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Risks in pushing clean energy transition in Indonesia: Geothermal Case

Hello, this is Cynthia from Think-team.

I had my first-year review of my PhD last week. It was nerve-wracking for me as I haven’t had such an experience.

I introduced my research framework and briefly updated my progress during the past year. I think the presentation went quite smoothly.

Afterward, I was asked an unexpected question by one of the evaluators:

Is there a climate or disaster risk in renewable deployment in Indonesia?

This question brought my thought back to my experience when I worked frequently in geothermal power plants.

Spatially, Indonesia is located in the ‘ring of fire’, indicating as the zone of seismic and volcanic activity that coincides in general with the margins of the Pacific Plate. Geothermal resources are usually found within this zone. Obviously, the locations of geothermal are vulnerable to disaster risks like an earthquake. I recalled my experiences with some earthquakes when I visited a geothermal plant. Indeed, the ring of fire is said to be the most active for seismic activity.

Ring of fire (Pambudi, 2018)

Locating in such earthquake-vulnerable areas puts geothermal to have high risk during its resource exploration. During the construction site, geothermal development has a medium to high-risk profile with some disasters like land-slide in addition to the earthquake (Kumalasari, 2019). To address the risk, zoning management is crucial during the exploration and construction stage. Thus, compared to other renewables, geothermal is said to have a higher risk. When you drill to find the steam, it requires high capital, and often the actual energy generation is lower than what is estimated (Maulidia et al, 2019). This initial high capital should be compensated in the electricity tariff. However, the tariff setting is said to be not attractive yet. Consequently, geothermal development is slower than in the US and the Philippines (~5% of total reserves, around 28 GW) (Pambudi, 2018).

Location of geothermal in Indonesia (Pambudi, 2018)

There are new regulations aiming to promote geothermal deployment in Indonesia for the last decade. For instance, Law No. 21 of 2014 excludes geothermal from mining activity; so the exploration stage can be carried out in conservation areas that have hindered the geothermal development if the activity is categorized as mining activity. Furthermore, the government introduced a ministerial regulation that states the exploration risks will be borne by the government in 2021 using the state-owned budget with the hope to attract more investment in this renewable type and provide clean and affordable energy. However, the price for geothermal is still uncertain like other renewables. Nowadays, the government is still formulating a presidential decree to set electricity tariffs from renewables to be bought by PLN. Hopefully, the regulation can bring certainty to renewable development in Indonesia. Despite the risks and challenges, the geothermal resource is still significant. Policy reformation is still crucial to promote this renewable.

Thank you for reading. See you on the next blog!🤗

Further readings:

1) Kumalasari H, Koestoer RH, Hasibuan HS (2019) Disaster Risk Mitigation of Landslide for Sustainability of Geothermal Production in Bandung Regency, West Java Province, Indonesia. IOP Conf Ser Earth Environ Sci 256:012020.

2) Maulidia M, Dargusch P, Ashworth P, Ardiansyah F (2019) Rethinking renewable energy targets and electricity sector reform in Indonesia: A private sector perspective. Renew Sustain Energy Rev 101:231–247.

3) Pambudi NA (2018) Geothermal power generation in Indonesia, a country within the ring of fire: Current status, future development and policy. Renew Sustain Energy Rev 81:2893–2901.

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