Indonesia geothermal energy development

Indonesia holds approximately 23 to 24 gigawatts of geothermal potential, representing roughly 40 percent of the world’s total capacity, yet only about 11 percent has been developed for electricity generation.

Initial assessments of the sector identified significant barriers to expansion, including high drilling costs—estimated between 6 and 8 million USD per well—and long drilling durations. Additionally, public concerns regarding deforestation and the environmental impact of large-scale concessions have been noted. To combat these issues, the Ministry of Energy and Mineral Resources announced 14 exploration locations with a combined potential of 732 megawatts, requiring an estimated 400 million USD in investment.

Subsequent discussions have emphasized the need for public education and regional coordination to mitigate social and environmental concerns. Experts have highlighted the importance of explaining that geothermal reservoirs typically reside in rock layers distinct from shallow aquifers used for household water. Furthermore, stakeholders suggest that geothermal development, such as the Gunung Ungaran plant, must be integrated with local sectors like tourism through collaboration between government, local communities, and hospitality businesses to ensure economic growth and environmental preservation.