With lower tariff, geothermal could be key to achieving carbon neutral target

Jakarta – Indonesia must utilise its geothermal energy reserves, one of the largest in the world, according to the Ministry of Energy and Mineral Resources (ESDM), in a written release, Friday (3/6). Based on data from ThinkGeoEnergy 2022, the installed capacity of geothermal plants worldwide reaches 15,854 MW. Meanwhile, Indonesia’s geothermal reserves are estimated at 23.7 GW.

“Geothermal utilisation must be carried out optimally in the energy transition from fossil to new and renewable energy. State-owned enterprises (SOEs) are expected to be the main driving force for geothermal development in Indonesia,” said the Director of Geothermal at the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) of ESDM, Harris Yahya.

With a generating capacity of 2,276 MW, Indonesia is the country with the second largest generating capacity after the United States with 3,722 MW. Indonesia has even surpassed the Philippines which has an installed generating capacity of 1,918 MW.

Abadi Poernomo, Senior Advisor of the Indonesian Geothermal Association (API), said that SOEs are the pioneers in geothermal development. However, regulation remains a determining factor. For example, in facing some classic problems, such as the price of electricity sold from developers.

Until now, geothermal is still considered inferior to coal-fired power plants, due to the problem of tariffs or electricity prices offered by coal plants which are cheaper than geothermal. “Geothermal cannot compete with coal power plants, when the price of coal is below USD 100 per ton). The government (PLN) wants tariffs equal to the cost of production, where the requirement does not meet the geothermal economy,” said Abadi.

Currently, there are three SOEs that are developing geothermal energy as an energy source, PT PLN (Persero) through PLN Gas and Geothermal, PT Pertamina (Persero) through PT Pertamina Geothermal Energy (PGE), and PT Geo Dipa Energi. Yahya considered PGE to be the state-owned company that has the biggest role in geothermal development. “PGE’s role can be very crucial in supporting the achievement of the government’s targets,” he said.

PGE currently manages 13 geothermal working areas spread across Sumatra, Java, Bali and North Sulawesi. In these locations, 1,877 MW of geothermal power has been generated, consisting of 672 MW operated by PGE alone and 1,205 MW managed through Joint Operation Contracts. Geothermal installed capacity in PGE’s working areas contributes about 82% of the total installed geothermal capacity in Indonesia, with the potential for CO2 emission avoidance of around 9.7 million tons of CO2 per year. (Hartatik)

Banner photo: Aerial View of Wayang Windu Geothermal Power Plant, Bandung, Pangalengan West Java Indonesia (Akhmad Dody Firmansyah/shutterstock.com)

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