Indonesia needs additional 700-800MW of geothermal capacity per year to reach 10.5 GW target by 2035

Jakarta—Indonesia needs to add 700-800 megawatts (MW) of capacity every year until 2035 to pursue the ambitious target of reaching 10.5 gigawatts (GW) of geothermal power generation capacity by 2035. Currently, the installed capacity of geothermal energy has only reached around 2.6 GW or around 11% of Indonesia’s total potential geothermal resources of 24 GW.

During the 10th Indonesia International Geothermal Convention & Exhibition (IIGCE) 2024, which took place at the Jakarta Convention Center from September 18 to 20, Julfi Hadi, President and Director of PT Pertamina Geothermal Energy Tbk (PGE), emphasized that although geothermal energy has great potential as a clean and reliable energy source, the main challenge lies in the economics of the project.

“To achieve the target of 10.5 GW by 2035, we need to add at least 700 to 800 MW of capacity every year. However, the biggest challenge is making these projects economically viable without increasing electricity prices,” Julfi explained in a written statement on Thursday, September 19.

Projects need scalability and technology

Julfi revealed that only around 2.6 GW of geothermal energy has been developed out of Indonesia’s total 24 GW of potential resources. As one of the countries with the second largest geothermal reserves in the world after the United States, Indonesia has a great opportunity to utilize this renewable energy. Still, special strategies are needed to make geothermal projects more economical and attractive to investors.

“Adopting the latest technology and scaling up operations are important steps to reduce production costs. This will help increase the commercial attractiveness of geothermal projects without the need to increase electricity tariffs,” Julfi added.

In a forum attended by geothermal energy industry stakeholders, including government and private sector representatives, Julfi highlighted the importance of collaboration in accelerating geothermal energy development in Indonesia.

“We cannot work alone. To accelerate this development, collaboration between the government, developers, and other stakeholders is needed,” he said.

PGE, one of the industry’s major players, has demonstrated its capacity to support geothermal energy development.

“PGE has around 3 GW of resources in its working area, of which 60% are high-quality geothermal assets. With this capacity, PGE is ready to support the acceleration of geothermal development in Indonesia,” Julfi said.

In addition, PGE also seeks to increase local content in geothermal development projects by working with domestic companies to manufacture key components such as heat exchangers and cooling towers. This is expected to reduce production costs and increase the added value of the domestic industry. (Hartatik)

Banner photo: President Joko Widodo opens the 10th Indonesia International Geothermal Convention & Exhibition (IIGCE) 2024, held at the Jakarta Convention Center, September 18-20, 2024. (Source: PGE)

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