JAKARTA (TheInsiderStories) – Indonesia needs US$15 billion in investment to meet its target of reaching 7.200 megawatts (MW) of geothermal power capacity by 2025, an energy ministry official said on Tuesday (08/13). The capacity would be an increase from less than 2.000 MW of geothermal power currently.

“Until now only 1,948.5 MW or 7.8 percent of the geothermal potential is utilized. To be able to boost 23 percent of renewable energy in 2025 geothermal is expected to be 7,200 MW. So an additional 5,000 MW is needed with funds of around $15 billion in the next 5 years,” Director General of Renewable Energy F.X. Sutijastoto told reporters at a conference on geothermal energy in Jakarta.

On the same occasion, Vice President Jusuf Kalla criticized the slow progress of geothermal power plants in Indonesia. Though the second largest geothermal power user in the world has quite a long experience.

“Everything has been decades, so if we can say that although the Chairman of the conference has been doing 7 times the progress is very slow. 7 times making exhibitions, the results have only reached 2,000 MW, (whereas) 30 years of experience,” Kalla said.

Not only geothermal, but Kalla also assessed the development of other renewable energy is also slow. For decades the new 8,000 MW renewable energy included hydropower, including some of it, wind, but the biothermal power plant has been a long time. So basically technology is not a problem because it can be mastered more easily, he added.

Therefore, the Vice President urges the Ministry of Energy and Mineral Resources (MEMR), state utility company PT Perusahaan Listik Negara (PLN) and other stakeholders together to solve the problem. Moreover, the government has targeted the use of new and renewable energy in the electricity sector to reach 23 percent by 2025.

And, of the total energy mix in the electricity sector, contributions from geothermal energy are expected to contribute up to 11 percent by 2025. Coal currently makes up around 60 percent of the country’s energy mix versus about 5 percent from geothermal power, according to data from PLN.

The MEMR is drafting up plans to accelerate ongoing projects to meet the target, Sutijastoto said, including reviewing the possibility of the government reimbursing some part of the development costs.

“We will see, things such as infrastructure, may be possible to be reimbursed by the government,” he said, referring to items such as roads or bridges built by the company to reach the geothermal power site.

PT Pertamina Geothermal Energy, a unit of state energy company PT Pertamina, is aiming to invest $2.7 billion in geothermal power through 2026, President Director Ali Mundakir told reporters at the conference. The company aims to increase its geothermal capacity to 1.1 GW by 2026 from 672 megawatts currently.

The government has also prepared a number of regulations that support the development of geothermal energy. Among other things, Government Regulation No.79/2014 concerning National Energy Policy, Presidential Regulation No.22/2017 concerning the National Energy General Plan, and MEMR Regulation No.50/2017 concerning Utilization of Renewable Energy Sources for the supply of electricity.

In these regulations, the government established a mechanism for selling prices of renewable energy electricity that was fairer for investors and PLN. In addition to these regulations, the government has also provided a legal umbrella for the use of renewable energy sources. These rules become the foundation in the utilization and management of geothermal energy.

Sutijastoto said geothermal energy has a strategic meaning for national energy security through the substitution of imported petroleum which is around 100,000 barrels per day until 2025. Petroleum itself is used to make Diesel Power Plants. Meanwhile, products derived from petroleum include LPG, aviation fuel, avgas, kerosene or kerosene, gasoline, diesel, asphalt, and paraffin.

In terms of operational effectiveness, geothermal can be operated up to 90 percent with an operating time of 30 years. Compare with coal which is only effective 60 percent of capacity. For diesel-electric power, it is even effective only 30 percent of capacity, and the operating time is only 10-20 years.

Not only that, but geothermal energy is also from the environmental side, emissions from geothermal energy are only around 75 grams per Kwh, far lower than the fuel oil which reaches 772 grams per Kwh. It is also much lower when compared to the new electric power whose emissions reach 945 grams per Kwh, Sutijastoto ended.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com