Tue, 27 Apr 2010

From: AFP

President Susilo Bambang Yudhoyono pledged Monday to make Indonesia the world's biggest user of clean, renewable geothermal energy, and urged private investors to back him.

The archipelago of 234 million people and more than 200 volcanoes is estimated to possess around 40 percent of the world's geothermal energy potential, or around 28,000 megawatts (MW).

It already has plans to double its geothermal energy output but analysts say the high costs associated with converting underground heat into electricity is an obstacle to investment.

"After the United States with close to 4,000 megawatts and the Philippines utilising approximately 2,000 megawatts, Indonesia is currently only using 1,100 megawatts" of geothermal energy, Yudhoyono told a conference in Bali.

"It is my intention that Indonesia will become the largest user of geothermal energy... We envision that by 2025, about five percent of our national energy needs will be met through the use of geothermal energy."

Within five years Indonesia aims to add 4,000 MW to its geothermal capacity, and by 2025 it would generate a total of 9,000 MW from underground heat sources including volcanoes.

"We urgently need to accelerate geothermal development in our country. But this is a task that the government alone cannot carry out. We need the help of all stakeholders," the president told the World Geothermal Congress.

He said 8.6 billion dollars worth of projects already under way would eventually produce only some 2,885 MW of power, indicating the scale of the investments required to meet the 2025 target.

Geothermal energy is far cleaner than burning of fossil fuels such as coal, one of the main contributors to greenhouse gases blamed for global warming.

Yudhoyono said geothermal and other clean energies would help the country cut greenhouse gas emissions by 26 percent over 2005 levels by 2026 -- making a "considerable contribution to climate stability".

"This effort, of course, is part of a larger package of mitigation and adaptation measures that are necessary to successfully manage the reality of climate change," he told delegates.

"Everything that can reduce carbon emissions must be brought into play."

Coal and oil are by far the biggest sources of Indonesia's growing energy needs, reportedly accounting for almost 70 percent, followed by natural gas and hydropower on about 18 percent each.

Geothermal contributes only three percent to state-run energy company Perusahaan Listrik Negara's power capacity.

Indonesia is one of the fastest growing economies in the world but currently only 65 percent of Indonesians have access to electricity. The goal is to reach 90 percent of the population by the end of the decade.

The fourth World Geothermal Congress opened Sunday on the resort island of Bali and is expected to attract some 2,000 people from more than 80 countries over six days.

Indonesia hopes to generate hundreds of millions of dollars in new investment from the event, officials have said.

Yudhoyono said state-owned companies would account for half the investment required to meet the government's targets, with the remainder coming from the private sector.

"Already we have seen contributions from Chevron, Star Energy and Medco, and we hope to see more experienced international companies take up this challenge," he said.

Geothermal backers welcomed the recent completion of negotiations between a consortium of US, Japanese and Indonesian companies and the state electricity company over the 340 MW Sarulla project on Sumatra island.

Several firms such as Tata and Chevron have submitted bids to build another geothermal plant in North Sumatra, with potential for 200 MW.