OVERVIEW

With Indonesia racing to meet growing power demands, as well the dire need to reduce the high dependency on fossil fuels, Indonesia has little option than to start developing alternative energy sources. Currently, Indonesia has allocated IDR 210.7 trillion from the State Budget to subsidized fuel,[1] and has an annual electric power shortage of approximately 1,000 MW.[2] These circumstances are more than enough reason to start focusing on accelerating the development of the geothermal energy sector.

Among the several types of new and renewable energy, geothermal is probably the most realistic source of alternative energy for Indonesia, as Indonesia is home to approximately 40% of the world’s potential geothermal energy resources,[3] estimated to hold geothermal energy reserves of 22,140 MW, equal to 219 billion BEO (barrels-of-oil-equivalent).[4]The world’s biggest geothermal plant is also planned in Sarulla, North Sumatara province, estimated to worth USD 1.6 billion.[5]