Forty per cent of world's reserves are being squandered due to regional bureaucracy, claim energy companies
Currently, Indonesia can only utilise 1,226 megawatts (MW), or 5 per cent of its total geothermal reserves, despite being surrounded by tectonic plates.
With its geographical position, the largest Southeast Asian economy holds 40 per cent of the world’s geothermal reserves with a total potential of 29,000 MW scattered across 276 locations to feed energy to its 230 million citizens.
But land acquisition and permit issues are reportedly stalling the 30 geothermal projects that were launched before and after the introduction of the 2003 Geothermal Law.
“I think this is the point where the government should take an all or nothing approach [to help potential investors]. Otherwise, just shut down all of the geothermal projects in the country,” said Indonesian Geothermal Association chairman Abadi Purnomo recently.
Purnomo, a former president of Pertamina Geothermal Energy, a subsidiary of Indonesia’s state-owned oil firm Pertamina – was referring to most geothermal players in the country, who are still stuck at the exploration stage.
Eleven of 20 geothermal projects launched before the law was enacted are still at the exploration stage, including Pertamina Geothermal Energy, according to Energy and Mineral Resources Ministry data.
Nineteen projects launched after the enactment of the law are also at the same stage. Companies involved in these projects include Supreme Energy – whose partners include Japan-based Sumitomo and France-based GDF Suez – Star Energy and Chevron.
The law, which stipulates that working areas and exploration-exploitation work are to be tendered by regional administrations, has held back companies with land acquisition and permit issues.
In the most recent case, Supreme Energy decided last month to postpone drilling on its 2x110 MW project in Mt Rajabasa in Lampung amid local protests that were, ironically, endorsed by the Forestry Ministry.
Energy and Mineral Resources Ministry geothermal director Tisnaldi highlighted the level of “acceptability” from local communities as one of the main challenges for geothermal firms to operate in Indonesia.
“As for the Supreme Energy case, we [the Energy and Mineral Resources Ministry, the Forestry Ministry, the local administration and the firm] have invited local leaders in Lampung to an existing geothermal project in West Java,” he said over the weekend, referring to Pertamina’s 200 MW-Kamojang power plant in Garut, Java.
He added that Supreme Energy, which plans to invest more than US$800 million (Bt24.7 billion) for both geothermal exploration and the Rajabasa power plant, could resume its exploration “soon” on endorsement from the local leaders.