Indonesia Offers 19 Geothermal Blocks to Investors in 2016
The government of Indonesia plans to offer 19 geothermal blocks to investors in 2016 through tenders and direct assignment. Yunus Saifulhak, Chief of Geothermal Power at the Energy Ministry's Directorate General, said eight blocks will be offered through open tenders, while the 11 remaining geothermal power blocks will be given to state-owned enterprises. These 19 blocks are part of a larger package consisting of 27 geothermal blocks with a total combined power capacity of 1,535 megawatt (MW) that is to be offered to private and state-owned investors in the 2016-2017 period.
However, Saifulhak said the government is yet to decide which 19 geothermal blocks (out of the total of 27 blocks) are to be offered this year. Moreover, the government is also yet to decide which blocks will be given to state-owned enterprises through direct appointment and which are to be offered to the private sector through open tenders. He added that state-owned enterprises Pertamina, Perusahaan Listrik Negara (PLN), and Geodipa Energi are expected to be involved in the exploration of several blocks.
Of these 27 geothermal blocks the government has already tendered five. Winners are state-owned Pertamina Geothermal Energi (Gunung Lawu block), and the joint venture consisting of Pertamina and the consortium Optima Nusantara Energi and Enel Green Power (Way Ratai block). Tenders for three other geothermal blocks (Marana, Gunung Talang Bukit Kili and Danau Ranau) are currently in process.
Preliminary List of Geothermal Power Blocks 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
Geothermal power has become more and more on the agenda in recent years particularly as emerging market governments have to meet rising electricity demand in their rapidly growing economies, while there has also been a growing worldwide focus on clean energy sources (hence reducing dependence on coal, crude oil and natural gas for power generation).
Indonesia is estimated to contain vast reserves of geothermal energy, a relatively environment friendly energy source derived from the earth's inner heat. Based on the latest estimates, 40 percent of the world's geothermal reserves are hidden below the Indonesian surface. Although Indonesia already is the world's third-largest geothermal energy consumer, the percentage of electricity that is generated through geothermal power remains very small. In the nation's current energy mix only 0.6 percent is derived through geothermal power. Most of the geothermal potential remain untapped due to the lack of financial resources, Indonesia's 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 its estimated total potential (29,475 MW).
Read more: Geothermal Power in Indonesia - Overview & Analysis
Renewable energy is projected to account for 23 percent of Indonesia's total primary energy by 2025 (from approx. 5 percent currently). To accomplish this target the Indonesian government has high hopes for geothermal energy development. By 2025 the Indonesian government targets to raise the portion of geothermal power in the nation's energy mix to 3.63 percent from 0.6 percent currently.
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