Harnessing Geothermal Energy to Power Indonesia’s Renewable Future

Indonesia is harnessing its vast geothermal potential to drive a sustainable energy transition. As one of the world’s leading geothermal-rich nations, it is strategically integrating this clean energy into its national mix to bolster energy security. Geothermal plays a central role in Indonesia’s National Energy Policy and is key to achieving its ambitious renewable energy targets, including net-zero emissions by 2060 and new pathways for economic growth and energy independence.

Geothermal offers vast untapped potential for stable, green electricity. Unlike weather-dependent solar and wind, it is a reliable power source, vital for reducing reliance on non-renewable and imported energy. According to Indonesia Geothermal Association, the country holds 40% of the world’s geothermal reserves across Sumatra, Java, Bali, Nusa Tenggara and Sulawesi, given its positioning along the volcanic Ring of Fire. Yet, only about 10% of its estimated 24,000 megawatts geothermal capacity is currently utilized. The National Energy Plan (Rencana Umum Energi Nasional/ RUEN 2020-2024) has set a target of approximately 7,200 megawatts for geothermal energy usage by 2025. Expanding this capacity will not only enhance Indonesia’s energy independence but also advance its renewable goals, paving the way for a more resilient, sustainable future.

Shifting the energy mix
Indonesia’s existing energy mix is dominated by fossil fuels as its main source of energy (up to 85%), with renewables accounting for just 13-15%. The /government aims to increase the share of renewables to 17-19%% by 2025, with initiatives such as the National Electricity Supply Business Plan (Rencana Umum Penyediaan Tenaga Listrik / RUPTL), the mandatory B35 biodiesel program, biomass co-firing at Steam Power Plant (Pembangkit Listrik Tenaga Uap / PLTU), and geothermal exploration. To boost geothermal investment, the Indonesian government is also providing incentives including tax holidays, import duty exemption, and land and building tax exemptions during the exploration period.

Indonesia’s geothermal sector has also evolved beyond electricity generation, with its stable energy output now supporting emerging technologies like green hydrogen. Even though it is still in development, it is set to play a key role in the nation’s energy transition.




Unlocking geothermal potential through partnerships and clear strategies
Building on this momentum, Indonesia has strengthened its position as a global geothermal leader with additional developments. The newly operational 35MW Ijen Geothermal Power Plant (PLTP) – the first in East Java – now supplies clean energy to around 85,000 households. Additionally, state-owned Pertamina Geothermal Energy (PGE) has partnered with a Sinopec Group subsidiary to advance geothermal and green hydrogen development across Indonesia, China and other global markets – marking a significant step towards international cooperation and expanding geothermal’s role beyond electricity generation.

Realising geothermal energy’s potential requires clear strategies and industry collaboration. For instance, geothermal heat can support agriculture – boosting productivity, reducing emissions, and benefitting rural communities. Establishing clear performance metrics for geothermal projects are crucial to track progress, optimize operations and align with Indonesia's broader energy transition goals.




Overcoming infrastructure barriers with industry support
Regulatory and infrastructure constraints, especially in remote geothermal-rich regions, can hinder expansion. Addressing transmission and distribution challenges is key to unlocking Indonesia’s full geothermal potential. Industry players support this by providing advanced integration solutions, leveraging cutting-edge technologies and automation to develop sustainable and reliable energy systems.