Indonesia Faces Headwind in Geothermal Exploration

Despite the government’s ambitious target, the transition into sustainable energy sources is expected to be winding. For instance, the change into geothermal energy needs extra attention to boost investments in geothermal, touted to be the cheapest green energy source.

Tim Redaksi

24 Okt 2023 - 20.41
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Indonesia Faces Headwind in Geothermal Exploration

Illustration - Geothermal plant area./Bisnis

Bisnis, JAKARTA — The government continues extensively pushing for a transition to more sustainable energies. The development of geothermal power plants has been touted as a shortcut to achieving this goal. However, these efforts are easier said than done. 

Fahmy Radhi, the economic energy observer from UGM, outlined three obstacles that hinder geothermal energy utilization in Indonesia. Despite Indonesia having the third-largest geothermal reserve potential in the world, Fahmy explained the first obstacle is the permitting process. Although the government has established a one-stop permit system, various obstacles, especially land acquisition, have emerged.

Most geothermal projects are classified as national strategic projects (PSN), with land acquisition regulated by Law No. 2/2012 concerning Land Procurement for Public Purposes, which should make land acquisition easier.

The second obstacle is infrastructure. Fahmy explained that geothermal resources are often in mountainous, forested, and remote areas with poor access. Some investors must build their infrastructure, leading to high costs and reduced economic viability.

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Editor: Yusuf Waluyo Jati
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Indonesia Faces Headwind in Geothermal Exploration

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