The Indonesian government recently announced plans to develop a hot new energy resource — real hot. The country’s leaders aim to generate 4,000 megawatts of geothermal energy from volcanoes by the year 2014. If the plan proves successful, the renewable energy generated would decrease the country’s reliance on coal-fired power plants, reduce its greenhouse gas emissions, and help provide power to the 35 percent of Indonesia’s population who currently live without electricity.
Indonesia is really the perfect place to develop large-scale geothermal projects: the archipelago’s 17,000 islands hold hundreds of volcanoes, and all that heat could be converted to renewable electricity. But while the country holds about 40 percent of the world’s geothermal energy potential, it currently lags behind countries like the US and the Philippines in developing the technology.
Geothermal’s main limiting factor is its high upfront cost. Geothermal plants cost about twice as much as coal-fired power plants, and establishing enough plants to add 4,000 megawatts of energy will cost about $12 billion. Still, if developers can raise the dough, producing electricity from geothermal energy has lower overhead costs and causes far less pollution than coal plants.
Leaders plan to seek the funds to develop more geothermal plants from private investors, the World Bank, the US and Japan.