government’s efforts to achieve indonesia’s national ...the exploration phase normally...
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Proceedings World Geothermal Congress 2020
Reykjavik, Iceland, April 26 – May 2, 2020
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Government’s Efforts to Achieve Indonesia’s National Energy Plan on Geothermal
Development: 9300 MW by 2030
Aulia Rizky Pratama1, Havidh Nazif2
Directorate General of New and Renewable Energy, and Energy Conservation, Ministry of Energy and Mineral Resources
[email protected], [email protected]
Keywords: National Energy Plan, Indonesia, government programme, geothermal business scheme, investment opportunities.
ABSTRACT
Indonesia is one of the biggest developing countries in Asia. In order to fulfil the national energy demand and maintain sustainable
development, the government of Indonesia has set the National Energy Plan as a target until 2050. By 2050, the installed capacity
of electricity generation is expected to reach 444 GW, and renewable energy is expected to contribute around 169 GW. The
government of Indonesia has also committed in the Paris Agreement and set the Intended National Determined Contribution
(INDC) to reduce greenhouse gas emission by 29% (with the country’s own effort) or even 41% (with international support) by
2030. Regarding the medium-term plan to achieve the INDC target and the National Energy Plan target, geothermal development in
Indonesia has been planned to reach 9300 MW installed capacity by 2030.
The government has laid out several geothermal development schemes, such as direct assignment to state-owned enterprises,
optimisation of geothermal potency in Eastern Indonesia, preliminary surveys and exploration assignments, and exploration funding
mechanism. This study will elaborate on geothermal business opportunities in Indonesia and how the government’s programs work
in order to achieve the National Energy Plan Target as well as the INDC target.
1. INTRODUCTION
Indonesia is an archipelago country which has more than 17,500 islands with over 81,000 kilometres of coastline. This
geographical condition makes Indonesia very vulnerable to global warming and climate changes. Meanwhile, the population is now
over than 266 million people (Statistics Indonesia, 2019). With this figure, Indonesia’s energy needs reached about 1.2 billion BOE
in 2017 (MEMR, 2018), and the demand has continued to rise along with the increased number of population and the economic
growth. Hence, the government has to take several actions to diversify the national energy mix to increase renewable energy
development and reduce greenhouse gas emission.
To that end, the government has issued a number of regulatory frameworks in the energy sector. In 2014, the government brought
in Government Regulation No.79/2014 about National Energy Policy. The regulation stipulates that renewable energy should
contribute at least 23% of the primary energy mix in 2025 and 31% in 2050. The detailed strategies and target of the National
Energy Policy are specified in Presidential Decree No.22/2017 concerning General National Energy Plan, in which geothermal
development is targeted at 7241,5 MW by 2025 and 9300 MW by 2030.
Furthermore, Indonesia took part in the COP-21, an event in which nations gathered to discuss climate change risks and relevant
mitigation actions to keep the increase in global average temperature at well below 2oC, above the pre-industrial levels, and pursue
efforts to limit the temperature increase to 1.5oC above pre-industrial levels. The Government of Indonesia has agreed and
committed to reducing greenhouse gas emission by 29% (with the country’s own effort) or even 41% (with international support)
by 2030. This commitment was ratified into Law No. 16/2016 about Ratification of Paris Agreement to the United Nation
Framework Convention on Climate Change. In order to achieve the targets, a geothermal development road map was developed by
the government to accomplish 10.002 MW of geothermal installed capacity by 2030.
2. SITUATION
Indonesia is blessed with various energy resources, including fossils and renewables. However, its geographical conditions are very
challenging to develop an integrated electricity system. Therefore, energy development should be planned carefully and prioritise
the development of local energy sources in order to produce an affordable and sustainable energy supply.
2.1. Electricity and Energy Mix Conditions
In the last decade, the government has encouraged the development of energy supply in an equitable manner. Energy should be
available and easily accessible for all people in order to stimulate local economic growth and reach the national welfare. Therefore,
Indonesia has improved the electricity system significantly in the past decade. According to Electricity Supply Business Plan
(Rencana Umum Penyediaan Tenaga Listrik/RUPTL) 2019-2028 from state-owned electricity company (Perusahaan Listrik
Negara/PLN), the total installed capacity has increased from 39,7 GW in 2011 to 56.6 GW in the year 2018. Most of the
generations are still supported by fossil fuel. In 2018, the primary energy mix for power plants consisted of 48.8% coal, 26.76%
gas, 11.75% oil, and 12.62% renewable energy. Meanwhile, geothermal energy was still trailing behind with around 3.44%
contribution.
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Figure 1: Installed Capacity from Various Energy Sources (left) and Primary Energy Mix for Electricity Generation (right)
(modified from PLN, 2019)
The development of the electricity system has increased electricity access for the public. The MEMR (2019a) reported that the
electrification ratio has increased from 67.2% in 2010 to 98.3% in 2018. However, according to Statistics Indonesia (2019), the
Indonesian population has been growing by about 1.36% per year, and the national economic level has been rising by about 6.45%.
The growth of population and the national economy should be balanced with the development of electricity infrastructure.
Therefore, by also taking into account the energy conservation program, PLN projected that the electricity generation capacity
should increase by 6.42% per year in the next decade (PLN, 2019).
Figure 1: Electrification Ratio across Indonesia (MEMR, 2019a)
2.2. Indonesian Geothermal Resources
Indonesia is located along the Ring of Fire and has abundant geothermal resources. The MEMR, through its Geological Agency,
conducted an early investigation, estimated, and registered geothermal resources from each geothermal area. In order to estimate
and register the resources carefully, the government has developed the national standards for determination and classification of
geothermal resources (SNI 6009-2017). The summary of classification standards and guideline can be seen in Table 1.
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Table 1: Classification of Geothermal Resources According to SNI 6009-2017
Geothermal Resources
Speculative Hypothetic Reserves
Possible Probable Proven
Estimated by
conducting geological
& geochemical surveys
Estimated by conducting
geological, geophysical
& geochemical (3G)
surveys
Estimated by
conducting 3G
surveys and
thermal gradient
drilling
Estimated by
conducting 3G surveys,
thermal gradient, and
minimum of 1 drilling
exploration
Estimated by conducting
3G surveys, thermal
gradient, and minimum
of 3 drilling explorations
Benchmarking on those standards, the Geological Agency has managed to register 349 prospective geothermal areas with a total
potential of 25,3 GW. This potential can help Indonesia develop sustainable energy supply to fulfil the national energy demand and
support the national economy.
Table 2: Indonesia’s Geothermal Resources for Each Major Island (Geological Agency, 2018)
No Major Island Prospect
Areas
Resources (MW) Total
Resources
(MW)
Installed
Capacity
(MW) Speculative Hypothetic
Reserves
Possible Probable Proven
1 Sumatera 103 2.776 1.689 3.889 1.083 1.028 10.465 562
2 Java 73 1.190 1.460 3.708 516 1.820 8.694 1.254
3 Bali 6 70 22 122 110 30 354 0
4 Nusa Tenggara 28 225 210 829 121 12.5 1.397,5 12,5
5 Borneo 14 151 18 12 0 0 181 0
6 Sulawesi 89 1.360 362 1.041 180 120 3.063 120
7 Moluccas 33 560 91 497 6 2 1.156 0
8 Papua 3 75 0 0 0 0 75 0
Total 349 6.407 3.852 10.099 2.016 3.012,5 25.386,5 1.948,5
10.259 15.127,5
25.386,5
2.3. Business Process
Geothermal development phase and business process in Indonesia are regulated by Law No. 21 of 2014 and the Government’s
Regulation No.7 of 2017. The first stage of geothermal development is typically the preliminary surveys. A preliminary survey is
an initial investigation into a geothermal prospect area which usually involves 3G surveys and a thermal gradient survey. The
preliminary surveys used to be carried out by the Geological Agency, research institutes, or business entities. However, lately, the
government has encouraged business entities to conduct preliminary surveys up to exploration stages in order to accelerate the
geothermal development process, as stipulated in the MEMR Regulation No. 36 of 2017.
The exploration phase normally encompasses detailed 3G surveys, remote sensing, exploration drilling, and well-testing. This
phase aims to gather all data needed to conduct a feasibility study on the project. Exploration drilling is an essential activity to
prove whether geothermal resources are feasible to develop. However, it needs a lot of investment and has a relatively low success
rate. Therefore, the government has initiated a government-led drilling program in order to reduce the initial development risk and
help geothermal development projects to be more feasible. The program is funded by the national budget, Green Environment
Facility (GEF), and Clean Technology Fund (CTF) from the World Bank.
More specifically, the feasibility study is a comprehensive study of the geothermal project to determine whether it is feasible or not
to be developed. The project will be reviewed based on the technical, economic, environment, as well as social aspects. If the study
proves that the project is feasible, the development phase will be continued to the exploitation phase.
In the exploitation phase, the project developer will carry out a full development of a geothermal field, which includes further
development drilling, the establishment of a steam above-ground pipeline system, and the construction of a power plant. Finally,
the project reaches the utilisation phase after commissioning the power plant and synchronising the electricity production to PLN’s
transmission. According to the Government’s Regulation No.7 of 2017, the geothermal plant may operate for 30 years since the
feasibility study is approved. The geothermal operation and license may be extended for 20 years. The summary of the
development phases can be seen in the figure below:
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Figure 2: Geothermal Business Scheme in Indonesia (MEMR, 2019b)
After going through a preliminary survey to obtain sufficient data, a geothermal prospect area will be evaluated by the government
and designated as a geothermal working area. The government will offer the working area through a tender mechanism to the
public or by direct assignment to stated-owned enterprises or public service agencies. Currently, there are 64 geothermal working
areas (see Appendix 1), 11 of which have commercially operated and 30 of which are under-development (in an exploration or
exploitation phase). The other 23 working areas will be offered to the public in the near future to speed up geothermal development
in Indonesia. As for the other prospect areas, the government is offering them through the Preliminary Survey and Exploration
Assignment (Penugasan Survei Pendahluan dan Eksplorasi/PSPE) scheme to encourage geothermal investment. In the PSPE
scheme, a developer may conduct a preliminary survey and exploration in other geothermal areas apart from the working areas.
Briefly, the details of each geothermal business scheme are explained below:
2.3.1 Tender
Most of the working areas are offered to the public through a tender mechanism. This scheme is intended to select qualified
geothermal developers by means of open competition. The tender may be participated by both the private sector and state-owned
enterprises. The participants will be evaluated based on their financial aspects, technical aspects, experiences, exploration
commitment, and development plan proposal.
The tender is divided into two phases. First, the participants will be evaluated by their financial aspects, technical aspects,
experiences, and other administrative requirements. Participants who are qualified in the first phase may proceed to the second
phase. In the second phase, the participants will be asked to submit their development plan proposal and exploration commitment.
As for the exploration commitment, they will be asked to state their commitment to conduct several exploration drillings and
deposit some fund in the form of an escrow account to the government.
The winner will be granted a geothermal consent. Then, they will be obligated to deposit some amount of exploration commitment.
The minimum amount of deposit is 10 million USD for above 10 MW development or 5 million USD for below 10 MW
development. Later, the deposit may be disbursed gradually along with the progress of exploration activities.
2.3.2 Direct Assignment to State-Owned Enterprises (SOEs) and Public Service Agencies (PSAs)
SOEs and PSAs are believed to be able to get funding relatively easier to support geothermal development. Therefore, the
government may assign SOEs and PSAs to develop a geothermal working area. However, there are some criteria which need to be
satisfied before a working area can be assigned to SOEs or PSAs, including that the working area has been explored by SOEs or the
government or the working area has been given up by another developer. Currently, there are 12 working areas which have been
assigned to SOEs since 2015.
2.3.3 Preliminary Survey and Exploration Assignment (Penugasan Survei Pendahluan dan Eksplorasi/PSPE)
Indonesia has enormous geothermal energy resources and 349 geothermal prospect areas. In order to encourage exploration
activities in the prospect areas, the government may assign SOEs, PSAs, and/or private sectors to conduct preliminary surveys,
exploration, and reserves estimation. Geothermal developers can propose any prospect areas which have not been developed by any
other parties to be assigned to them. After the government receives the proposal for those areas, the government will announce the
PSPE offering to the public. Any PSPE candidates should submit their exploration proposal and exploration commitment. If there
are two or more candidates, a contest mechanism should be conducted to select the best candidate. The winner will be assigned to
conduct exploration within 3-5 years. The exploration activities should include detailed 3G surveys, exploration drilling, and
resource estimation. The PSPE executor will have several privileges to conduct the exploration, such as an exemption from
exploration levies, entitled fiscal incentives, being granted a geothermal consent through a limited tender mechanism, and having
longer operation period as the exploration and feasibility study phase is accelerated.
3. BENEFITS OF GEOTHERMAL DEVELOPMENT
Geothermal energy is known as clean and sustainable energy. Yuniarto (2015) reported that the average greenhouse gas emission
from geothermal plants in Indonesia is only about 62.9 gCO2e/kWh. Compared to fossil power plants, geothermal emission is 15
times smaller than thermal plants and 12 times smaller than diesel plants (Bertani & Thain, 2002). The geothermal plant is also
sustainable and can be operated for a very long period. For example, the first geothermal plant in Indonesia, Kamojang-1, has been
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operated for more than 36 years and is still in operation. Moreover, one of the exploration wells, KMJ-3, has been drilled since
1926 and is still able to produce steam at 98-100oC until now (Bayutika, 2018). In order to maintain the sustainability of
production, after being used for electricity generation, the geothermal fluid will be re-injected to the reservoir. Therefore, the steam
production can be relatively stable and sustainable if the reservoir and resources are well-managed.
Utilising natural hot fluid beneath the Earth’s surface, geothermal plants do not rely on fossil fuel. Therefore, the cost of generation
will be relatively stable and not affected by global energy prices and inflation. WestJEC (2016) simulated and compared
geothermal cost structure with thermal plants, gas-combined plants, and diesel plants. The finding showed that 76% generation cost
in a geothermal project came from capital cost, while the figure for a diesel plant is only at 15%, a gas combine-cycle plant at 19%,
and a thermal plant at 35%. On the contrary, fuel cost constitutes 80% of the diesel plant generation cost, 73% of the gas-combine
cycle, and 51% of the thermal plant generation cost. From this simulation, it can be concluded that changes in fuel prices will
greatly impact the electricity generation cost of diesel, gas combine-cycle, and thermal plants.
Figure 3: Comparison of Electricity Generation Cost (WestJEC, 2016)
WestJEC (2016) also reported that 57% of geothermal capital costs could be procured from the domestic market. Moreover, it is
estimated that the geothermal development in Indonesia requires an investment of 4.52 million USD per MW installed capacity.
Therefore, the development of geothermal based on the Road Map would bring a total investment of 36.4 billion USD, 20.7 billion
USD of which would flow into the domestic market. As a result, geothermal development can encourage the growth of local
industries and the domestic economy.
Furthermore, geothermal development will open access to geothermal manifestation features in the surrounding areas. Tourism
activities related to the features as well as environmental conservation activities, could also be developed along with geothermal
development activities.
Figure 4: Comparison of Domestic Procurement Portion between Geothermal and Coal-fired Plants (WestJEC, 2016)
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Geothermal energy development also has advantages compared to other renewable energy sources. Geothermal energy is not
intermittent like solar PV and wind turbines and also not affected by seasonal changes like hydro plants. Hence, geothermal energy
can supply the electricity system and does not need any back-up from another source of energy. This characteristic also suits
geothermal energy to fulfil the base-load demand in the electricity market. Base-load demand usually comes from industries which
operate for 24 hours a day.
Apart from the benefits, geothermal development contains high risks in early development. The exploration and exploitation phases
take a long time and need lots of investment. Also, it is difficult to establish wells or power plant if the prospect area is located in a
high-terrain or forestry area. Hence, the government’s support and careful planning are crucial in order to foster geothermal energy
development in Indonesia.
4. GEOTHERMAL ROAD MAP
In order to achieve the target and ensure all investment in the geothermal sector, a geothermal road map has been set out by the
government. The road map was formulated considering geothermal resources, development plan from developers, RUPTL PLN
2019-2028, and recent studies about geothermal development in Indonesia (World Bank, JICA, IRENA, and ARUP). The road map
has identified 220 geothermal projects from 100 areas with the total development of 8053.5 MW in 2030 (see Appendix 2). In
general, the projects are divided into several categories:
Table 3: Summary of Indonesia Geothermal Development Road Map 2019-2030
Categories Total Projects/Units Total Development
(MW)
A Considered in RUPTL PLN 2019-2030 113 4,562.5
1 Project has acquired PPA 61 2,547.5
2 The project has been under development and
has been negotiating PPA with PLN 35 1,330
3 The project has not been developed yet 17 685
B Not yet included in RUPTL PLN 2019-2030 107 3,491
1 The project has been under development and
negotiation PPA with PLN 60 2,425
2 The project has not been developed yet 47 1,066
Total Development 220 8,053.5
Existing Geothermal Plants 40 1,948.5
Target Installed Capacity by 2030 260 10,002
Another study from JICA and WestJEC (2016) reviewed Indonesia’s geothermal development target based on the resources, as well
as the business, environmental, and social aspects. The study reported that currently, there are 7,847 MW developable resources,
and there may be some possibilities of other feasible resources if more preliminary surveys and exploration activities are conducted.
5. ISSUES AND CHALLENGES
A geothermal development project ideally takes 7-8 years to be developed from its preliminary survey until the Commercial
Operation Date (COD). However, geothermal development in Indonesia takes more time due to several issues and challenges:
Some prospect areas are located in conservation forest areas.
The characteristic of geothermal resource areas in Indonesia is mostly island-arc volcanic setting type in high-terrain areas,
which makes it likely located in forestry areas. According to Law No.21 of 2014, geothermal development is not considered
as a mining activity anymore and may be conducted in conservation forest areas but specifically in the utilisation zone. Other
prospects which are located in the main zone and jungle zone remain restricted for any development activities. The MEMR
and the Ministry of Environment and Forestry (MEF) have agreed to cooperate in the establishment of the utilisation zone in
order to encourage geothermal development and tourism activities around the national parks and conservation forest areas.
High-risk level in early development phase.
Geothermal energy development is considered as a special case among renewable energy development due to its significant
up-front capital requirement and high-risk level in its early development phase. The majority up-front cost is needed for
establishing initial infrastructure and conducting exploration drilling, while the uncertainty of geothermal resources causes
the high initial development risk. Although comprehensive geological surveys may have been conducted, the geothermal
resources must be proved by conducting exploration drilling. There is a high probability that an exploration drilling would
end up being unsuccessful and the resources would therefore, not be proved. These development risks will significantly
reduce if the resources have been proved in exploration drillings.
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The high-risk level of development also causes difficulties to acquire funding. Normally, lenders would be willing to fund a
geothermal project if the steam resources are already proved at a minimum percentage of 40-50% of the total development
plan. Prior to that, the developer needs to spend their own money to conduct the necessary 3G surveys and exploration
drillings. This combination of the high-risk level of development, large up-front capital requirement, and funding difficulties
will slow down the pace of geothermal development and may sometimes prevent projects from proceeding (Robertson-Tait et
al., 2015).
Figure 5: A Conceptual Model of Risk Level during Geothermal Development Process (adapted from ESMAP Geothermal
Handbook, World Bank, 2012 and Robertson-Tait et al., 2015)
Economic feasibility of projects
In order to maintain the economic growth and social welfare, the electricity state-owned enterprise, PLN, is obliged to sell
electricity at certain prices stipulated by the MEMR. This condition forces PLN to manage their businesses effectively and
efficiently, including in the electricity generation from renewable energy. Lately, the various renewable Levelized Costs of
Electricity (LCOE) is declined and reached a competitive tipping point (IRENA, 2017). Geothermal projects are also forced
to be more competitive with other energy sources. However, due to the high-risk level of development and large up-front
capital requirement, a geothermal developer would expect a good return from their project. The geothermal project may be
more competitive if the development risk is reduced by the government.
Power Purchase Agreement with PLN
The achievement of the Power Purchase Agreement (PPA) with PLN will give significant impacts on geothermal projects.
Geothermal developers will feel more secure about their investment and have more confidence to conduct advanced
development if they already have the PPA. Unfortunately, PPA’s negotiation with PLN often takes a long time. The difficulty
in achieving tariff agreement and the long bureaucracy process usually hamper the acquirement of PPA and geothermal
development in a wider context.
Energy demand
The development of power plants should be balanced with the growth of electricity demand. In the last decade, Indonesia has
developed the electricity system significantly and improved the electrification ratio from 67.2% in 2010 to 98.81% in June
2019. The development of new geothermal power plants may not replace fossil plants immediately because the contracts for
fossil plants will exist until the PPAs expire. Therefore, the demand for electricity should be stimulated and maintained to
cope with the rising amount of supply.
Social issues
Social issues in geothermal development are usually related to environmental issues, land acquisition, and cultural beliefs
rooted among the local communities around a geothermal prospect area. The resistance from the residents may hinder the
project advancement and result in the late issuance of permits by the local government.
6. GOVERNMENT’S PROGRAMMES
The government has launched several programmes in order to encourage geothermal development in Indonesia:
1. Establishing a working group between the MEMR, MEF, and local government to set geothermal working areas.
Conservation forests in Indonesia are managed by regional Conservation Centres. In order to avoid overlapping areas
between geothermal working areas and restricted areas in conservation forests, the MEMR set up a working group, which
includes the MEF, regional Conservation Centres, and local government, to set the working area. If the main prospect is
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located in a restricted area, the working group will work on the issue as early as possible to seek the best way to foster
geothermal development as well as maintaining conservation forest protection.
2. Providing Geothermal Fund Facility
The government through PT Sarana Multi Infrastruktur (PT SMI) offers a funding scheme for geothermal developers in
Indonesia and conducts government-led drilling programs for greenfield projects which have higher risk profiles. This facility
is provided to reduce the development risk in geothermal projects and help geothermal developers get funding for their
projects. The funding comes from the state budget, the Clean Technology Fund (CTF), and Green Environment Facility
(GEF).
3. Encouraging geothermal development in Eastern Indonesia
The eastern region of Indonesia encompasses numerous islands and small electricity grids. The grids are mostly supplied by
diesel power plants, which are relatively expensive. Therefore, the LCOE for Eastern Indonesia regions remains high.
Geothermal development, which is more sustainable and cheaper, in these regions will increase the reliability of these grids.
The more reliable electricity supply will stimulate the development of local industries as well as the local economy.
The government also launched the Flores Geothermal Island program. Flores is a major island in East Nusa Tenggara
province which has many tourist activities and geothermal prospect areas. There are 18 identified prospect areas with total
resources of 735.5 MW. The program pursues grid base-load fulfilment from geothermal energy. Other than generating
electricity, the program also aims at the utilisation of geothermal energy for agricultural business and attractive tourism
activities. The government of Indonesia has been assisted by the government of New Zealand, Britain, and Japan, the World
Bank, and the World-Wide Fund for Nature (WWF) in designing and developing this program.
4. Developing industrial areas based on renewable energy resources
Most renewable energy cannot be transported to other areas. Therefore, the utilisation must be around the location of the
resource. Given this characteristic, renewable development will establish energy security mainly around its utilisation area.
However, electricity generation also needs to be consumed effectively. A geothermal plant acts as a base-load supplier.
Hence, geothermal energy is very suitable for an industrial area which needs electricity for 24 hours non-stop. In response to
this, the government has set industrial areas based on renewable resources in the National Middle-Term Development Plan
(RPJMN).
5. Increasing domestic component utilisation level
To develop the industrial sector, the government also endorses the utilisation of domestic products in all infrastructure
projects, including geothermal projects. The government targets the development cost of geothermal projects to be reduced,
and this can be achieved if most of the project components are supplied by players in the domestic market.
6. Implementing a power-wheeling scheme
The government allows any renewable developer to conduct a collective utilisation of PLN’s transmission and distribution
network and sell directly to consumers, as stipulated in Law No. 30 of 2009 and the MEMR Regulation No. 1 of 2015.
Recently, several global corporate communities, such as RE100 and Renewable Energy Buyers Alliance (REBA), urged the
government and PLN to supply them with more electricity from renewables. With power-wheeling implementation,
renewable energy developers can make transactions directly with end-consumers like them and conduct a collective
utilisation of PLN’s existing transmission network.
7. Building geothermal capacity
To keep up with the increase in geothermal development, the demand for expertise and human resources in geothermal will
also increase. Therefore, the government disseminates knowledge about geothermal utilisation and technologies to
universities and schools. The local communities also need to understand about geothermal utilization and its benefits so that
they can accept geothermal development in their neighbourhood. Furthermore, the government allows universities and
research agencies to conduct research in the geothermal sector. The conditions and procedures are stipulated in the MEMR
Regulation No. 33 of 2018.
8. Optimising existing geothermal projects
As mentioned before, geothermal development poses high-level risks and requires the establishment of infrastructure.
Therefore, the extended development of an existing field will be more economical. However, extended development should
be done carefully in order to maintain the sustainability of steam production.
9. Synergising State-Owned Enterprises (SOEs)
The government encourages all geothermal SOEs to tighten synergies with PLN as the off-taker so that they can stay
competitive compared to other generation plants and achieve PPA easier with PLN.
10. Synergising governmental bodies
Since a geothermal project requires various permits and licenses from the government, inconsistent policies between
governmental institutions and long bureaucratic processes may hamper geothermal development. Therefore, the government
has reduced the number of permits and established several schemes for collaboration among governmental bodies. The
intended collaborations are to work on several major issues concerning geothermal development, such as the mechanism of
establishing project monitoring, government-led drilling programs, the Flores Geothermal Island program, social resistance
issues, development of the provision of investment funds, and other governmental programs on geothermal development.
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7. CONCLUSION
Developing geothermal energy is vital to help satisfy the national energy demand and achieve sustainable development. One
important point to note is that each country has its own natural and socio-economic characteristics which can either boost or hinder
the development. Therefore, it is imperative for a country to map all issues and take into account relevant stakeholders in a
comprehensive manner.
Given its commitment to reducing greenhouse gas emissions in line with the Paris Agreement, Indonesia aspires to foster
geothermal energy. One of the efforts to do so is by directing the course of the present and future actions based on real situations,
and this is specified in the Indonesia Geothermal Road Map 2019-2030. Concerns facing stakeholders in geothermal field include:
1) the locations of some prospect areas in conservation forests; 2) the high-risk level in the early development phase; 3) the
economic feasibility of geothermal projects; 4) the problematic and long negotiation process to achieve Power Purchase Agreement
with PLN; 5) the importance of balancing electricity supply and demand; and, 6) arising social issues, particularly resistance from
the local communities.
To resolve the above challenges, the government has come up with a number of programs, namely: 1) establishing a working group
between the MEMR, MEF, and local government to determine geothermal working areas; 2) providing Geothermal Fund Facility;
3) encouraging geothermal development in Eastern Indonesia; 4) developing industrial areas based on renewable energy resources;
5) increasing the supply of project components from the domestic market; 6) implementing a power-wheeling scheme; 7) building
geothermal capacity; 8) optimizing existing geothermal projects; 9) synergizing State-Owned Enterprises (SOEs); and 10) bridging
between governmental bodies.
Therefore, as follow-up actions of the road map, a wide-ranging surveillance system is recommended to ensure all projects are
developed according to the plan. The surveillance system should work not only under the MEMR’s authority but also the MEF, the
Ministry of Finance, the Ministry of National Development Planning, the Ministry of State-Owned Enterprises, local governments,
conservation centres, PLN, and other relevant stakeholders.
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Statistics Indonesia: Proyeksi Penduduk 2015-2045 (Perempuan+Laki-Laki), (2019).
West Japan Engineering Consultants: An Analysis of Geothermal Power Generation Cost - Generation Cost Structure and Its
Characteristics. The Project to Develop Medium- and Long-Term Geothermal Development Policy in Indonesia, (2016).
World Bank: Geothermal Handbook: Planning and Financing Power Generation. Energy Sector Management Assistance Program
(ESMAP) Technical Report 002/012. (2012)
Zikra, M., Suntoyo, and Lukijanto: Climate Change Impact on Indonesian Coastal Areas. Procedia Earth and Planetary Science,
14, (2015), 57-63.
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APPENDIX 1
Figure 6: Geothermal Working Areas and PSPE Areas in Indonesia (MEMR, 2019b).
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APPENDIX 2:
List of Geothermal Areas - Geothermal Road Map 2019-2030
No Areas
Installed
Capacity
(MW)
Resources (MW) Total
Resources
(MW)
Plan of
Development
(MW) Speculative Hypothetic
Possible
Reserve
Probable
Reserve
Proven
Reserve
List of Geothermal Working Area
1 Arjuno Welirang - 22 - 280 - - 302 180
2 Atadei - - - 40 - - 40 10
3 Baturaden - - 83 45 130 - 258 220
4 Blawan Ijen - - - 95 114 - 209 110
5 Bora Pulu - - - 123 - - 123 40
6 Candi Umbul
Telomoyo - - - 92 - - 92 90
7 Cibeureum
Parabakti 377 - - 189 20 497 706 70
8 Cibuni - - - 140 - - 140 30
9 Cisolok Cisukarame - - - 45 - - 45 50
10 Danau Ranau - - - 210 - - 210 40
11 Dieng 60 - - 112 - 240 352 265
12 Gn. Ciremai - - - 60 - - 60 110
13 Gn. Endut - 100 - 80 - - 180 40
14 Gn. Galunggung - 25 - 264 - - 289 110
15 Gn. Gede Pangrango
- 75 - 85 - - 160 55
16 Gn. Lawu - - 137 195 - - 332 110
17 Gn. Pandan - - - 60 - - 60 60
18 Gn. Rajabasa - - - 58 225 - 283 220
19 Gn. Sirung - - - 152 - - 152 20
20 Gn. Talang-B. Kili - - 24 66 - - 90 20
21 Gn. Tangkuban
Perahu - - 285 90 - - 375 60
22 Gn. Ungaran - - 50 100 - - 150 55
23 Gn. Way Panas 220 - - 133 - 220 353 110
24 Gn. Wilis - - - 50 - - 50 20
25 Guci - - - 100 - - 100 110
26 Hululais - - - 119 389 110 618 295
27 Iyang Argopuro - - 110 185 - - 295 55
28 Jaboi - 50 - 32 25 - 107 121
29 Jailolo - - - 75 - - 75 30
30 Kaldera Danau
Banten - - 100 285 - - 385 110
31 Kamojang-Darajat 505 - - 137 28 526 691 75
32 Karaha Bodas 30 100 - - 144 30 274 0
33 Kepahiang - 74 - 180 - - 254 220
34 Kotamobagu - - - 410 - - 410 80
35 Laenia - - - 66 - - 66 20
36 Lahendong 120 - - - 80 80 160 105
37 Liki Pinangawan
Muaralaboh - 35 86 54 50 85 310 275
38 Lumut Balai - 225 6 111 102 110 554 285
39 Marana - - - 70 - - 70 20
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No Areas
Installed
Capacity
(MW)
Resources (MW) Total
Resources
(MW)
Plan of
Development
(MW) Speculative Hypothetic
Possible
Reserve
Probable
Reserve
Proven
Reserve
40 Mataloko 2.5 - - 16 34 2.5 52.5 40
41 Oka Ile Ange - - - 50 - - 50 10
42 Pangalengan 282 - 84 140 - 240 464 170
43 Rantau Dedap - - 160 40 119 92 411 220
44 Sembalun - - - 100 - - 100 20
45 Seulawah Agam - - 63 - - - 63 185
46 Sibayak 12 - - 282 - - 282 40
47 Sibual Buali 330 - 388 307 - 381 1076 590
48 Sipoholon Ria-Ria - 25 - 35 - - 60 20
49 Sokoria - - 11 51 39 - 101 75
50 Songa Wayaua - - - 42 - - 42 10
51 Songgoriti - 23 - 35 - - 58 35
52 Sorik Marapi - - - 212 89 - 301 290
53 Sumani - 48 - 52 - - 100 20
54 Sungai Penuh - - - 119 76 - 195 145
55 Suwawa - 50 - 20 - - 70 20
56 Tabanan - 50 - 86 110 30 276 65
57 Tampomas - - - 100 - - 100 45
58 Telaga Ngebel - - - 120 - - 120 165
59 Telaga Ranu - - - 72 - - 72 10
60 Tulehu - - - 23 6 2 31 7
61 Ulumbu 10 - - 28 48 10 86 40
62 Waesano - - 106 45 - - 151 20
63 Wapsalit - 45 - 25 - - 70 6
64 Way Ratai - 225 - 105 - - 330 55
Total 1,948.5 972 1,299 6,275 1,828 2,034.5 13,801.5 6,199
No Areas
Installed
Capacity
(MW)
Resources (MW) Total
Resources
(MW)
Plan of
Development
(MW) Speculative Hypothetic Possible
Reserve
Probable
Reserve
Proven
Reserve
List of Preliminary Survey and Exploration Assignment (PSPE) Area
1 Bonjol - - 140 48 - - 188 40
2 Cubadak - - - 66 - - 66 20
3 Gn. Geureudong - 200 - 160 - - 360 170
4 Gn. Hamiding - - - 175 - - 175 200
5 Graho Nyabu - 225 - 200 - - 425 220
6 Hu'u Daha - - - 69 - - 69 20
7 Klabat Wineru - 20 - - - - 20 40
8 Pentadio - 25 - - - - 25 10
9 Sekincau - 25 - 378 - - 403 220
10 Simbolon Samosir - - - 150 - - 150 110
11 Tanjung Sakti - - - 80 - - 80 20
12 Gn. Tandikat &
Singgalang - - 213 65 - - 278 40
13 Lawang-Malintang - - - - - - n/a 20
Total - 495 353 1,391 - - 2,239 1,130
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No Areas
Installed
Capacity
(MW)
Resources (MW) Total
Resources
(MW)
Plan of
Development
(MW) Speculative Hypothetic
Possible
Reserve
Probable
Reserve
Proven
Reserve
List of Prospect Area
1 Akesahu - - - 15 - - 15 10
2 Banda Baru - - 33 21 - - 54 10
3 Bituang - - 29 25 - - 54 20
4 Bromo-Tengger - - 180 58 - - 238 20
5 Gn. Kembar - - 92 - - - 92 165
6 Gn.Batur - - 22 36 - - 58 40
7 Kadidia - - - 66 - - 66 55
8 Krucil Tiris - - - 74 - - 74 30
9 Lesugolo - - - 45 - - 45 10
10 Lilli-Seporaki - 133 - 30 - - 163 10
11 Lokop - 5 16 20 - - 41 20
12 Mapos - - 50 - - - 50 20
13 Massepe - - - 15 - - 15 55
14 Nage - - 2 28 - - 30 40
15 Panti - 120 - 30 - - 150 55
16 Papandayan - - 195 30 - - 225 40
17 Pincara - - - 26 - - 26 10
18 Puhuwato - 40 - - - - 40 10
19 Simisioh - - 40 57 - - 97 55
20 Sungai Tenang - - 74 - - - 74 10
21 Talamau - - - 57 - - 57 20
22 Tehoru - - - 35 - - 35 10
23 Way Pesi - - - 54 - - 54 10
Total 298 733 722 - - 1,753 725 298