Lack of social acceptance and private funding hold back geothermal in Indonesia

Drilling rig on site at Muara Laboh geothermal project, Indonesia (source: Sumitomo)

Opposition from local communities and the lack of interest from the private sector continue to be challenges in accelerating the growth of the geothermal sector in Indonesia.

This was the sentiment shared by Indonesia’s Director General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources (MEMR), Eniya Listiani Dewi during the Green Economy Expo 2024 held at the Jakarta Convention Centre. Indonesia has the second highest geothermal power generation capacity in the world, lagging only behind the United States. It also still has plenty of untapped potential, especially as the government had set a target of 3.3 GW of additional capacity by 2030.

However, geothermal projects in several sites in Indonesia have been met with opposition from local communities. “Sometimes, local residents do not understand that drilling will bring electricity,” commented Eniya. Thus, the Director General encourages all parties who understand the potential of geothermal to get involved in explaining to the general public that the industry can provide an environmentally friendly energy supply.

“I ask for everyone’s collaboration to be able to explain to residents that drilling for geothermal is an effort to accelerate the baseload for electricity supply,” said Eniya.

Lack of private investment

There has also been a lack of interest from industry players to invest in and develop geothermal power projects. This year, PLN had to return three Geothermal Working Areas (WKPs) – namely Danau Ranau, Gunung Sirung, and Oka Ile Ange – to the MEMR because the exploration license for these areas had expired. PLN has also revealed that the Kepahiang WKP will be re-auctioned after the potential partnership with Star Energy Geothermal fell through.

According to Eniya, some investors are worried that the demand for electricity  in certain geothermal sites will be low. However, this can be remedied by using the power for green hydrogen production. “If we invest for 10 MW and the demand is only 2 MW, then the remaining 8 MW can be used for conversion to hydrogen,” Eniya explained.

Earlier this year, the Kamojang geothermal power plant by PLN became the first geothermal-powered green hydrogen producer in Indonesia.

The Government of Indonesia continues to help facilitate the development of geothermal projects thru the government drilling program for greenfield areas. This aims to alleviate the burden of discovery risk from private developers when investing in a geothermal prospect. “After the steam comes out, the project will then be offered to the industry to accelerate its growth,” said Eniya. “Hopefully, this will be a trigger for us to accelerate the use of geothermal energy.”

Source: Kompas.com and Kontan.co.id