Indonesia’s vast geothermal power potential attracts Iceland’s attention


Indonesia’s abundant geothermal resources have attracted Iceland’s attention, as the geothermal power pioneer seeks to partner with the Southeast Asian nation to harness its huge untapped geothermal potential.

Salak geothermal power plant in Indonesia. (Photo: Star Energy)

Stefán Haukur Jóhannesson, the Icelandic Ambassador to Indonesia, presented his letters of credentials to President Joko “Jokowi” Widodo on Oct. 23, marking the formal beginning of his ambassadorship in the geothermal-rich country. 

Jóhannesson said in a video broadcasted by Presidential Secretariat that Iceland is well-experienced in harnessing the Earth’s heat to meet its energy needs. The ambassador also revealed Iceland’s plans to share its geothermal technologies with Indonesia.

He said,“Indonesia has one of the biggest reservoirs of geothermal energy in the world. Iceland has been harnessing geothermal energy for over a hundred years now. We have quite significant technologies that we can offer to Indonesia.”

According to data from ThinkGeoEnergy and NS Energy, Indonesia ranks as the second largest geothermal energy producer globally, following the U.S.

The envoy also mentioned that he had facilitated Icelandic geothermal companies to have business-to-business (B2B) meetings at the Indonesia International Geothermal Convention and Exhibition not long ago.

According to government data, Indonesia holds 40% of the world’s geothermal reserves. Energy Ministry estimates revealed that Indonesia’s geothermal potential stood at around 23 GW. Indonesia has already installed several geothermal power plants with a combined capacity of about 2.3 GW. 

Last year, Energy Minister Arifin Tasrif visited Iceland and met with several Icelandic geothermal firms interested in expanding their business in Indonesia. These firms include Mannvit, Verkis, Isor, and North Tech Energy.

The minster also visited Iceland's Hellisheidi, namely one of the world's largest geothermal power plants by installed capacity. Iceland says that 66% of its primary energy sources come from geothermal.

Nesjavellir geothermal plant, the second-largest geothermal power station in Iceland. (Photo: Pixabay)

According to Infolink’s research, geothermal energy has a relatively high costs, but its power generation efficiency is also substantial. Since electricity can be generated from geothermal 24 hours a day with an average capacity factor of about 80% to 94%, the capital of geothermal energy can be recovered quickly.

Furthermore, Indonesia provides various financial incentives for geothermal energy, including tax exemptions on imported equipment and low interest rates on financing, which significantly lower the capital threshold for investments in geothermal energy.

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