Indonesia’s geothermal capacity to reach about 3.5GW by 2030

It will remain as the largest geothermal market, according to Fitch Solutions.

Indonesia’s geothermal capacity is expected to increase by 1.3 gigawatts (GW) reaching just below 3.5GW by 2030, remaining as the largest geothermal market globally, according to Fitch Solutions.

Indonesia, along with fifth largest geothermal market Kenya, was identified by Fitch Solutions as outperformers in the sector, meaning the markets that “have a significant capacity base installed, and/or will register substantial growth in capacity over our 10-year forecast period to 2030.”

"We expect geothermal to be the main driver of Indonesia's non-hydro renewables growth, accounting for approximately 48% of Indonesia’s total renewables capacity and 57% of Indonesia’s total renewables electricity generation by 2030," it said.

Fitch noted that increasing the geothermal capacity is a key priority for the Indonesian government due to “vast potential” for geothermal power generation in the country, estimated at around 28GW.

It noted that the government targets to bring geothermal power capacity in the country to 7GW by 2030 and there are policies implemented to help reach the target such as offering feed-in tariff to geothermal developers, declassification of geothermal exploration as a mining activity, allowing geothermal development in protected forests and conservation areas, and higher government spending.

Indonesia’s Ministry of Finance has crafted a government geothermal drilling programme that aims to mitigate the risks of geothermal exploration and encourage more investments into the sector, Fitch Solutions said.