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JETP could help drive Indonesia’s geothermal growth
While the JETP scheme could help jump-start growth in Indonesia’s geothermal power, but experts say the industry is still mired in high development costs, price uncertainty and unfavorable regulations.
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The Rantau Dedap I geothermal power plant (PLTP) in South Sumatra, operated by PT Supreme Energy Rantau Dedap (SERD), releases steam as it generates electricity in this undated handout photo. The Rantau Dedap I PLTP commenced operations in December 2021. (Courtesy of Supreme Energy/-)
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he Just Energy Transition Partnership (JETP) could propel geothermal energy growth in Indonesia, experts say, but this hinges on the government’s ability to provide legal certainty, incentives and clear prospects for the renewable energy.
Experts told the The Jakarta Post that the domestic geothermal industry was hedged in by high development costs on the one hand and uncertainty in electricity offtake pricing on the other, which clouded the economic prospects for undertaking local projects.
Andri Prasetiyo, a researcher at Senik Centre Asia, told the Post on Monday that high development cost of geothermal is partly caused by high social cost due to conflicts with locals inhabiting the area, which makes these projects not “clear” despite classified as clean energy.
Financing from a scheme like JETP, could only support these projects if Indonesia could ensure it is both clean and clear, as JETP wont risk its reputation for dealing with projects with high social risk, he said.
Data from the Energy and Mineral Resources Ministry shows that the total installed geothermal power generation capacity in Indonesia was 1.9 gigawatts in 2018. It then rose 21 percent over the next four years to reach 2.3 GW last year.
According to state electricity company PLN’s latest 10-year Electricity Supply Business Plan (RUPTL), Indonesia aims to increase its total installed geothermal capacity to 2.39 GW by 2030, or just 10 percent of its 23.96 GW potential capacity.
The government aims to install a total of 9.3 GW by 2035, which would require an additional 7 GW of installed capacity.
