Indonesia’s Geothermal Development Faces Headwind

The fees, financing, and utilization of power wheeling have yet to be resolved in developing geothermal power. Provisions of the domestic component level are also deemed to obstruct geothermal energy development.

Ibeth Nurbaiti

16 Jan 2024 - 18.32
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Indonesia’s Geothermal Development Faces Headwind

Illustration - The geothermal plant site.

Bisnis, JAKARTA — The slow development of geothermal energy in the country has made the government pessimistic about achieving the target of a 23% share of new renewable energy (NRE) in the national energy mix. Several issues still pose challenges that need immediate resolution, considering geothermal energy's potential to become the backbone of national energy.

With a geothermal potential of 23,060.4 megawatts (MW) and current utilization at only 2,372.13 MW (10.3%), the prospects for developing this energy source are significant in supporting energy transition and resilience. 

On the other hand, issues related to tariffs, funding, and shared utilization of the electricity network or power wheeling remain unresolved in geothermal development. The domestic component level (TKDN) is also seen as a hindrance to geothermal acceleration.

Julfi Hadi, President Director of PT Pertamina Geothermal Energy Tbk. and chairman of the Indonesian Geothermal Association (API), emphasized the need for collaboration between businesses, the government, and the state-owned power company PT Perusahaan Listrik Negara (PLN) to accelerate the energy transition.

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Editor: Yusuf Waluyo Jati
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Indonesia’s Geothermal Development Faces Headwind

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