Jakarta – Renewable energy industry players, such as PT Pertamina Geothermal Energy Tbk (PGE), are pushing the government to provide clearer and more supportive regulations so that Indonesia can become a major player in the global energy transition, PGE said in a written statement Thursday, October 16.
This was revealed during the REPNAS National Conference & Awarding Night 2024. PGE President Director Julfi Hadi said that Indonesia has the second largest geothermal potential in the world, with reserves of around 24 gigawatts (GW). However, he said that this huge potential has not been optimally utilised.
“To date, only 10% of this potential has been utilized. In fact, geothermal is a green energy source that can become a base load and support national electricity needs,” Julfi explained.
On the other hand, Pertamina NRE’s Director of Risk Management, Iin Febrian, explained that the commercialisation of green energy is still hampered by various factors, especially related to funding and technology mastery. She said that support from the government in the form of clear regulations is needed to attract investment and build the capacity of the green energy industry in Indonesia.
Regulations and fiscal incentives
PGE, the pioneer of geothermal energy development in Indonesia, has operated in this sector for more than 40 years. According to Julfi, the acceleration of geothermal energy development will depend heavily on regulatory support and fiscal incentives provided by the government.
PGE notes that more massive geothermal energy development has the potential to attract USD 17-18 billion in investments. The sector also has the potential to contribute up to USD 22 billion to the Gross Domestic Product (GDP) and create up to one million jobs by 2035.
According to Julfi, geothermal energy is an important part of Indonesia’s plan to achieve its net zero emission target by 2060. “Geothermal could be the key to our energy transition. If its development is accelerated, Indonesia can become a global green energy giant,” he said.
In addition to electricity, PGE is also exploring the development of geothermal by-products, such as green hydrogen, silica, and carbon credits. (Hartatik)
