Indonesia and the Philippines, positioned on the seismically active Ring of Fire, possess significant potential for geothermal energy, yet face numerous obstacles preventing full utilization. Despite high prospects, the journey towards expanding geothermal usage in these nations is fraught with financial and community challenges.
Geothermal energy, derived from harnessing the Earth’s heat from underground reservoirs, remains underutilized in Indonesia and the Philippines despite their recognized potential. These countries, following the United States, rank second and third globally in installed geothermal capacity. Still, only a fraction of their immense reserves is tapped, mainly due to financial, regulatory, and community impediments.
Geothermal power offers reliable, weather-independent energy, crucial as countries shift from fossil fuels. It operates continuously to meet demand and has a long lifespan with minimal maintenance. The International Energy Agency predicts a tenfold increase in Southeast Asia’s geothermal power from 2020 to 2050, reaching 276 million megawatt-hours. However, current usage in Indonesia constitutes only 6% of its power supply, while the Philippines utilizes 14.6% for 8% of its capacity.
The exploratory phase of geothermal projects, involving site tests and preliminary drilling, is costly and risky, deterring investment. Shigeru Yamamura of the Asia Development Bank points out that developers struggle with financial backing for exploration due to the high risks involved. For Southeast Asia, climate finance directed towards geothermal initiatives forms a minor portion of available resources, approximately 9%.
Efforts are underway to alleviate these barriers. The Philippines has introduced green energy auctions and is crafting a smart green grid plan to attract private investment, thereby sending positive signals for policy support. Meanwhile, Indonesia’s government aims to streamline permitting processes and enhance investment returns, with the World Bank and other funds offering significant financial backing to mitigate exploration risks.
Communities present another challenge, often expressing concerns over safety and environmental issues. In Indonesia, protests have emerged from villages wary of these aspects, especially following incidents of gas leaks at geothermal sites. Similarly, in the Philippines, community concerns over land use have led companies to negotiate royalties, particularly with Indigenous groups. According to Marit Brommer from the International Geothermal Association, gaining community consent and ensuring inclusive benefits are imperative for project success.
Despite the significant hurdles, both Indonesia and the Philippines are strategically poised to expand their geothermal energy sectors. With ongoing government initiatives and community engagement, these nations have the opportunity to lead in renewable energy, overcoming both financial and social obstacles.
Source: Apnews
