Indonesia to Become World's Biggest Geothermal Power Producer in 2021?

Indonesia to Become World's Biggest Geothermal Power Producer in 2021?

In 2018 Indonesia is expected to become the world's second-biggest
geothermal energy producer, surpassing the Philippines that now lies second
after the United States. Meanwhile, Indonesia's Energy and Mineral Resources
Ministry projects Indonesia to become the world's largest geothermal power
producer by 2021. These developments are based on ongoing geothermal
development in Southeast Asia's largest economy.

Energy and Mineral Resources Ministry spokesman Dadan Kusdiana, explained
that Indonesia will surpass the Philippines to become the world's second
largest geothermal energy user in 2018 by generating geothermal electricity
of 2,023.5 megawatts (MW) through additional capacity stemming from the
Sarulla Geothermal Power Plant (2 x 110 MW), the Karaha Geothermal Power
Plant (30 MW), the Sorik Marapi Geothermal Power Plant (2 x 20 MW), and the
Lumut Balai Geothermal Power Plant (55 MW).

Based on the compiled roadmap, Indonesia will become the world's largest
geothermal energy producer, thus surpassing the United States, in 2021 with
geothermal electricity capacity reaching 3,559.5 MW. This achievement is
also supported by data that show geothermal sources in the Philippines are
declining, while there is no significant increase in geothermal development
in the United States due to the absence of incentives. By 2025 Indonesia
aims to reach its goal of 9,500 MW in geothermal power generation capacity.

Indonesia is estimated to control about 40 percent of the world's total
geothermal reserves, hence it contains huge potential for this renewable
energy. However, this potential remains largely untapped.

Currently, the utilization of geothermal energy for the purpose of power
generation in Indonesia has only reached 1,698.5 MW, or approximately 10
percent of the existing reserves, while it is estimated that there are at
least 331 potential geothermal locations spread across Indonesia that are
strategic for investment and can contribute significantly to meet national
energy needs.

Meanwhile, recently Indonesia and New Zealand announced to have strengthened
their long-term partnership for geothermal development. Both countries
(located on the pacific ring of fire) have already been working together in
Indonesia's geothermal power sector for four decades.

Trevor Matheson, New Zealand Ambassador, said New Zealand is eager to assist
Indonesia in tapping the latter's geothermal potential for usage in the
energy, tourism and agriculture sectors. Matheson believes Indonesia can
become the world's biggest geothermal player in the next decade provided
policy settings for geothermal resources are identified appropriately, along
with skills and training as well as the right strategy to attract investment
into this area.

One particular piece of advise given by Matheson is that the Indonesian
government should offer attractive incentives for investment into renewable
energy development. Secondly, social acceptance is key because communities
need to be taught the importance of geothermal power development. If
developed and used in the correct way, then geothermal energy helps to
protect the environment, people's livelihoods (in fact investment in
geothermal energy would cause job creation at the local level), while
ensuring their beliefs and cultures are respected. Such social acceptance
(support of local communities) is crucial.

Case Study: Baturaddan Geothermal Energy Plant

Besides social acceptance, careful construction of a geothermal power plant
is also crucial. For example, the USD $1 billion Baturaddan geothermal
energy plant that is being constructed in Central Jakarta met fierce
resistance as local communities are holding the construction project
responsible for muddying the Prukut River, one of their key sources of
freshwater. Mud and debris now also tumbles down in the Cipendok Waterfall,
one of the key destinations for local tourism.

It shows the development of geothermal power plants are not without social
and environmental risks (even though a relatively small part of the local
forest has to be cleared).

The Baturaddan geothermal plant, which is expected to generate 220 MW of
electricity from three turbines, is being developed by independent power
producer Sejahtera Alam Energy. Output will be transmitted to five districts
in Central Java: Banyumas, Purbalingga, Tegal, Brebes and Pemalang. The
plant is located at the slopes of Mount Slamet and the heat to drive the
plant's turbines therefore comes from this 3,428 meters tall active
strato-volcano.

Sejahtera Alam Energy obtained a 35-year concession from Indonesia's Energy
and Mineral Resources Ministry to develop a 24,660-hectares plot of land in
Baturraden in 2010. Currently, its first well is in the exploration phase,
while the plant is estimated to become fully operational by 2022.

What is also worth noting is that Herman Afif Kusumo, Commissioner of
Trinergy Mandiri International (which owns a stake in Sejahtera Alam
Energy's parent company), was mentioned in former Energy Minister Jero Wacik
corruption scandal as Kusumo had paid a costly birthday party (reportedly
worth IDR 349 million or approx. USD $26,500) for Wacik in Hotel
Dharmawangsa (Jakarta). The acceptance of this "gift" is in violation of
Indonesia's corruption law. Wacik was sentenced to four years in prison and
a IDR 150 million fine by the Jakarta Anti-Corruption Court in February 2016
after being found guilty of being involved in two embezzlement cases.

The local community continues to demonstrate against the development of the
Baturaddan geothermal plant and urge Indonesian President Joko Widodo to
revoke developers' permits.

Meanwhile, earlier this year a grant worth €7.72 million from German
development bank KfW Germany for the construction of the Seulawah geothermal
plant in Aceh was cancelled as the soft loan was considered to have a too
high interest rate (at 4 percent).

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Link to Original
Article: https://www.indonesia-investments.com/news/news-columns/indo
nesia-to-become-world-s-biggest-geothermal-power-producer-in-2021/item8191

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com




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