Forty per cent of the world’s geothermal energy resources are located in Indonesia — roughly equivalent to 12 billion barrels of oil

There is something off-kilter about the drive up to Kamojang, the crater of Mt. Guntur in West Java. Just before beginning the ascent I pass a bird market, with brightly coloured songbirds in wooden cages laid out in front of a mosque, standing abruptly before a field of electrical power transmission towers. The entire scene is framed by the mountain itself, a hulking green creature pierced ever so often with shooting columns of steam.

But the strangeness of the moment only accentuates my anticipation of coming face-to-steam with the source that could prove to be Indonesia’s energy salvation: renewable, constant, and plentiful geothermal energy.

With some 130 active volcanoes, Indonesia is a hotbed of tectonic plate activity. Lying at the point where the Eurasian plate constantly bumps up against the Indo-Australian plate, volcanoes in the archipelago have long been associated with outsized eruptions, deaths and misery. The 1883 eruption of Krakatoa, for example, killed more than 36,000 people and is considered to be one of the loudest sounds ever heard in modern history. Only a few days before my trip to Kamojang, another volcano in Sumatra, Mt. Sinabung, had erupted, forcing the evacuation of thousands of villagers.

But all this geological ferment is not an unmitigated negative. The flip side of the destruction is the availability of a vast amount of geothermal energy that if harnessed, can provide Indonesia with the kind of clean and reliable energy source it is in desperate need of.

Forty per cent of the world’s geothermal energy resources are in fact located in the country with the potential to provide 28 gigawatts (GW) of energy, roughly equivalent to 12 billion barrels of oil. And yet, three decades after the country’s first geothermal plant at Kamojang was set up, Indonesia’s total installed geothermal capacity of 1.4GW is only equivalent to four per cent of this potential.

On a global scale this is a poor showing. Over 20 countries use geothermal energy to produce electricity and even a neighbouring nation like the Philippines which only has a 6GW potential, already utilises about 33 per cent of its resources. In Iceland, 25 per cent of the country’s total electricity production is geothermal-based.

Indonesia ignores geothermal resources at its own peril, and with global implications. The country has been growing at around six per cent in recent years, and is a huge consumer of oil. Once a major oil exporter, Indonesia is today a net oil importer, forced to quit its membership of the Organization of the Petroleum Exporting Countries in 2008. It currently imports some 400,000 barrels of oil a day. By some estimates, its crude oil reserves will be completely gone within 12 years. Oil imports have led to a widening trade deficit, which in turn adds to the country’s balance of payments and currency woes.

Panacea for energy woes

Geothermal energy is also clean and renewable. If exploited, it can help Indonesia combat some of the environmental impact of the massive deforestation that has made it the world’s third largest emitter of greenhouse gases.

But Abadi Purnomo, chairman of the Indonesian Geothermal Association and former president director of Pertamina Geothermal Energy, a subsidiary of the country’s state-owned oil and gas major Pertamina, is pessimistic. He says the government’s lack of financial and policy assistance to geothermal energy, has led to a stalling of the majority of geothermal projects. Pertamina currently has 14 projects around the country in various stages of development, some of which are run jointly with international energy firms like Chevron and Star Energy.

Geothermal plants cannot sell directly to customers and must instead negotiate prices with PLN, the state electricity company. “The price is simply not right,” says Mr. Abadi. He points out that Jakarta subsidises oil and diesel — these fuel subsidies will account for almost 200 trillion rupiah, or 13.3 per cent of government revenue in this fiscal — but geothermal is largely left to fend for itself.

Because the initial cost of exploration is high, as are investments in setting up the plants, the uncertainty regarding price means that the financial risk of failure is a deterrent.

The Indonesian government has a target of developing 9GW of installed geothermal energy capacity by 2015, which would account for 12 per cent of Indonesia’s total energy mix. But the gap between current capacity and this goal is wide. Even if all ongoing plans for geothermal development reach fruition, these would only cover third of the gap says Mr. Tavip Dwikorianto, General Manager of Pertamina’s Kamojang plant. And without more financial support, it is far from clear whether even plans already under way will be successful.

Jakarta had announced a feed-in tariff for geothermal energy earlier this year. However, Mr. Abadi says the sector is still awaiting details. “Without price clarity and certainty there is no economic feasibility for geothermal [energy],” he states flatly.

In Kamojang, where a total of four power plants with an installed capacity of 200MW are already operational, plans are afoot for a fifth plant with a 30MW capacity. Mr. Tavip hopes it will be functional by 2015.

On-site

As I tour the site, I learn that Kamojang is exceptionally well suited to electricity production because of the availability of dry steam wells, with little water content. The steam turns the turbines, which generate electricity. The water that is separated from the steam is reinjected into the ground to replenish the resource.

Frothy mud pools, and hot springs dot the mountain, visible manifestations of the energy that bubbles just below the earth’s surface. In fact the very first attempts to tap the energy of volcanoes in Indonesia were made in Kamojang. Back in 1926, when the country was still a Dutch colony, five test borings were drilled here. Four of these were eventually abandoned, but one still releases steam, and is now a tourist attraction.

I approach this fenced-off well gingerly, the noise from the erupting steam is violent. The surrounding mountain air is cool, but close to the well it warms, abruptly. A toothless man in tattered clothes spots me and comes running up. He vaults over the fence and in a second stands next to the gushing steam into which he floats empty plastic bags. With a cackle he indicates to me to take his picture, but my Pertamina hosts bundle me away to look at the plant’s electricity grid.

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