Geothermal power in Indonesia

As a result of its volcanic geology, it is often reported that Indonesia has 40% of the world's potential geothermal resources, estimated at 28,000 megawatts (MW).

[1] With 2,356 MW of installed capacity as of year-end 2022, this puts Indonesia in second place in the world after the United States in utilizing geothermal power, superseding the Philippines.

[7] Between 1989 and 1997, explorations were conducted at the Sibayak geothermal field in northern Sumatra,[8] and subsequently a 12 MW plant has been placed in operation.

[3] The Wayang Windu Geothermal Power Station in West Java, owned by British Star Energy, has been in operation since 2000.

Exploration of the Bedugul Geothermal Field in Bali started in 1974[11] and though production capacity was estimated at 175 MW in 2008, the project is on hold after being opposed by local residents.

[1] Development of the industry, however, involves a range of complex policy issues, some of which are proving to be a continuing source of controversy.

[14] In mid-2011, for example, the Indonesian Government issued an expected regulation providing certain guarantees for investors with the aim of encouraging increased investment in the geothermal sector.

[16] In addition, work is starting on the Sarulla geothermal plant in North Sumatra with a total planned capacity of 320 MW.

[20] In recent years, the Indonesian Government has announced plans for two 'fast-track' increases in the total capacity of Indonesia's electricity generation network of 10,000 MW each.

[31] Official policy from the Ministry of Finance has traditionally been cautious, resisting the suggestion that unspecified risks should be borne by the Indonesian budget.

In response to reports about certain of the risks that private sector investors were concerned about, in mid-2011 the government issued a regulation intended to provide guarantees that the state electricity utility PLN would meet financial obligations to independent power producers (IPPs) who invested in the geothermal sector.

But the regulation was quickly criticised by representatives of private investors as being too limited and for failing to clarify important concerns.