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Indonesia has the potential to become a global center for geothermal industry

Indonesia is believed to be the center of the world-scale geothermal industry in the future. This cannot be separated from the large geothermal potential it has. To be able to achieve this target can not just stay silent. There must be an effort to make geothermal energy more optimal.

Ahmad Yuniarto, President Director of PT Pertamina Geothermal Energy (PGE), part of Pertamina's Subholding Power and New Renewable Energy, said that by becoming the center of the world's geothermal industry, energy security supported by geothermal energy can automatically be realized. Geothermal is one of the most relevant new renewable energies to become the main energy resource to meet national needs.

"Indonesia has great potential for geothermal because of the abundance of resources. The electricity produced from geothermal is also very stable and there is still room for competitive costs and geothermal energy is very competent as a base load for power plants for any electrical system," said Yuniarto, Monday ( 15/8/2022).

According to Yuniarto, to be able to pursue the decarbonization target of geothermal development, it cannot be carried out as usual as it is now. There needs to be extra acceleration from the government as the regulator, not just relying on business actors. Green hydrogen, for example, which is an advanced product of geothermal energy, its development can provide an extraordinary multiplier effect. However, its development requires a large amount of funds so that this is a challenge that must be answered by PGE.

"We can use geothermal as a green economy to have an effect on Indonesia. This condition provides more value to Indonesia, but can we project green hydrogen at an efficient cost," said Yuniarto when speaking at the 11th ITB International Geothermal Workshop 2022, recently.

PGE has coordinated with several Ministries for the use of green hydrogen. PGE will also seek strategic partners for the development of this new business. Not only for geothermal businesses, partners are also expected to bring technology and funding for the development of green hydrogen.

Green hydrogen is believed to be developed side by side with geothermal potential because its reserves are also around geothermal reserves. Indonesia, which has large geothermal reserves, certainly has a big advantage. "In the future, green hydrogen is not only in demand from within but also from abroad," he said.

To date, PGE is ranked first in national geothermal management with an installed capacity of 1,887 megawatts (MW). A total of 1,205 MW is managed with partners and 672 MW is operated alone by PGE.

In the RUPTL geothermal development is expected to reach 5444.5 MW in 2030 with details of PLN's installed capacity of 1,077.5 MW and IPP of 4,367 MW.

In the next 10 years, PGE targets to increase the installed capacity of clean energy sourced from geothermal to more than double that which is currently operated by PGE alone.
In 2030, PGE targets to increase the installed capacity which is managed directly by PGE to 1,540 MW. "This means that in 2030 PGE has the potential to be able to contribute a potential emission reduction of 9 million tons of CO2 per year, and targets to become the top three geothermal producing companies in the world," said Yuniarto.

Meanwhile, Hendra Yu Tonsa Tondang, Vice President of Geothermal at PT PLN (Persero), said that a crucial problem in geothermal development is the gap in electricity tariffs and the project's economy. It is very decisive for the continuity of geothermal.

According to him, there are several instruments to fill or close the gap, including the implementation of a carbon tax, lowering the cost of electricity production in Eastern Indonesia, capital expenditure incentives, government drilling, green/clean energy funds and the application of the right technology so as to increase the success ratio. project.

"We know that the government is currently conducting an exploration program, government drilling," said Hendra.

According to him, NRE electricity tariffs are still higher than fossil fuels. For this reason, government intervention is still very much needed to encourage the maximum utilization of NRE. "We need policies from the government, especially tariffs. When the tariff is higher than the BPP, the subsidy will also increase, right," he said.

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