Indonesia and New Zealand have been economic and trade partners for so long that there is no more significant partner for New Zealand in this region. Indonesia was New Zealand’s seventh largest export market for the year ending June 2009 and for the same period trade between the two countries was worth over US$1.5 billion FOB. Indonesia is New Zealand’s largest trading partner in ASEAN.
The New Zealand and Indonesian markets are complementary and largely non-competitive. New Zealand primarily imports petroleum products and some manufactured goods from Indonesia; in return, Indonesian consumers enjoy New Zealand primary produce, such as beef and dairy products.
In many cases, New Zealand provides the raw materials for Indonesian manufacturers of, for example, confectionery, processed dairy products and meat dishes. New Zealand companies are also exploring the potential for substantial investments and partnerships between the two countries in other sectors such as agriculture, education and healthcare, while Indonesian companies are showing an increasing interest in investing in New Zealand.
Clean energy development holds the potential to be another viable sector for an investment partnership between the two nations.
New Zealand sits in the southern Pacific Ocean, while Indonesia lies in the tropics: Both countries have considerably different environments. We share, however, one important geographical aspect: Both of us are situated on the Pacific Ring of Fire, among the world’s most active volcanic zones. We are thus are both blessed with abundant geothermal energy resources.
Indonesia has an enormous amount to gain from exploiting geothermal power. By some estimates, Indonesia has the world’s largest geothermal power development potential, at around 28,100 megawatts (MW). Currently approximately 1,100MW of this is being utilized, with plans to develop another 3,000MW in the next four years.
New Zealand began developing geothermal power in the 1950s, and currently enjoys geothermal generation of around 800MW. With a strong national commitment to sustainable energy, there are plans to increase this to around 2,000MW by 2020.
In New Zealand, geothermal energy is currently the second-most used renewable fuel for electricity generation, after hydropower. And with government’s aim to generate 90 percent of its electricity requirements from renewable sources by 2025, research, exploration and infrastructure investments into geothermal energy development in New Zealand are expected to rise further.
New Zealand remains at the forefront of aspects of geothermal research and development. For example, scientists at the Institute of Geological and Nuclear Science are developing three dimensional modeling technology that will allow geologists to precisely model geothermal resources underground.
New Zealand has the largest single direct use application for industrial purposes at a large pulp plant in Kawerau, near the center of New Zealand’s North Island, with forest products being one of New Zealand’s primary industries. In the last two years, major power plants have been commissioned with the latest one on the Rotokawa field, also in the central North Island, being the largest single geothermal power turbine in the world generating just over 140MW.
Fully developed, the geothermal energy reserves of Indonesia could power the entire archipelago, while enabling the country to reduce greenhouse emissions and its dependence on fossil fuels. Geothermal is less damaging to the environment, and will provide reliable energy that is most cost effective in the long-term.
With these developments in mind, now is an opportune time for the two countries to deepen their collaboration and share expertise. Indonesia and New Zealand can learn from each others’ experience in this field, particularly geothermal research and exploration, technology, and in power generation. Indeed, many Indonesian geothermal experts received training at the University of Auckland’s world-leading Geothermal Institute, and there are further opportunities for Indonesian students in this field.
In fact, New Zealand engineers, working with New Zealand Government Development grants and their Indonesian partners, developed Indonesia’s first geothermal power plant, in Kamojang. New Zealanders have been involved in Indonesia’s geothermal industry ever since, and most recently, our engineers helped develop Wayang Windu II, a geothermal plant near Pangalengan in West Java. As you read this, New Zealand geothermal practitioners will be meeting with their Indonesian counterparts at the World Geothermal Congress in Bali, the largest gathering of geothermal expertise of its kind in the world.
The opportunity for further collaboration in Indonesia is immense. Given the challenge both countries, and indeed the world, face from climate change and the carbon emissions that cause it, the level of interest in clean energy sources is higher than it’s ever been. Geothermal has a natural place in the solution to this great challenge, and Indonesia and New Zealand are natural partners in harnessing the geothermal power both countries have in abundance.
The writer is New Zealand Trade and Enterprise’s Regional Director for South and Southeast Asia.