Geothermal energy: Indonesia shows some latent steam

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Geothermal potential in Indonesia (Click to enlarge)

One of the world’s most volcanically active countries, Indonesia has a daunting geography that, though at times self destructive, could be harnessed with modern technology to create a regional powerhouse.

It is estimated that Indonesia has over 40 per cent of the world’s potential geothermal resources, or 29,000 megawatts. Yet the vast, disparate Southeast Asian archipelago is currently only able to produce 1.341 megawatts from 15 geothermal sites, only eight of which are currently active, accounting for just 5 per cent of the total potential, according to data from the energy and mineral resources ministry.

Geothermal energy is clearly a poorly managed opportunity, one that the Indonesian government has only just woken up to.

For 2013, Indonesia has allocated $302 million for the exploration of geothermal energy, a project to be managed by an attached agency of the ministry of finance.

The push also opens up gateways for foreign investors, who have been invited to apply for loans to explore geothermal energy in the country through the appointed finance ministry agency. Of the heavyweights already leading the pack is Chevron, which is surveying the Gunung Geureudong geothermal field in Sumatra’s Central Aceh, one of three being explored now.

Foreign investment has been further incentivised into geothermal with an immanent announcement that the government will raise the purchase price of energy produced from the renewable source of energy.

The increased rates for geothermal-produced electricity, which will be dependent on capacity and enthalpy, or heat content, will help resolve a number of challenges developers have come up against. Of the most glaring, 12 geothermal projects are stalled due to financial issues, as companies usually are forced to operate in remote locations, making exploration expensive.

But year to date, there has already been some steam seen in the industry.

So far in 2013, the government has issued permits for the development of seven geothermal plants in Sulawesi, Java and Sumatra with an estimated total capacity of 787 megawatts. Of the incoming entourage of new plants, the largest will be the Arjuno Welirang plant in East Java, which will have an installed capacity of up to 280 megawatts.

In July 2012, Indonesia rose the feed-in tariff scheme for geothermal plants from 9.7 cents per kWh to between 10 and 17 cents per kWh, depending on the region: prices are 10 cents per kWh in Sumatra, 11 cents in Java and 17 cents in Papua, for example.

As pressure mounts to meet rising energy demand, Indonesia will find that it sits in a unique position. Renewable energy accounts for more than 50 per cent of newly installed electricity capacity, a total of $251 billion as of 2011. With more and more Indonesians and those in the region rising into newly found affluence, tapping into energy found right at the doorstep will make a world of a difference.

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Reading Time: 2 minutes

Geothermal potential in Indonesia (Click to enlarge)

One of the world’s most volcanically active countries, Indonesia has a daunting geography that, though at times self destructive, could be harnessed with modern technology to create a regional powerhouse.

Reading Time: 2 minutes

geothermal_energy_in_indonesia
Geothermal potential in Indonesia (Click to enlarge)

One of the world’s most volcanically active countries, Indonesia has a daunting geography that, though at times self destructive, could be harnessed with modern technology to create a regional powerhouse.

It is estimated that Indonesia has over 40 per cent of the world’s potential geothermal resources, or 29,000 megawatts. Yet the vast, disparate Southeast Asian archipelago is currently only able to produce 1.341 megawatts from 15 geothermal sites, only eight of which are currently active, accounting for just 5 per cent of the total potential, according to data from the energy and mineral resources ministry.

Geothermal energy is clearly a poorly managed opportunity, one that the Indonesian government has only just woken up to.

For 2013, Indonesia has allocated $302 million for the exploration of geothermal energy, a project to be managed by an attached agency of the ministry of finance.

The push also opens up gateways for foreign investors, who have been invited to apply for loans to explore geothermal energy in the country through the appointed finance ministry agency. Of the heavyweights already leading the pack is Chevron, which is surveying the Gunung Geureudong geothermal field in Sumatra’s Central Aceh, one of three being explored now.

Foreign investment has been further incentivised into geothermal with an immanent announcement that the government will raise the purchase price of energy produced from the renewable source of energy.

The increased rates for geothermal-produced electricity, which will be dependent on capacity and enthalpy, or heat content, will help resolve a number of challenges developers have come up against. Of the most glaring, 12 geothermal projects are stalled due to financial issues, as companies usually are forced to operate in remote locations, making exploration expensive.

But year to date, there has already been some steam seen in the industry.

So far in 2013, the government has issued permits for the development of seven geothermal plants in Sulawesi, Java and Sumatra with an estimated total capacity of 787 megawatts. Of the incoming entourage of new plants, the largest will be the Arjuno Welirang plant in East Java, which will have an installed capacity of up to 280 megawatts.

In July 2012, Indonesia rose the feed-in tariff scheme for geothermal plants from 9.7 cents per kWh to between 10 and 17 cents per kWh, depending on the region: prices are 10 cents per kWh in Sumatra, 11 cents in Java and 17 cents in Papua, for example.

As pressure mounts to meet rising energy demand, Indonesia will find that it sits in a unique position. Renewable energy accounts for more than 50 per cent of newly installed electricity capacity, a total of $251 billion as of 2011. With more and more Indonesians and those in the region rising into newly found affluence, tapping into energy found right at the doorstep will make a world of a difference.

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