Government of Indonesia to Auction Geothermal Power Blocks
The government of Indonesia will offer 21 geothermal blocks to investors over the next two years. Combined these 21 blocks, which are estimated to require USD $4.2 billion in investment, have a power generation capacity of 1,065 megawatt (MW). An official of Indonesia's Ministry of Energy and Mineral Resources said most of the geothermal power blocks will be offered through an open auction. The first auction is expected to take place in March 2016.
Yunus Saifulhak, Chief of Geothermal Power at the Energy Ministry's Directorate General, said the government has selected 26 geothermal working areas to be offered to investors. Five have already been tendered last year. The remaining 21 blocks are set to be offered in 2016-2017. The Indonesian government is currently studying which blocks are ready to be tendered first.
The five blocks that were tendered last year are Kepahiang (Bengkulu), Marana (Central Sulawesi), Way Ratai (Lampung), Mount Lawu (Central/East Java) and Lake Ranau (Lampung/South Sumatra).
Saifulhak added that 16 blocks will be offered through an open auction, eight in 2016 and eight in 2017. For the remaining five geothermal blocks the government will select the operator (a state-owned company) through direct appointment. Most likely the government will appoint Pertamina Geothermal Energy (PGE), subsidiary of energy company Pertamina, to operate these blocks.
21 Geothermal Power Projects to Be Tendered in 2016-2017:
| Block | Capacity (MW) | Estimated Investment |
| Bonjol | 60 | USD 240 million |
| Gunung Talang Bukit Kili | 20 | USD 80 million |
| Gunung Endut | 40 | USD 160 million |
| Candi Umbul Telomoyo | 55 | USD 220 million |
| Gunung Wilis | 20 | USD 80 million |
| Gunung Arjuno Welirang | 110 | USD 440 million |
| Gunung Pandan | 10 | USD 40 million |
| Gunung Dede Pangrango | 55 | USD 220 million |
| Songgonti | 20 | USD 80 million |
| Sipoholon Ria-Ria | 20 | USD 80 million |
| Simbolon Samosir | 110 | USD 440 million |
| Graho Nyabu | 110 | USD 440 million |
| Suwawa | 20 | USD 80 million |
| Sembalun | 20 | USD 80 million |
| Oka-Ile Ange | 10 | USD 40 million |
| Bora Pulu | 40 | USD 160 million |
| Gunung Hamiding | 10 | USD 40 million |
| Bonga Wayaua | 5 | USD 20 million |
| Gunung Geureudong | 110 | USD 440 million |
| Gunung Galunggung | 110 | USD 440 million |
| Gunung Ciremai | 110 | USD 440 million |
Source: Ministry of Energy and Mineral Resources
Renewable energy is projected to account for 23 percent of Indonesia's total primary energy by 2025 (from 5 percent currently). To accomplish this target the Indonesian government has high hopes for geothermal energy development. Indonesia is estimated to contain about 40 percent of the world's geothermal reserves. However, most of these reserves remain untapped due to the lack of financial resources, the complicated investment climate (particularly when it involves natural resources), and uncompetitive power tariffs. Indonesia currently uses 1,439 MW of geothermal-derived power, less than five percent of the total potential (29,475 MW).
Energy Mix Indonesia:
| Energy Mix 2011 |
Energy Mix 2025 |
|
| Oil | 50% | 25% |
| Coal | 24% | 30% |
| Gas | 20% | 22% |
| Renewable Energy | 6% | 23% |
Source: Ministry of Energy and Mineral Resources
These geothermal power blocks are not part of the government's recently unveiled program to provide an additional 35,000 MW of power capacity by 2019.
Further Reading:
• Geothermal Energy Development in Indonesia: Analysis & Overview