Jakarta, CNBC Indonesia – The Reforminer Institute released its latest research results, where the geothermal potential in Indonesia reached 23,765.5 Mega Watt (MW) or around 40% of the total geothermal potential in the world. Due to the magnitude of this potential, geothermal energy is considered to be the backbone for realizing energy security and the national economy.
In fact, it can help realize the Net Zero Emission (NZE) target in 2026 or sooner. As is known, during 2017-2023 the installed geothermal capacity only increased by around 789.21 MW. Since operation began in the 1980s until the end of 2023, the total installed capacity of Indonesia's geothermal power plants has reportedly only reached around 2,597.51 MW or only around 10.3% of Indonesia's total resource potential.
Executive Director of the Reforminer Institute, Komaidi Notonegoro, said that if all of Indonesia's geothermal potential could be utilized, there would be a potential reduction in greenhouse gases (GHG) of around 182.32 million tons of CO2e or the equivalent of 58% of the energy sector's GHG reduction target in 2030 which was set at 314 Million Tons of CO2e.
Based on its characteristics, said Komaidi, geothermal energy has an important role in helping to realize national energy security. This is because the existence and use of geothermal energy is generally attached to countries or regions that have geothermal resources.
“Because it relatively cannot be exported, the priority for utilizing geothermal energy is for domestic interests which are relevant to efforts to achieve national energy security,” said Komaidi to CNBC Indonesia, Thursday (13/6/2024).
Komaidi added that geothermal energy has several advantages compared to other types of new and renewable energy (EBT). These advantages include: First, it is not dependent on the weather. Second, greater energy production for the same period. Third, a higher level of capacity. Fourth, priority for domestic interests. Fifth, it is not affected by the increase in fossil energy prices. Sixth, generation operating costs are relatively cheaper.
According to Komaidi, in the EBT group, the geothermal electricity capacity factor (PLTP) was recorded as the best, namely between 90-95%. PLTP is listed as the only EBT generator that can operate as a base load in the electricity system.
“The large capacity factor of PLTP is reflected in the fact that even though the installed capacity of PLN's geothermal power plant (PLTP) in 2023 is only around 0.79% of the total installed capacity, the electricity production of PLTP managed by PLN in the same year reached around 1.33% “to PLN's total electricity production,” explained Komaidi.
Most importantly, geothermal energy sources, said Komaidi, are free from the risk of increasing primary energy prices as occurs with fossil energy in general. Because it is relatively free from the risk of price increases, the use of geothermal energy can help maintain national economic stability and growth.
In fact, the operating costs for geothermal power plants (PLTP) are recorded as one of the cheapest. Where, the average national power plant operating costs in 2022 are reported to be IDR 1,473/kWh.
“Meanwhile, the average operating cost of a geothermal power plant (PLTP) in the same year was IDR 118.74/kWh or around 8.60% of the average national power plant operating cost,” explained Komaidi.
Unfortunately, Komaidi noted, relatively similar to the 2021 – 2030 RUPTL, the geothermal utilization target in the National Energy Policy (KEN) also does not appear to be a top priority. The addition of EBET generating capacity in the KEN document is focused on bioenergy plants, hydroelectric power plants and solar power plants.
Until 2050, the generating capacity of the three is targeted at 26 GW, 38 GW and 45 GW respectively. Meanwhile, in the same period, geothermal power generation capacity is targeted at 17.5 GW.
“Geothermal energy sources have not been made a priority in implementing the energy transition because there are a number of obstacles in its development and exploitation,” explained Komaidi.
Based on Reforminer's review, there are a number of risks that developers must face in geothermal business in Indonesia, including:
Firstrisk of exploration failure. Secondfinancial risks due to timing and market structure in the geothermal industry. Thirdregulatory and governance obstacles (PJBL, TKDN, licensing, asset ownership, mismatch of government incentives with developer needs). Fourththe initial capital requirement is quite large. Fifththe development duration is relatively long. Sixthgeographic location of geothermal resources in remote areas.
“A number of these obstacles are the reason why the selling price of geothermal electricity in Indonesia is still considered relatively expensive,” said Komaidi.
[Gambas:Video CNBC]
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