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The Government Steps to Speed up the Development of Geothermal Energy

  • The government has a significant role and responsibility to promote renewable energy, which is one of the three focuses of the G20 Presidency of Indonesia.
  • The government expects geothermal development to reach 8,007.7 MW over the next decade (2020-2030).
  • The Ministry of Energy and Mineral Resources conveyed a number of steps and policies taken to meet these targets.

The government has a significant role and responsibility to promote renewable energy, which is one of the three focuses of the G20 Presidency of Indonesia. Indonesia has pledged to achieve Net Zero Emissions by 2060. To get there, the government intends to achieve of a 23% renewable energy mix by 2025 and a 29% reduction in greenhouse gas emissions by 2030. Geothermal power plants are one type of renewable energy that can replace steam power plants (PLTU) as a peak load generator (base-load).

Geothermal has a potential of around 23.9 GW, causing it a renewable energy source that is expected to boost the realization of 23% renewable energy mix by 2025. Aside from its non-fuel use, geothermal is also eco-friendly and contributes significantly to the development of regional infrastructure and the economy in the surrounding area.

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The government expects geothermal development to reach 8,007.7 MW over the next decade (2020-2030). It means that, with the current installed capacity of 2,130.7 MW, about 177 geothermal development projects with a total capacity of about 5,877 MW are still required until 2030.

The Indonesian government has stated that it will speed up the development of geothermal power plants. The government plans to build a geothermal power plant with a capacity of 3,355 MW until 2030 in order to meet the renewable energy mix target of 23% by 2025.

The Ministry of Energy and Mineral Resources conveyed a number of steps and policies taken to meet these targets. First, geothermal exploration and drilling will be carried out in order to improve the quality of geothermal area data that will be offered to business entities. The government will conduct government drilling to reduce the developer risk and the selling price of geothermal electricity. The government will drill in 20 geothermal working areas until 2024, for a total development plan of 683 MW.

Second, the preparation of an incentive scheme or rate arrangement that considers the economics of the geothermal power plant project, as well as the use of PISP (Geothermal Sector Infrastructure Financing) funds and GREM (Geothermal Resources Risk Mitigation) funds for geothermal development funding.

Third, synergy between SOEs in geothermal development. So far, at least three SOEs are active in the geothermal sector: PT Pertamina Geothermal Energy (PGE), a subsidiary of PT PLN, PT Indonesia Power (a subsidiary of PT PLN), and PT Geothermal Energy Dipa, an SOE under the Ministry of Finance.

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Fourth, by expanding and developing small-scale power plants, WKP’s existing geothermal resources can be optimized. Two of them are constructing a 15 MW Binary PLTP in WKP Salak, as well as a Binary PLTP in WKP Dieng (10 MW). PT PGE is currently finishing the Binary PLTP in WKP Lahendong, North Sulawesi, with a capacity of 0.5 MW.

The installed capacity of geothermal plants in Indonesia will reach 2,276 MW by the end of 2021, with the majority of them located in the PGE Working Area, which has a capacity of 1,877 MW. PGE manages 13 Working Areas with a total capacity of 672 MW that operate independently, as well as 1,205 MW through a Joint Operation Contract (JOC).

Besides being used as a source of electrical energy, geothermal energy can also be used directly for various purposes, one of which is in the tourism sector. As the Ministry of Energy and Mineral Resources said, “High geothermal conversion efficiency, ranging from 80-90 percent, is a very good potential for direct use, including for tourism.”

Editor: Riana Nurhasanah

References:

Yurika. (2022). Potensi Besar, Pemerintah Percepat Pengembangan Panas Bumi. Diakses pada 21 April 2022 dari https://www.dunia-energi.com/potensi-besar-pemerintah-percepat-pengembangan-panas-bumi/

EBTKE. (2020). Ini Strategi Pemerintah Untuk Percepatan Pengembangan Panas Bumi. Diakses pada 21 April 2022 dari https://ebtke.esdm.go.id/post/2020/06/18/2562/ini.strategi.pemerintah.untuk.percepatan.pengembangan.panas.bumi

Amanda, G. (2022). Pertamina Ungkap Enam Langkah Percepat Pengembangan EBT. Diakses pada 21 April 2022 dari https://m.republika.co.id/berita/rajdxy423/pertamina-ungkap-enam-langkah-percepat-pengembangan-ebt

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Alifia Salsabila Fajari

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