Geothermal Exploration Project De-risking: Discussion on Various Schemes

Abstract

Indonesia is one of the countries with the largest geothermal energy potential in the world which is currently trying to achieve the national geothermal target of 5,800 MWe of installed capacity by 2030. To achieve this target, the Government of Indonesia together with geothermal industry players in Indonesia must carry out exploration activities in various prospect areas spread across various islands in Indonesia. A total of more than 70 prospect areas have been identified by the Government of Indonesia to be explored therefore their feasibility can be assessed for further development.

However, various challenges in realizing geothermal exploration projects have long been the subject of discussion. One of the most obvious challenges is the high exploration risk for investors as a combination of two main factors, namely the high costs that must be incurred for exploration drilling at a time when there is still a high level of uncertainty about the existence of economically viable geothermal resources below the surface. Various countries and financial institutions that have interests in the geothermal industry have conducted various studies and implemented several schemes to overcome this geothermal exploration challenge.

This study aims to map the various schemes currently applied by the geothermal industry around the world through a literature study. These schemes are then discussed and compared to capture the challenges and opportunities if implemented in Indonesia. This paper will also discuss two de-risking schemes that are currently available in Indonesia. This paper, eventually, is expected to trigger more discussion among geothermal industry players in Indonesia regarding the most suitable de-risking schemes for Indonesia to achieve the national geothermal target in 2030.