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Harnessing The Power Of Mother Nature – ASEAN’s Geothermal Energy Opportunity

August 21, 2017
Many people only get to see, and feel, the immense heat and energy produced beneath the earth’s surface at famous tourist attractions such as Iceland’s Golden Circle geothermal park, Hell’s Gate in New Zealand, or the “Old Faithful” geyser in Yellowstone Park.
In the near-future however, geothermal is predicted to power many more homes and communities around the world. As geothermal energy technology advances, countries with geothermal resources are expected to leverage more of these resources to electrify their cities and towns. And while it is largely untapped in ASEAN, the geothermal power opportunity in the region is significant.

How is Geothermal Power Produced?

This U.S. Department of Energy video offers an easy-to-follow explanation.


Geothermal Energy Hotspots

The first geothermal energy use for industrial purposes was in Italy in the 19th century, and the first successful production of geothermal electricity took place in the early 20th century.

Today, World Energy Council research reveals that global installed geothermal power capacity reached 13.2 gigawatts (GW) at the end of 2015, and countries with the largest installed capacity were the US, Philippines, Indonesia, Mexico and New Zealand. Looking to the future, geothermal energy production is predicted to grow steadily – for example, an MIT report says geothermal energy in the US has the potential to have an installed capacity of 100,000 megawatts (MW) within the next 50 years.

In the wake of the Paris Climate Change Summit - with nations agreeing to reduce greenhouse gas emissions based on country-by-country targets - the clean, green, sustainable nature of geothermal power grows makes it increasingly attractive as an alternative source of energy, especially in parts of ASEAN.

The Ring of Fire

Indonesia and the Philippines for example, sit on the edge of the turbulent, and dramatically named “Ring of Fire” region. This area of the Pacific Ocean accounts for more than 90% of earthquakes and 75% of volcanic activity in the world.

While this presents tremor and tsunami risks, it also offers great clean energy opportunities for Indonesia and the Philippines. Compared to the U.S., which produces 3,567 MW of operational geothermal generation annually, both countries lag in terms of capacity - the Philippines and Indonesia today, produce 1,930 MW and 1,375 MW of energy from geothermal sources respectively.

This is steadily changing however, and multi-national companies Unilever and Nestle recently announced plans to use geothermal energy to power some of their operations in the Philippines. San Miguel Corp, the nation’s biggest food and beverage company is also eyeing geothermal power as a potential fuel source for the future.


127 Volcano Opportunity

While the Philippines utilizes an estimated 50% of total potential, which sits around 4,000 MW, Indonesia has a much bigger opportunity.

Home to more than 127 active volcanoes, Indonesia is the world leader in terms of untapped geothermal energy, with an estimated 30,000 MW of potential capacity. This figure accounts for nearly 15% of total global geothermal energy potential.

While Indonesia currently utilizes less than 5% of that, the country is moving forward to make more of it. Under the national energy policy on renewable energy, the government aims to produce 7,000 MW of geothermal power by 2025.

Indonesia to Further Tap Its Geothermal Resources

One of the biggest challenges to the development of Indonesian geothermal energy has been the high risk factors, and costs, associated with exploratory drilling - a 2014 report by the Asian Development Bank estimated that an additional 3,000 MW of geothermal energy production in Indonesia would require US$4 billion in equity, and US$9.5 billion in debt financing.

Prospects are brighter today however, thanks to a recent announcement by Finance Minister, Sri Mulyani Indrawati to make financing from the government’s Geothermal Fund Facility available to accelerate geothermal exploration and development.

While geothermal resources take time to develop, this decision will enhance Indonesia’s energy diversity, and security in the long term with renewables tipped to contribute 23% of the total energy mix by 2025, and geothermal accounting for 8% of total electricity production.