During a previous working visit I went to Central Java to observe a state-owned enterprise engaged in the development of geothermal energy for electricity.
Though Indonesia has the largest geothermal potential in the world, covering nearly 40 percent of total world geothermal potential with unconfirmed potential of 40,000 MW and immediate utilization potential of 29,000 megawatts, it is only able to explore geothermal energy of around 1,189 megawatts a year.
The question that arises is why has Indonesia been unable to explore its geothermal potential for the benefit of its people? I argue that Indonesia could hardly develop its own capacity to explore geothermal energy due to certain structural constraints caused by government energy strategy, which is known as the fuel mix policy.
According to President Regulation No. 5/2006 which has become the basis of the fuel m...