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).