Indonesian President Joko Widodo (often called Jokowi) emphasized that the government of Indonesia needs to boost development of renewable energy. Although Indonesia contains huge potential for renewable energy (particularly geothermal energy), the share of renewable energy in Indonesia’s total energy use currently stands at around 5 percent only, the remainder being fossil energy. By providing incentives, attractive tariffs and an easier licensing and registration process, the government can generate more investment in this sector.
Recently, the Indonesian government set a target to raise the share of renewable energy in the country’s total energy mix to 19 percent by the year 2019, hence significantly reducing the role of oil in the country’s energy mix. Currently oil accounts for 47 percent of Indonesia’s energy use and makes the country dangerously susceptible to the effects of volatile global oil prices.
Indonesia is estimated to have a geothermal energy potential of roughly 29 GW, or about 40 percent of the world’s total geothermal reserves, on the islands of Sumatra, Java and eastern regions such as the Moluccas and Papua. However, the country only uses a fraction of this potential.
Recently, Widodo announced the construction of six geothermal power plants spread across several provinces in Indonesia: (1) The Ulubelu II geothermal power plant in Lampung (Sumatra). Two new units (III and IV) of 55 MW, each, are being constructed and are located next to the 110 MW Ulubelu I geothermal facility. The project is operated by state-owned Pertamina Geothermal Energy. (2) The Lahendong unit V in Minahasa (Sulawesi) with a capacity of 2x20 MW. (3) The Kamojang unit V plant near Bandung (West Java) with a capacity of 35 MW. (4) The Karaha unit I in Tasikmalaya (West Java) with a capacity of 30 MW. (5) The Lumut Balai unit I and II in South Sumatra with a capacity of 55 MW and (6) the Kerinci unit I in Jambi (Sumatra) with a capacity of 55 MW.
Widodo also stated that, if necessary, the government should create a new state-owned company that manages the country’s geothermal power.
Other renewable energies that need to be developed by Indonesia include biofuel, biomass, hydro, wind, solar, and water energy. At the opening of the International Geothermal Convention & Exhibition 2015 (held in the Jakarta Convention Center) on Wednesday (19/08), President Widodo also said he wants the domestic palm oil industry to reduce its reliance on crude palm oil (CPO) shipments, instead processing the products into semi-finished (or finished) products before shipment abroad. Currently many smaller palm oil producers are facing tough times as the CPO prices have been declining since 2009. Indonesia is the world’s largest palm oil producer and exporter. Together with Malaysia, these countries account for nearly 85 percent of the globe’s total palm oil output.
In 2014 Indonesia’s electrification ratio stood at 81.5 percent (implying that there are still dozens of millions of Indonesians who lack access to electricity). In his first presidential term Jokowi targets to raise this ratio to 96.9 percent by 2019.