TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Indonesia needs international cooperation to develop its geothermal power
Only 10 percent, 2.29 Gigawatts out of a potential 23 GW, of geothermal energy is being utilized in Indonesia.
Change Size
Indonesia is estimated to have some of the world’s greatest geothermal energy reserves. (Reuters/-)
A
s a country that is geographically located in the world's Ring of Fire, Indonesia has an abundance of geothermal potential. In fact, it is one of the largest in the world.
Yet only 10 percent, 2.29 Gigawatts out of a potential 23 GW, of geothermal energy is being utilized in Indonesia. The low utilization is the result of the high risk associated with geothermal explorations, along with high investment costs, collateral requirements and uncertainty around permits and licenses.
To better utilize the abundance of potential energy and ultimately to meet its renewable energy transition goals, the Indonesian government itself has actually prepared various instruments, including issuing various ease-of-doing-business regulations and policies to attract more investors.
On the operators’ side, for example, Pertamina's subsidiary Pertamina GeoThermal Energy (PGE) recently officially entered the Indonesia Stock Exchange (IDX) with fresh funds from the initial public offering (IPO) of Rp 9.05 trillion (US$603 million). This corporate action is part of efforts to support PGE's plan to develop the company's installed capacity of 600 Megawatts until 2027.
PGE aims to increase its self-operated installed capacity base from 672 MW to 1,272 MW in 2027, as well as to support PGE's ambition to continue growing and developing the entire value chain of Indonesia's geothermal resources, in accordance with PGE's tagline "Energizing green futures”.
The above recent developments have shown that the geothermal industry in Indonesia is moving toward a promising future. Therefore, this is the right time for Indonesia to increase its capabilities in all aspects through various collaboration maneuvers, not only domestically but also internationally. This partnership is important because relying on investment alone is not enough, international collaboration is needed as a place for knowledge sharing to be able to maximize the geothermal potential that exists in Indonesia.
As one of Indonesia’s strongest and longest-standing partners, New Zealand is ready to support Indonesia in increasing geothermal energy utilization. From a technical standpoint, New Zealand is the first country in the world to generate electricity from a liquid-dominated geothermal resource. As a result, New Zealand’s share of renewable generation in 2021 rose to 82.1 percent from 81.1 percent in 2020, on track to reach 100 percent renewable energy by 2035.
New Zealand has committed to continuing to assist Indonesia's geothermal development providing the resources and expertise that underscores our support for this important energy source. New Zealand also believes that geothermal energy has the potential to be a major contributor to Indonesia's renewable energy transition.
With that in mind, New Zealand's private sector always welcomes various forms of collaboration with the Indonesian government or private sector to develop the industry and train experts in the geothermal field.
To date, both the New Zealand government and private sector have partnered with Indonesian counterparts to develop the geothermal industry. New Zealand’s private sector is working with Indonesian geothermal developers through business-to-business (B2B) partnerships, leveraging their expertise and technology.
Meanwhile, the New Zealand government provides scholarships, builds capabilities and offers technical assistance through collaboration with New Zealand geothermal experts. These efforts are aimed at supporting Indonesia’s geothermal development. New Zealand strongly emphasizes investing in people, as it believes people are the foundation of success.
Aside from people and project development, there are opportunities for breakthroughs and innovations in geothermal, such as green hydrogen. For instance, Pertamina plans to launch a green hydrogen pilot project at the Ulubelu geothermal site in 2023. In New Zealand, several hydrogen demonstration projects are already underway., including a joint venture between Japan's Obayashi Corporation and the Maori-owned Tuaropaki Trust to commercially produce hydrogen using geothermal energy.
Given the extensive experience, New Zealand is committed to supporting Indonesia, which possesses vast potential for utilizing renewable energy, especially geothermal. We believe that with strong government support, commitment from developers and investors, and strategic international partnerships, Indonesia can achieve energy security, independence and transition fully to renewable energy utilization.
***
The writer is trade commissioner of New Zealand Trade Enterprise. The views are personal.
