|Fig. 1: First Successful Geothermal Test in Indonesia at Kawah Kamojang in 1926. (Source: Wikimedia Commons)|
Geothermal Energy is a renewable energy source that utilizes the heat generated and stored in the Earth to drive an electrical generator through steam or hot water. The thermal energy of the Earth's crust originates from the original formation of the planet and the radioactive decay of its core. As a result of Indonesia's volcanic geology, the island archipelago has an abundance of geothermal resources and is considered to have one of the largest geothermal energy potentials in the world.  Given Indonesia's continued population and economic growth, energy demands has increased rapidly. The country has been dependent on oil for its main source of energy, however volatile oil prices and heavy government subsidies has led to difficulties in meeting increasing demands - leading to regular blackouts in more rural areas of the country. 
Geothermic exploration in Indonesia began in 1925 and was first successfully tested in Kawah Kamojang in 1926 - as shown in Fig. 1. Drilling and exploration for deep resources, however, still remains costly and limited to areas in Indonesia that border tectonic plates. Geothermal energy currently represents 5.8% of the countrys 248.9 TWh (8.96 × 1017 joules/year) or 28,259 MW energy supply. 
The magnitude of Indonesia's available geothermal resources vary greatly. A study conducted by the West Japan Engineering Consultants, estimated that the exploitable potential across the country's existing 50 fields is 9,000 MW. However, despite being situated on one of the world's largest geothermal energy reserves, Indonesia today only generates about 1,647 MW from its geothermal wells.  This production output trails behind the United States and Philippines' geothermal power output of 3,450 MW and 1,870 MW respectively.  In 2011, approximately 1,200 MW of Indonesia's 1,647 MW geothermal installed production capacity originated from six geothermal fields on the islands of Java, North Sumatra and North Sulawesi. Harboring large potential geothermal energy reserves, the geological make-up of Indonesia's land has approximately 265 potential sites. Furthermore, within suitable sites, the underground heat is relatively easy to exploit and mine due to its close proximity to the Indonesia's surface.
While Indonesia has a significant amount of geothermal reserves, around 80% of its geothermal resources are located in designated conserved forest areas.  Indonesia's mineral and and coal mining law lists geothermal exploration and extraction as a mining activity and thus governmental approval is required for geothermal activities in conserved forest areas. While a 2 year moratorium in 2011 halted development, Indonesia's geothermal output grew by 130 MW in 2016 and is on track to grow by 255 MW through 2018 - surpassing the Philippines as the second largest geothermal producer in the world. A new geothermal legislation plan passed by the Indonesian parliament in 2014 targets the countrys output to overtake the USA geothermal production in the next decade. 
Expansion in the geothermal sector in often held back by a regulatory and governmental uncertainty and the perceived environmental risks of development. Current plans rely heavily on private sector investments which raises concerns over geological and regulatory risks and which party should bear these risks. Policy makers in the renewable energy sector view that at least some of the risk burden should be borne by the Indonesian government and supported by the national budget. With an eye to meet the governments official energy targets, both private and public interest bodies has asked Indonesia's Ministry of Finance to provide financial support that could be borne by the Indonesian budget. The Indonesian government plans to achieve around 6,000 MW in geothermal capacity by 2020 - close to a fourfold increase to current output.  This target will require both governmental support and private sector investment to materialize. Failure in Indonesia's expansion of geothermal energy to meet growing energy demands will likely be substituted by coal and other non-renewable power plants. 
© Kalvin Wang. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
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