August 13, 2019 / 9:54 AM / 3 months ago

Indonesia needs $15 billion investment to meet geothermal target by 2025

FILE PHOTO: Workers of PT Pertamina Geothermal Energi (PT PGE) rotate a valve during a production test at Karaha geothermal well in Tasikmalaya, Indonesia West Java province, April 19, 2014. REUTERS/Beawiharta

JAKARTA (Reuters) - Indonesia may require an estimated $15 billion (£12.43 billion) in investment to meet its target of reaching 7.2 gigawatts (GW) of geothermal power capacity by 2025 and is studying ways to reduce project costs, an energy ministry official said on Tuesday.

The capacity would be an increase from less than 2 GW of geothermal power currently, the Ministry of Energy and Mineral Resources’s Director General of Renewable Energy F.X. Sutijastoto told reporters at a conference on geothermal energy.

Earlier at the conference, Indonesian Vice President Jusuf Kalla said during a speech that progress in geothermal power development in the past decade has been “very slow” and the dependency on coal power has caused air pollution around the capital Jakarta.

Coal currently makes up around 60% of the country’s energy mix versus about 5% from geothermal power, according to data from state utility company PT Perusahaan Listrik Negara (PLN).

The energy ministry is drafting up plans to accelerate ongoing projects to meet the target, Sutijastoto said, including reviewing the possibility of the government reimbursing some part of the development costs.

“We will see, things such as infrastructure, may be possible to be reimbursed by the government,” he said, referring to items such as roads or bridges built by the company to reach the geothermal power site.

PT Pertamina Geothermal Energy, a unit of state energy company PT Pertamina, is aiming to invest $2.7 billion in geothermal power through 2026, President Director Ali Mundakir told reporters at the conference.

The company aim to increase its geothermal capacity to 1.1 GW by 2026 from 672 megawatts currently.

Reporting by Wilda Asmarini; Writing by Fransiska Nangoy; Editing by Christian Schmollinger

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