With around 29,000 MW, Indonesia has the world’s greatest potential in the field of geothermal energy. Indonesia can 40% of the world’s available geothermal energy in its own country. The huge archipelago sits on a long chain of volcanoes. Therefore, new geothermal power plants are emerging everywhere. The increase in power generation capacity is an absolute priority for the Indonesian Government. In order to cope with the rapidly growing electricity consumption, it relies mainly on the construction of new coal and gas power plants. At the same time, the archipelago is also striving to increase the share of renewable energies at the mix. Currently, the share of renewables at the mix is 5-6%. An increase of 19% is planned up to 2019 and 25% to 2025.
At the end of 2014, according to the Indonesian Ministry of Energy, renewable energies with a total capacity of almost 11,000 MW were installed. 70% of this was due to hydro power. The remainder were divided into roughly equal parts of geothermal energy and biomass.
In the development of renewable energies, Indonesia relies almost exclusively on water, geothermal energy and biomass. The Government is particularly strongly seeking to push geothermal energy forward. The Southeast Asian archipelago is located on a long line of volcanoes called the Ring of Fire. Therefore, 40% of the world’s (theoretically) usable geothermal energy is to be located in Indonesia.
The Energy and Mineral Resources ministry quantifies the geothermal potential of Indonesia to almost 29,000 MW. More than half of these would be highly likely to be realised. The authority speaks of around 300 places where power plants could be built. Currently, there are only a few plants with a total capacity of 1,400 MW, making Indonesia the world’s number two. However, the government’s investment wave is not just about the electrification of the country. This should also be done in an environmentally friendly and climate-protecting way. According to the Indonesian Geothermal Association (API), Indonesia’s oil consumption can be reduced by 60 million barrels per year by using geothermal energy. However, a value of almost 5,000 MW is to be reached already 2019.
In August 2014, the Indonesian Parliament issued a new law to simplify investments in geothermal energy. In this way, corresponding power plants can now also be created in protected forest areas. Up to now, geothermal plants have been treated as mines.
Nevertheless, the first steps in the field of geothermal production are likely to be made by state-owned companies, and the environment is still too uncertain. For example, the public company Pertamina announced that it would want to operate up to 2025 geothermal in the range of 2,300 MW in Indonesia. At the middle of the year 2014 it had only geothermal with a total capacity of 400 MW in operation. The targeted investment costs amount to around $4 billion.
There are special feed-in tariffs for renewable energy, some of which are many times higher than for electricity from coal-fired power plants. In principle, the smaller the plants, the higher the remuneration. The state energy group PLN is the sole administrator of the national network. It sets the tariffs with appropriate political support.
New line of Power Energy
Wind Power Energy is also being develop throughout Indonesia. UPC Renewables as one of main renewables energy developer in Indonesia has been exploring and developing renewable energy projects in Indonesia. Brian Caffyn UPC as Chairman of the company is very interested in landscape of energy in Indonesia.