Geothermal Development in Indonesia:an Overview of Industry Status and Future Growth

Abstract

Indonesia may have the highest geothermal power potential of any nation, with a geothermal resource base of nearly 20,000 MW, as estimated by Pertamina. From 1973 to 1998, 17 geothermal areas were drilled to explore, confirm, and develop geothermal resources in Java, Sumatra, Bali, Flores, and Sulawesi. As of July 1999, five geothermal fields are operating in Indonesia with a combined installed capacity of 527 MW.

Since 1982, geothermal development in Indonesia has been expedited by government regulations that allow the participation of the private sector, both local and international, in partnership with Pertamina. By 1994, Pertamina and two private developers, together with the government utility PLN, completed geothermal projects at Kamojang (140 MW), Salak (110 MW), and Darajat (55 MW). Seven private geothermal companies signed contracts of joint operation with Pertamina for 10 contract areas between 1994 and 1997. As a result of these contracts, an additional 220 MW started commercial operations at Salak in 1997, and three additional power projects comprising 240 MW were constructed at Wayang Windu (110 MW), Darajat (70 MW), and Dieng (60 MW) in Java. Pertamina has been independently developing smaller pilot projects in Sumatra and Sulawesi. The severe economic crisis that started in late 1997 has adversely affected power sector demand and growth in Indonesia. This has resulted in significant delays to several geothermal projects in the advanced exploration and development stages. Changes in the regulatory environment for the geothermal industry and the resolution of the economic crisis are the major issues affecting the future growth of the Indonesian geothermal industry.