Indonesia's Geothermal Potential Remains Untapped

Titania Veda, Jakarta Globe 22 Apr 10;

Garut, West Java. Beneath Darajat Mountain lies the village of Sirnasari. The bread and butter of this community of 8,500 people is jacket-making and other cottage industries. But frequent blackouts, due to infrastructure problems such as decaying or falling transmission poles, cause production delays that affect these small entrepreneurs’ profit margins.

“When there’s a blackout, we really feel it because we can’t produce at work. And then we can’t pay our electricity bills and our electricity at home gets cut off,” said Tati, a housewife whose husband makes jackets.

Energy experts mockingly refer to Indonesia’s current energy woes, complete with blackouts and shortages, as the “dark ages.” The country has been beset by power outages as infrastructure has failed to keep pace with growth. The existing generating capacity is 30,500 megawatts, a power deficit of 4,555 MW, according to data released by state-owned power company PT Perusahaan Listrik Negara in January. Analysts say the shortages have hurt industry and deterred investment.

Untapped Solution

With the government’s “fast-track” program to create a new power supply still in the works, the central government is increasingly touting geothermal power as a clean, renewable and environmentally friendly energy source. Located within the Pacific Ring of Fire, the most seismically active place on earth, Indonesia has the world’s largest geothermal energy reserves.

The fast-track program’s second phase, estimated to cost $12 billion and targeted for completion in 2014, mandates that around 4,000 MW of electricity come from geothermal power plants.

The Energy Ministry hopes to attract the needed billions from global investors at the 2010 World Geothermal Congress & Exhibition beginning on Sunday in Bali. A key geothermal event, the congress is expected to attract around 2,500 technical experts, officials and investors from 80 countries.

Geothermal energy could conceivably power the entire archipelago, but it has barely been tapped. Currently, just 1,189 MW of geothermal power are being produced in 15 plants in Java and Bali — only 4.2 percent of the country’s potential capacity. The Ministry of Energy and Mineral Resources says the country may have enough geothermal reserves to produce up to 27,170 MW in 265 locations including Sumatra and Sulawesi.

If that’s not enough to convince decision-makers to embrace geothermal, there are additional cash benefits. Using geothermal power instead of coal-fired power plants could enable operators to sell carbon credits because the plants are low-emitters. According to Energy Ministry data, Indonesia could earn up to $477 million by 2014 in carbon credits generated from low-emission geothermal projects alone.

It remains to be seen how long it will take before Indonesia becomes a geothermal power. The village of Sirnasari, for example, lies in a valley at the foot of Darajat Mountain, some 10 kilometers below a geothermal power plant run by a local unit of US energy giant Chevron. Regardless, it has its share of power blackouts.

According to Chevron spokesman Usman Slamet, Chevron is contracted by state electricity utility PLN to supply 259 MW of power from the Darajat plant, which lies around 2,000 meters above sea level, directly to the Java-Madura-Bali electricity grid. Electricity for Sirnasari, therefore, comes via PLN and not the mountains.

‘Poisoned Steam’

Aside from the complaints from local villagers around the district of Garut about the blackouts, the central and local government faces another problem: widespread misinformation and ignorance about geothermal energy.

“People I speak to think it’s related to Lapindo,” said Erfan Hutagaol, head of the Energy Ministry’s geothermal business effort section, referring to the mudflow disaster in East Java. “And there are those who are already using geothermal for tourism purposes, such as natural hot springs. And they’re afraid the hot springs will disappear if we develop geothermal energy.”

One a recent day in Pasirwangi, a subdistrict of Garut, a local farmer named Amat was off-loading sacks of potatoes from a truck. In the distance, beyond the potato and vegetable fields, white puffs of steam from the Chevron plant rose above the mountains.

Amat, a lifelong resident of Pasirwangi, has lived in the area before and after Chevron signed its geothermal contract in 1984. Although he lives and works only about 5 kilometers from the plant, Amat admitted that he doesn’t know what geothermal is or how it works. He said he sticks to his potato and vegetable farming, although he’s been facing problems with low crop yields. Now 40 years old, he said that life as a farmer was better prior to Chevron’s arrival.

“Farmers complain that their crops get viruses from the steam,” Amat said.

Ibang Lukmanurdin, program manager for the Pasundan Peasants Union (SPP) in Garut, added, “Numerous farmers and laborers claim the land is being polluted by the steam. We have engineers who can exploit solar energy and bio-gas... so leave the [geothermal] wealth alone.”

“There is poison in the steam. You can smell it,” said Asep, 25, a farm hand in Pasirwangi, referring to the noticeable smell of sulfur in the air.

However, Ryad Chairil, an energy analyst with the Center for Indonesian Energy and Resources Law, denied that steam originating from geothermal plants, not to mention the earth, contained harmful poisons.

“The steam is derived from the bottom of the earth. If it contained poison, then the land surrounding it would be unhealthy. If the land can grow grass or rice, it means the land is basically healthy and the steam has no effect,” he said.

As for the foul smell, Chairil said, “The smell of sulfur is like a fart. It will not affect the land.”

Hadian Hendracahya, a program staffer at the Association for the Advancement of Small Businesses in Bandung (Pupuk), who does community development work in Garut district, also rejected claims that geothermal steam is making the land barren.

“Logically, it doesn’t make sense,” he said. A rice farmer himself, Hadian said the farmers weren’t considering that their lands could be yielding less due to over-cultivation or the excessive application of harmful chemical pesticides.

Greener Option

While officials from the energy minister and energy experts concede that any resource development project will have an environmental impact, they insist that environmental damage from geothermal is minimal compared to oil, gas and coal production. They also said that geothermal projects use less land: on average, a plant producing 200 Megawatts covers 37 hectares, while an open pit coal mine requires the clearing of hundreds of hectares of land.

That said, there are still environmental concerns about geothermal energy. An estimated 42 percent of Indonesia’s potential geothermal reserves are located within protected or conservation forests, the latter of which is off limits to geothermal production according to 1999 forestry law. The law does allow geothermal plants in production forests as well as protected forests.

The Ministry of Forestry is preparing a new draft law that would allow the drilling of geothermal wells in conservation forests as it seeks to boost electricity generation.

But that may only further anger local populations if they don’t understand how geothermal production works, or think it’s destroying their local environments, Hadian said. Out of the dozen farmers and villagers in Garut’s Pasirwangi and Samarang subdistricts who spoke to the Jakarta Globe, only one understood the definition of geothermal energy and its potential benefits.

“I know that geothermal is an energy that is kept inside the earth, and if managed well, it can be used for future energy,” said Rian Herdiana, a 20-year-old villager from Sirnasari who received entrepreneurial training from Chevron as part of its community development program.

PLN, the Energy Ministry and Chevron insist that they run education campaigns for the public about geothermal energy, including school visits in Garut and open tours of the plant.

“There’s always a communication gap between everyone. The local government is the one responsible for disseminating information to the villagers,” Chairil said.

But villagers don’t seem too perturbed by their lack of understanding, mostly because their main concern is their livelihoods. In fact, the main gripe that residents of Garut’s subdistricts have about the Chevron plant is that the company hires workers from outside the area.

“There has been no progress in the area because it’s very difficult to place our local people in the company. These days, the application process is difficult and you need money to bribe people to get a job there,” Amat said.

Multinational corporations such as Chevron are often accused of discriminatory hiring practices.

However, Usman countered that between 85 and 90 percent of the 400 staff at the Chevron plant is from Garut district.

That said, geothermal projects also require skilled workers and many Pasirwangi residents such as Asep don’t go beyond primary school. He said he’s been working as a farm laborer since he was 13 years old.

“The problem is each village wants a monopoly, so it’s understandable that people will say only a small section from their village work in Darajat,” Usman said.

Meanwhile, other young villagers such as Rian are pinning their hopes on geothermal giants like Chevron to help their villages progress in other ways.

“I hope Chevron can come up with the technology so there are no more increases in the basic electricity tariff and no more electrical disturbances here,” Rian said.