Geothermal Development Faces Barriers in Southeast Asia - VOA - Voice of America English News
Published December 14, 2025
Geothermal Development Faces Barriers in Southeast Asia
Geothermal energy has long been recognized as a promising renewable energy source in Southeast Asia, a region rich in geothermal resources. However, despite its potential, the development of geothermal energy projects is facing significant challenges that hinder progress. Various factors, including financial, regulatory, and technical barriers, are impeding the growth of this sustainable energy sector.
According to the International Renewable Energy Agency (IRENA), Southeast Asia possesses an estimated 28 gigawatts (GW) of geothermal potential, primarily located in Indonesia and the Philippines. This potential represents a significant opportunity for the region to diversify its energy mix and reduce dependence on fossil fuels. Nevertheless, only a fraction of this potential has been realized, with approximately 2.7 GW of geothermal capacity installed as of 2020.
One of the primary challenges facing geothermal development in Southeast Asia is the high upfront capital costs associated with exploration and drilling. The exploratory phase of geothermal projects can be particularly expensive, with costs often reaching up to $10 million per well. This financial burden poses a significant risk for investors, especially in a region where access to financing can be limited.
Furthermore, the long lead times required for geothermal projects can deter potential investors. The exploration phase alone can take several years, followed by additional time for permitting and construction. This extended timeline can make geothermal projects less attractive compared to other renewable energy sources, such as solar and wind, which can be deployed more rapidly.
Regulatory hurdles also play a crucial role in the slow pace of geothermal development. In many Southeast Asian countries, the legal and regulatory frameworks governing geothermal energy are either underdeveloped or inconsistent. For instance, the lack of clear guidelines and policies can create uncertainty for investors, making it difficult to navigate the permitting process. In some cases, overlapping jurisdictions between different government agencies can further complicate project approvals.
Moreover, the issue of land rights and community engagement poses additional challenges. Geothermal projects often require large land areas for exploration and development, which can lead to conflicts with local communities and indigenous populations. In some instances, inadequate consultation and engagement with affected communities have resulted in opposition to geothermal projects, delaying or even halting development.
Despite these challenges, several countries in Southeast Asia are making strides in advancing their geothermal sectors. Indonesia, for example, is the largest producer of geothermal energy in the world, with around 2.1 GW of installed capacity. The Indonesian government has set ambitious targets to increase its geothermal capacity to 7.2 GW by 2025, supported by a range of policy measures aimed at attracting investment.
In the Philippines, the government has also taken steps to promote geothermal development. The Department of Energy has implemented a feed-in tariff system to incentivize the growth of renewable energy projects, including geothermal. This system guarantees a fixed price for electricity generated from renewable sources, thereby providing a stable revenue stream for developers.
Moreover, regional cooperation and knowledge sharing can play a vital role in overcoming barriers to geothermal development. Initiatives such as the ASEAN Centre for Energy (ACE) are working to enhance collaboration among member states to share best practices and experiences in geothermal energy development. By fostering regional partnerships, countries can leverage each other's strengths and resources to accelerate the growth of the geothermal sector.
Technological advancements also hold promise for improving the feasibility of geothermal projects. Innovations in drilling techniques, such as enhanced geothermal systems (EGS), have the potential to reduce exploration costs and increase the efficiency of geothermal energy production. These advancements could make geothermal energy more competitive with other renewable sources in the region.
Additionally, the integration of geothermal energy into national energy plans can help drive development. As countries in Southeast Asia seek to meet their growing energy demands and reduce greenhouse gas emissions, incorporating geothermal energy into their energy strategies can provide a sustainable solution. Governments can play a crucial role by establishing clear policies and frameworks that support geothermal development while ensuring environmental protection and community engagement.
In conclusion, while Southeast Asia has significant geothermal potential, a range of barriers must be addressed to unlock this resource. By focusing on financial, regulatory, and technical challenges, and fostering regional cooperation, countries can pave the way for the sustainable development of geothermal energy. As the region continues to explore its renewable energy options, geothermal energy could emerge as a key player in achieving energy security and sustainability.