Indonesia plans to use its volcanoes to become a world leader in geothermal energy, while also trimming greenhouse gas emissions.
Indonesia has 17,000 islands stretching from the Indian Ocean to the Pacific Ocean, which contain hundreds of volcanoes.Â The archipelago is estimated to hold about 40 percent of the world’s geothermal energy potential.
However, only a tiny fraction of that potential has been tapped.Â This has led the country to seek help from private investors like the World Bank and partners like Japan and the U.S.
“The government’s aim to add 4,000 megawatts of geothermal capacity from the existing 1,189 megawatts by 2014 is truly challenging,” Indonesian Geothermal Association chief Surya Darma told the AFP.
Indonesia currently relies on dirty coal-fired power plants using locally produced coal.Â However, one of the biggest obstacles is the cost – a geothermal plant costs about twice as much to build as a coal-fired plant.
Once a geothermal plant is built it can convert the endless free supplies of volcanic heat into electricity with much lower overheads than coal.
This benefit is what the government is hoping to sell at the fourth World Geothermal Congress opening Sunday on the Indonesian resort island of Bali.Â The six-day event is expected to attract about 2,000 people from over 80 countries.
“An investment of 12 billion dollars is needed to add 4,000 MW capacity,” energy analyst Herman Darnel Ibrahim said, putting into context the recent announcement of 400 million dollars in financing from lenders including the World Bank and the Asian Development Bank (ADB).
“Field exploration can take from three to five years, suitability studies for funding takes a year, while building the plant itself takes three years,” he added.
Despite Indonesia’s natural advantages of geothermal energy, it still lags behind the U.S. and the Philippines in geothermal energy production.
Geothermal energy production has become a stronger case with the rapid growth of Indonesia’s economy and the corresponding strain on its creaking power infrastructure.
The archipelago of 234 million people is one of the fastest growing economies in the Group of 20, however only 65 percent of Indonesians have access to electricity.
The goal is to be able to reach 90 percent of the population by 2020 by using a two-stage plan to “fast track” the provision of an extra 10,000 MW by 2012, using mostly coal, and another 10,000 MW by 2014 from clean sources like volcanoes.
President Susilo Bambang Yudhoyono pledged to bring down greenhouse gas emissions by 26 percent by 2020.
A lot of the best geothermal sources are in protected forests, so the government plans to allow the drilling of wells inside conservation areas while insisting that the power plants themselves be outside.
Environmentalist welcomed the completion of negotiations between consortiums of U.S., Japanese and Indonesian companies and Perusahaan Listrik Negara, the state electricity company, over a 340 MW project on Sumatra island.
The project will be Indonesia’s second biggest geothermal plant, after the Wayang Windu facility in West Java.
“The Sarulla project is a perfect example of how Indonesia can realize its clean energy and energy security goals by partnering with international firms,” US Ambassador Cameron Hume wrote in a local newspaper.
Tata and Chevron, along with several other firms, have submitted bids to build another geothermal plan in North Sumatra, with potential for 200 MW.