizing the full potential of geothermal energy, the country must also address the challenges it faces. From technological innovation to policy frameworks, from investment barriers to environmental considerations, there are obstacles that the industry can overcome together.

Concluding remarks from Kirk Yates, New Zealand Embassy Development Advisor, Focused on the Future, with an update on New Zealand’s contribution of NZD 15.64 million ($9.6 million) to the Indonesia-Aotearoa New Zealand Geothermal Energy Program ( PINZ) will spend five years in the coming year to help develop the geothermal industry in Indonesia. This is a continuation of previous support, but delivered through a new, flexible and partner-focused approach at a strategic level, together with an ongoing element of training in the technical skills that underpin a thriving geothermal industry.

Source: New Zealand Embassy in email correspondence