Jakarta, Indonesia– Providing energy around the clock, using minimal space and being a clean source of energy – geothermal energy seems an ideal option for countries like Indonesia and the Philippines, where the potential is high, and governments are seeking to transition away from highly polluting fossil fuels.
However, most of the potential of geothermal energy, which arises from harnessing the heat produced by the Earth from underground hot water tanks to power turbines that generate electricity, remains untapped in these countries and around the world – where financial, regulatory and societal barriers have stalled Growth.
Available funding and local regulatory changes have begun to address these barriers, but experts say more needs to be done to unlock the vast clean energy source trapped beneath the Earth’s surface.
Countries with high geothermal potential – such as the United States, Indonesia and the Philippines – are usually located near tectonically active areas where hot water or steam is naturally transported to the Earth’s surface through volcanic activity, or can be accessed by shallow drilling.
“We essentially stand on our sun, from which we can obtain clean, reliable energy,” said Marit Brümer, CEO of the Germany-based International Geothermal Association.
Experts also praise geothermal power plants for their ability to operate continuously to meet the minimum energy requirement around the clock, without being affected by the weather, with a long life and minimal maintenance.
As countries shift toward renewable and clean energy, geothermal energy use is expected to grow: In Southeast Asia, geothermal generation is expected to increase tenfold from 2020 to 2050, reaching 276 million megawatt-hours, according to the IEA. International.
With their spiraling volcanoes and bubbling lakes, Indonesia and the Philippines—two archipelago nations in Southeast Asia located on the seismically active “Ring of Fire”—are the second and third largest users of geothermal energy in the world, with some of the highest levels of geothermal energy potential. The United States is number one.
However, Indonesia uses less than a tenth of its huge reserves, which make up 6% of its energy supply. In the Philippines, there is about 8% geothermal energy Developedpose 14.6% of energy use in the country, and is the largest source of renewable energy in the country.
Both countries plan to expand the use of geothermal energy as they transition away from fossil fuels: Indonesia aims to increase the share of geothermal generation by at least 8% by 2030, making it the second largest exporter of renewable energy after hydropower. Targeting the Philippine government Several projects To enhance geothermal capacity by adding approximately 1.5 GW, which is nearly double its current use.
But the exploratory phase of geothermal development — when companies conduct testing and drilling to ascertain the size, temperature, pressure and potential production rates of sites — is expensive and risky. This makes it difficult to attract development financing, said Shigeru Yamamura, an energy expert at the Asian Development Bank.
“This is the most difficult part for developers, because (financially) they cannot bear the risks of exploration 100% themselves,” Yamamura told the Associated Press.
Climate financing for geothermal development is limited for most Southeast Asian countries, representing just 9% of the financing available to ASEAN – a ten-nation political and economic bloc in the region, which includes Indonesia and the Philippines.
ASEAN 2024 Energy report He said “blended finance” using public and private sources, grants and green bonds could help bridge the gap.
The Philippine government has announced green energy auction plans for geothermal energy and is preparing a “Smart Green Grid Plan” that prioritizes renewable energy – vital to enabling private developers to obtain financing from banks. Yamamura said this indicates progress in supporting investment policies.
Indonesian President Prabowo Subianto has focused on geothermal energy as part of the country Energy transmission. The Ministry of Energy and Mineral Resources says it is working to shorten grace periods and consider ways to increase rates of return on investments in geothermal projects. State power utility Perusahan Listrik Negara also said it was committed to promoting geothermal energy development.
The World Bank is providing a $150 million loan to increase Indonesian investments in geothermal energy by reducing early-stage exploration risks. The Green Climate Fund and Clean Technology Fund provide $127.5 million.
Even when funding is secured, societal decline can slow development.
In Indonesia, villagers have protested the projects, citing safety and environmental concerns: several geothermal sites in Indonesia have suffered deadly gas leaks in the past five years.
Timothy Ravis, a doctoral student in global development at Cornell University, said some Indonesian communities do not understand what geothermal energy is and how they can benefit from its development.
Protests at geothermal sites in the Philippines have led to at least one company paying royalties to indigenous groups concerned about land degradation caused by geothermal development.
Governments and companies should work to get approval from communities near projects to help ensure their success, Brummer said.
“We need to show that this development benefits all people, not just the company,” she said. “It’s not about being a good neighbor, it’s about being a better neighbor and really working with communities to respect their concerns.”
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