With green energy awareness on the rise, Indonesia could have up to US$100 million worth of efficient energy projects in the next two years, the International Finance Corporation (IFC) predicts.
IFC efficient energy program manager Tom Moyes said in an interview last week that his organization was optimistic about the prospects for such projects.
“We see that Indonesian firms have a big chance now to convert their non-renewable energy sources into more efficient and renewable ones,” he said.
“The market for financing such energy-efficient projects is huge in the country.”
He added Indonesian companies had abundant alternatives of energy sources that were more friendly for the environment and could also reduce their energy costs.
“To generate electricity, for instance, they can use geothermal or use agricultural waste, such as palm oil and rice husks,” Moyes said.
Indonesia has total estimated geothermal reserves of 27,000 megawatts (MW), with about 9,600 MW in Sumatra, 5,400 MW in Java, 1,500 MW in Sulawesi, and the rest scattered across the country.
To date, though, it has only managed to generate 1,155 MW from 16 geothermal power plants already in operation in Java, Sumatra and Sulawesi.
Last year, the country produced 19 million tons of crude palm oil and 60 million tons of rice.
After processing, an equivalent 19 million tons of palm fruit waste would have been produced from this output.
Likewise, the total of 60 million tons of rice produced would have yielded approximately 20 percent waste, or about 12 million tons of rice husks.
Amid the rising demand for electricity and slow growth of supply using mostly diesel and coal, this huge amount of agricultural waste and geothermal potential could have great potential for generating electricity and helping regreen the environment, says the IFC, the private arm of the World Bank.
An IFC study shows that by using simple but effective technology at relatively low cost, a ton of waste oil palm biomass or of rice husks can generate 800 kilowatts (KW) of electricity.
Moyes said financing efficient-energy projects could be a profitable business while at the same time help reduce carbon emissions, which have been blamed for global climate change.
“We’ll be promoting such projects in Indonesia and helping to educate local banks on financing the efficient-energy projects,” Moyes added.
The International Energy Agency says that from 1994 to 2004, CO2 emissions per capita from fossil fuel combustion grew faster in Indonesia than in the higher-economic-growth China or India.