Indonesia struggles to tap volcano power

Indonesia struggles to tap volcano power

Columns of steam shoot from the ground at an Indonesian power plant sitting
in the shadow of an active volcano, as energy is tapped from the red-hot
underbelly of the archipelago.

Pipes zig-zag up rugged mountainsides covered in tea plantations, carrying
steam from the Earth's core to power enormous, electricity-generating
turbines at the Wayang Windu facility on Java island.

Indonesia, a seismically-active island chain studded with scores of
volcanoes, holds an estimated 40% of the world's geothermal energy reserves,
but has long lagged behind in its use of the renewable power source.

Now the government is pushing to expand the sector five-fold in the next
decade, although the challenges are huge in a country where the burden of
red tape remains onerous, big projects are often delayed and targets missed.

"The potential is tremendous," said Rully Wirawan, field manager at Wayang
Windu. "The current government is trying to tackle the challenges so I
believe the development of the sector will be better in future."

Geothermal, a clean energy source which releases negligible amounts of
greenhouse gases, unlike burning dirty fossil fuels, is mostly found in
seismically-active areas around tectonic plate boundaries.

The Earth's heat emanating through the fault lines warms underground
reservoirs, and the resulting steam can be channelled to geothermal energy
plants.

Fossil fuel addiction

The majority of Indonesia's power is generated from its abundant reserves of
coal and oil.

It currently has installed capacity to produce about 1,400 megawatts of
electricity from geothermal, enough to provide power to just 1.4 million
households in the country off 255 million.

That is less than 5% of geothermal's estimated potential and behind the
world's two leading producers of the energy source, the United States and
the Philippines.

But the government is aiming to increase Indonesia's generating capacity to
around 7,200 megawatts by 2025, as part of a broader plan to boost the
renewables sector, which would likely make it the world's top producer of
the power source.

A major part of the drive is a law passed two years ago that means
geothermal exploration is no longer considered mining activity, as it was
previously.

The old definition had held up the industry as mining cannot be carried out
in the country's vast tracts of protected forests, believed to contain about
two-thirds of Indonesia's geothermal reserves.

The government is also seeking to sweeten local administrations - which had
sometimes resisted the construction of the steam-belching facilities - by
offering them up to one percent of revenue from any geothermal plant in
their area.

Abadi Poernomo, chief of the Indonesian Geothermal Association, which
represents companies involved in the sector, is upbeat about future
prospects: "A lot of investors from abroad are coming to Indonesia with the
intent to develop geothermal".

High costs, red tape

Still, the challenges are enormous. While achieving the 2025 target may be
possible, it will be extremely difficult, said Daniel Wicaksana, an energy
expert at consultancy Frost and Sullivan Indonesia.

One of the biggest problems is the high exploration costs needed at the
outset, as checking for potential geothermal reserves is a complex,
time-consuming business, that is not always successful.

Building a geothermal plant costs the equivalent of $4 to $5 million dollars
per megawatt, compared to $1.5 to $2 million for a coal-fired power station,
according to the association.

Investors have also complained about what they say is the relatively low
price offered by the state-run power company to buy electricity from a
geothermal facility, which they claim usually doesn't cover the large
initial outlay.

To top it all off, Indonesia's complicated bureaucracy puts many off - 29
permits are required from different government agencies and ministries for a
geothermal plant, and time-consuming negotiations with powerful local
administrations can also hamper progress.

"The level of complexity to complete the necessary paperwork, at the local
level especially, also adds to the slow development of geothermal," said
Wicaksana.

Green groups have also questioned authorities' commitment to geothermal in
the near term - a plan by the government to ramp up electricity-producing
capacity dramatically by 2019 seems more focused on building coal-fired
power stations than expanding the use of renewable energy sources.

Wayang Windu, which is jointly managed by independent company Star Energy
and state-owned energy giant Pertamina and takes its names from the active
volcano near the plant, illustrates some of the challenges.

Exploration first began at the site in 1985 but it was not until 15 years
later that the plant began producing electricity commercially, while work on
a new unit to boost power generation has been delayed due to negotiations
over cost.

Even officials admit achieving the government geothermal target will be
tough.

Ego Syahrial, the head of the government's geology agency, which assesses
geothermal energy reserves conceded: "The progress is not very encouraging
to be honest."

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Ref:
http://www.rappler.com/world/regions/asia-pacific/indonesia/bahasa/englished
ition/147268-indonesia-geothermal-energy

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com