Indonesia sets eyes on becoming world’s geothermal superpower - Eco-Business
Published December 14, 2025
Indonesia Aims to Become the World’s Geothermal Superpower
Indonesia is strategically positioning itself to emerge as a global leader in geothermal energy. The nation is endowed with significant geothermal resources, boasting an estimated potential of 29 gigawatts (GW), which is approximately 40% of the world’s total geothermal energy potential. This abundant resource has prompted the Indonesian government to set ambitious targets for geothermal energy development as part of its broader renewable energy strategy.
In recent years, Indonesia has made notable strides in harnessing its geothermal energy capabilities. Currently, the country has an installed geothermal capacity of around 2.1 GW, ranking it second in the world after the United States. The government aims to increase this capacity to 7.2 GW by 2025 and further escalate it to 9.5 GW by 2030. These targets are part of Indonesia’s commitment to achieving a renewable energy mix of 23% by 2025, as stipulated in the National Energy Policy (KEN) and the Renewable Energy Law.
Government Initiatives and Support
The Indonesian government has implemented various initiatives to support the development of geothermal energy. One of the key measures is the establishment of the Geothermal Energy Development Fund, which aims to provide financial assistance for exploration and development activities. This fund is designed to mitigate the high upfront costs associated with geothermal exploration, which can be a significant barrier to entry for investors.
Additionally, the government is actively working to streamline the permitting process for geothermal projects. By reducing bureaucratic hurdles, Indonesia hopes to attract both domestic and foreign investment in the geothermal sector. The Ministry of Energy and Mineral Resources has also introduced incentives, such as feed-in tariffs, to encourage the development of geothermal power plants.
Investment Opportunities
As Indonesia seeks to enhance its geothermal capacity, it presents substantial investment opportunities for companies interested in the renewable energy sector. The government has identified several geothermal fields across the archipelago that are available for exploration and development. These fields include the well-known locations of Wayang Windu, Sarulla, and Patuha, among others.
International companies are increasingly recognizing the potential of Indonesia’s geothermal resources. Recent partnerships have been formed between Indonesian state-owned enterprises and foreign investors to develop geothermal projects. For instance, the Sarulla geothermal project, which has an installed capacity of 330 megawatts, is a joint venture between Indonesian and Japanese firms, showcasing the collaborative efforts to harness geothermal energy.
Environmental and Economic Benefits
Geothermal energy is recognized for its environmental benefits, particularly in reducing greenhouse gas emissions compared to fossil fuels. Indonesia's focus on developing its geothermal resources aligns with global efforts to combat climate change. By expanding its geothermal capacity, Indonesia aims to reduce its reliance on coal and other fossil fuels, thus contributing to a cleaner energy future.
Moreover, the development of geothermal energy has significant economic implications. It is expected to create thousands of jobs in various sectors, including construction, operation, and maintenance of geothermal power plants. The local communities surrounding geothermal fields can also benefit from infrastructure improvements and increased economic activity, leading to enhanced living standards.
Challenges Ahead
Despite the promising outlook for geothermal energy in Indonesia, several challenges remain. One of the primary issues is the high initial investment required for geothermal exploration and development. The geological complexities associated with geothermal resources can lead to uncertain outcomes, making it a risky investment for many companies.
Additionally, there are concerns regarding land use and environmental impact assessments. Geothermal projects often require extensive land areas, which can lead to conflicts with local communities and conservation efforts. Ensuring that the development of geothermal resources is conducted responsibly and sustainably is crucial for maintaining public support and minimizing environmental impacts.
Future Prospects
Looking ahead, Indonesia's ambition to become a geothermal superpower is supported by its vast resources and government initiatives. The ongoing commitment to renewable energy development, coupled with international partnerships, positions Indonesia as a key player in the global geothermal energy market.
As the world increasingly turns to renewable energy sources, Indonesia’s geothermal potential offers a viable solution to meet energy demands while addressing environmental concerns. By overcoming existing challenges and continuing to invest in geothermal technology, Indonesia can solidify its status as a leader in the geothermal sector.
In conclusion, Indonesia's journey towards becoming the world’s geothermal superpower is marked by significant potential and strategic initiatives. With a clear roadmap and the right investments, the country is on track to maximize its geothermal resources, contributing to a sustainable energy future both domestically and globally.
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