Geothermal Energy Development in Indonesia: Progress, Challenges and Prospect

Abstract

One of environmental friendly renewable energies with huge potential in Indonesia is geothermal. Indonesia has the largest geothermal potential in the world, reaching up to 40% of world reserves or about 27,000 MW to 29,000 MW. However the development of geothermal currently is only about 4.2% (1,226 MW) of the existing reserves. The government of Indonesia has issued both fiscal and non-fiscal incentives to encourage geothermal development including establishing Fast Track Program II in 2010 to procure 17,918 MW of which 28% of them are geothermal. But apparently the amount of electricity that can be supplied from geothermal is only about 2.7% of total installed generations in Indonesia. This paper presents the progress of geothermal development in Indonesia and the role of the government including the policy, regulatory framework, and government incentives. It also identifies the challenges of the geothermal development, as well as its prospects in the future. Methodology used in this research is qualitative-descriptive method focused on literature review to obtain literature or secondary data.