Optimization of Indonesian Geothermal Energy Resources for Future Clean Electricity Supply: A Case of Java-Madura-Bali System

Abstract

Total of geothermal potential for power generation in Indonesia is estimated to be around 28 GW, equal to 40% of world’s potential. Around 36% of Indonesian geothermal potential is located in Java and Bali Islands. In 2006, total installed capacity of geothermal power plants was only 852 MW or 3% of total potential in the country. The Philippines, in comparison, has higher geothermal utilization for electricity generation. It is around 12.7% of the national capacity. Meanwhile, Indonesian government’s current policy concerning the power sector is to promote coal utilization. However, coal power generation faces environmental emission issue. This study examined utilization of geothermal energy for future electricity supply expansion in Java-Madura-Bali (Jamali) system, the largest electricity consumer in Indonesia, by using Long-range Energy Alternatives Planning (LEAP) model from 2006 to 2025. This study uses three scenarios of geothermal utilization to maintain reserve margin of 30%, according to the government plan, in 2025. In the first scenario, it was added with 50 MW of geothermal power plant, in the second scenario 100 MW of geothermal power plant was added, and in the last scenario 124 MW was added to the existing capacity. It was found that in the end of the period, by implementing the first scenario, the geothermal capacity increases by 5.7 GW. In the second and the third scenarios, the estimated increase is 8.2 GW and about 10 GW respectively. It was also found that in 2025 CO2 emission reduction in each scenario were 12.9%, 21.5%, and 25% respectively, compared to the BAU scenario. Additionally, in the end of projection, the costs of each scenario were 6.6 Billion USD, 6.8 Billion USD and 7.1 Billion USD respectively, compared to 6.3 Billion USD in the BAU scenario. By considering externality from power generation, the first, second and third scenarios reduce external costs by 46.3, 71.6 and 80.8 million USD respectively, when compared with the BAU scenario. However, by including the external costs in the total cost, it does not make all geothermal scenarios cheaper than the BAU scenario.