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21 April 2025 (closed)
Jakarta Composite Index (6,445.97) +7.70 +0.12%
Geothermal Power Development in Indonesia Meets Resistance on Flores
Indonesia has impressive potential for geothermal power. However, the country struggles to tap the potential of this renewable energy source. Not only does it prove difficult to encourage investment in exploration and exploitation, but sometimes there also exists resistance from the local population.
The latest example to illustrate local resistance to geothermal power in Indonesia comes from the island of Flores where the Christian community objects to the development of this clean energy as it has a particularly negative impact on the local environment due to the island's topography (hilly and mountainous) and (related) lack of surface water sources.
Marsellinus Ado Wawo, General Chairman of the Communication Forum of the Flobamora Community (Forum Komunikasi Komunitas Flobamora), said that the local population and relegious community on Flores oppose the development of geothermal energy on Flores after witnessing the negative side-effects in existing projects. Wawo refers to toxic gases that can leak from a project (potentially causing casualties) and water pollution in rivers (not only making the water undrinkable but also unusable for agriculture, hence causing economic damages).
East Nusa Tenggara Governor Melkiades Laka Lena responded to the issue saying that he has already formed an investigation team that will do research into the claims made by the local community.
David Eko Prasetyo, Senior Manager for Licensing, Land Affairs, and Communication at state-owned electricity company Perusahaan Listrik Negara (PLN)'s East Nusa Tenggara unit, said PLN respects all views held among relevant parties and believes that renewable energy development needs to be fully in line with environmental, social, economic and cultural principles.
Prasetyo added that Flores is estimated to have geothermal power capacity potential of around 1,036 megawatts (MW). However, today, installed geothermal power capacity only stands at 104 MW. Meanwhile, electricity consumption is estimated to rise by 8.3 percent year-on-year (y/y) on the island. Therefore, investment in renewable energy is important to meet future demand, in a sustainable way.
Two geothermal power plants that are already in operation on Flores are found in Ulumbu and Sokoria.
Indonesia, the Geothermal Powerhouse
Indonesia is estimated to hold the world's largest geothermal power potential, at around 28-29 Gigawatts (GW). This is about 40 percent of the world's total geothermal resources. Its secret is the country's unique geological location along the Pacific Ring of Fire, with numerous active volcanoes. This offers a significant advantage for geothermal energy development as it means that the Earth's heat is found closer to the surface, potentially reducing drilling costs.
Despite the potential, utilization of geothermal energy is still relatively low in Indonesia, contributing only a small fraction (around 3-5 percent) to the country's total electricity generation. As of early 2025, Indonesia's installed geothermal power capacity stood at around 2.6 GW, thus being the world's second-largest geothermal power producer (after the United States).
Several factors contribute to the slower-than-expected development of geothermal energy in Indonesia, such as:
- High upfront exploration costs because it is expensive to drill wells for exploration and it is also risky as a significant chunk of exploration fails;
- Technological difficulty: it takes complex engineering and technological challenges to develop geothermal fields and construct power plants;
- Environmental concerns: geothermal drilling and plant operations can have a negative impact on the environment;
- Regulatory and market challenges: Indonesia is known for its complex permitting processes and land acquisition issues
- Electricity rates (set by PLN) are not competitive; and
- Financing: securing adequate financing for large-scale geothermal projects can be challenging.
Installed Production Capacity in Indonesia per Renewable Energy Source (MW):
| Renewable Energy | 2019 | 2020 | 2021 | 2022 | 2023 | 2024* |
| Wind | 152.3 | 152.3 | 152.3 | 152.3 | 152.3 | 152.3 |
| Solar | 142.7 | 170.7 | 207.7 | 292.3 | 600.0 | 675.2 |
| Bioenergi | 2,113.0 | 2,251.9 | 2,315.8 | 3,122.6 | 3,393.4 | 3,448.4 |
| Geothermal | 2,434.4 | 2,434.4 | 2,532.8 | 2,539.4 | 2,597.5 | 2,597.5 |
| Hydro | 5,539.8 | 5,604.5 | 6,372.5 | 6,464.8 | 6,569.6 | 6,697.2 |
| Coal Gasification | - | 250.0 | 250.0 | 250.0 | 250.0 | 250.0 |
| Total | 10,382 | 10,864 | 11,831 | 12,821 | 13,563 | 13,781 |
* per June
Source: Ministry of Energy and Mineral Resources
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- info@indonesia-investments.com
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