Indonesia, home to 240 million people, is the world’s fourth most populous country. It is also home to 40% of the planet’s known geothermal energy potential. Yet only about 4% is currently exploited. The country’s vast and growing energy needs are met primarily by fossil fuels, an important part of why Indonesia is the world’s third largest emitter of greenhouse gases (GHG). Recognizing the threats posed by the effects of climate change, Indonesia has committed itself to significantly reducing its GHG emissions. Nationally legislated energy goals include 17% renewable energy generation by 2025, a 30% improvement in energy efficiency by 2025, and GHG emissions 30% below business as usual forecasts by 2020. Renewable energy sources will account for 60% of the 10,000MW of new energy capacity that Indonesia plans to develop by 2014 to meet growing energy demand. A central feature of all of these goals involves the successful development of Indonesia’s geothermal potential.
...the percent of greenhouse gas emissions that the government has committed to reduce by 2020
Indonesia is tapping US$400 million from the Clean Technology Fund (CTF) to develop approximately 800MW new geothermal generation supply at three sites, and to create risk sharing and finance facilities designed to accelerate investments in energy efficiency and renewable energy. Indonesia’s CTF investment plan was designed under the leadership of the government, in coordination with the Asian Development Bank (ADB), members of the World Bank Group (IBRD, IFC), and key Indonesian stakeholders. The investment plan will mobilize an additional US$2.6 billion in public and private financing to address a number of key barriers inhibiting the scaled-up development of Indonesia’s technically and economically viable renewable energy and energy efficiency potential, and is expected to initiate a transformative shift toward a lower-carbon economy.