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Indonesia: a New Frontier for Geothermal

5 min.

Indonesia: a New Frontier for Geothermal

Preparatory work is underway for the exploration phase of Enel Green Power's first geothermal project in Indonesia: it will contribute to the transformation of the national energy mix and help solve a paradox. With its 130 active volcanoes, the country has a very high potential for geothermal resources, and yet not all inhabitants have access to electrical energy.

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Indonesia has more volcanoes than any other country: 150, 130 of which are active. Thanks to its geological makeup, it has enormous geothermal potential, estimated at 29 GW, equal to 40% of the world’s reserves, which is mostly not yet exploited. 9% of its 260 million inhabitants do not have access to electricity.

Enel Green Power’s project to develop geothermal energy will help rectify the so-called energy divide by bringing access to electricity to an increased number of people.

 

A Revolution that Comes from the Earth

Indonesia’s energy future is now moving toward geothermal. A future that has yet to come about because of complex regulations and a lack of understanding of the territory’s potential, two factors that have long slowed the use of subsoil energy and investments in the sector.

 

"In Indonesia, a strong increase in energy demand is expected, due both to the high rate of economic growth, with an average annual growth equal to 5% of the GDP, and to an increase in the electrification rate"

 

In 2014, the Indonesian parliament approved a law that, by eliminating bureaucratic obstacles and regulatory uncertainties, regulates and favours the retrieval of geothermal resources for the production of electrical energy.

The Asian country’s commitment to using clean energy also characterises the National Energy Plan 2016-2025, which aims to increase the share of renewables in the energy mix from the current 13% to 23% by 2025, with geothermal energy holding a prominent place.

 

The Innovation that Brings Italy and Indonesia Together

The future of Indonesia is deeply linked to Italy, especially Tuscany. In Larderello, Enel Green Power manages the oldest geothermal complex in the world. These metalliferous hills in the province of Pisa are where we cultivate and develop the know-how that we then export to the countries where we work, from the United States, to Chile and Indonesia.

Based on the latest technology and on our solid experience in geothermal energy, we can contribute to Indonesia’s ambitious Energy Plan, which is part of a broader plan to reduce greenhouse gas emissions by 26% before 2020 and by 29% before 2030.

In 2015, through a partnership with the Indonesian company PT Optima Nusantara Energy, specialised in the development of geothermal projects, we were awarded the rights for geothermal resource exploration in preparation for the construction of the 55-MW Way Ratai project, following a public tender called by the Ministry of Energy and Mineral Resources.

Way Ratai is our first project in the country and marks Enel’s entrance into the Indonesian renewables market. It’s also a launching point for building a solid platform to create investment opportunities in the country in the future.

 

"Indonesia is southeast Asia’s largest economy and one of the main emerging markets in the world. This award is a first step for the growth of Enel’s activities in the region"
Francesco Starace, CEO of Enel.


The construction of the geothermal plant, located in the province of Lampung, depends on the results of the exploration and would be completed and brought into operation in 2022. The estimated energy produced will be roughly 430 GWh a year, energy that will then be sold to the public utility PLN, as part of a 30-year Power Purchase Agreement.

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