Financial and community barriers slow geothermal energy development in Southeast Asia
JAKARTA, Indonesia — Providing energy 24 hours a day, using minimal space and considered a clean energy source, geothermal energy appears to be an ideal option for countries like Indonesia and the Philippines, where the potential is high and where governments seek to move away from highly polluting energy sources. fossil fuels.
Yet much of the geothermal energy potential, created by harnessing heat produced by the earth from underground reservoirs of hot water to power turbines that produce electricity, remains untapped in these countries and across the world. world – as financial, regulatory and community barriers have slowed growth. .
More readily available financing and changes in national regulations are beginning to remove these obstacles, but experts say more should be done to unlock the vast source of clean energy trapped just beneath the Earth’s surface.
Countries with high geothermal potential, such as the United States, Indonesia, and the Philippines, are typically located near tectonically active regions where hot water or steam is naturally transported to the Earth’s surface by activity. volcanic or are accessible by shallow boreholes.
“We essentially depend on our own sun, from which we can obtain clean and reliable energy,” said Marit Brommer, CEO of the Germany-based International Geothermal Association.
Experts also praise geothermal power plants for their ability to operate continuously to meet the minimum level of energy demanded 24 hours a day, unaffected by weather conditions, with a long lifespan and minimal maintenance.
As countries move towards renewable and cleaner energy, the use of geothermal energy is expected to grow: in Southeast Asia, geothermal energy production is expected to increase tenfold between 2020 and 2050, to 276 million megawatt hours, according to the International Energy Agency.
With their smoking volcanoes and bubbling lakes, Indonesia and the Philippines – two archipelagic countries in Southeast Asia located on the seismically active “Ring of Fire” – are the second and third largest users of geothermal energy in the world. world, with some of the highest geothermal levels. energy potential. The United States is number one.
Yet Indonesia uses less than a tenth of its gargantuan reserves, which represent 6% of its electricity supply. In the Philippines, about 8% of geothermal capacity is been developedconstituent 14.6% of the country’s energy consumption, the largest source of renewable energy in the country.
Both countries plan to expand the use of geothermal energy as they move away from fossil fuels: Indonesia aims to increase the share of geothermal energy production to at least 8% of by 2030, which would make it the second largest source of renewable energy after hydroelectricity. The Philippine government targets several projects to increase geothermal capacity by adding nearly 1.5 gigawatts, almost doubling its current usage.
But the exploratory phase of geothermal development — when companies conduct testing and drilling to confirm the sites’ size, temperature, pressure and potential production rates — is expensive and risky. This makes it difficult to attract development finance, said Shigeru Yamamura, an energy specialist at the Asian Development Bank.
“This is the hardest part for developers, because (financially) they cannot take on 100% of the exploration risk themselves,” Yamamura told The Associated Press.
Climate finance for geothermal development is limited for most Southeast Asian countries, accounting for just 9% of funding available to the Association of Southeast Asian Nations – a political and economic bloc of ten states in the region, which includes Indonesia and the Philippines.
An ASEAN 2024 energy ratio said “blended financing” using both public and private sources, grants and green bonds could help bridge the gap.
The Philippine government has announced green energy auction systems for geothermal energy and is preparing a “smart green grid plan” that prioritizes renewable energy – vital for allowing private developers to secure financing from banks. This demonstrates progress in political support for investment, Yamamura said.
Indonesian President Prabowo Subianto has focused on geothermal energy as part of the country’s plan. energy transition. The Ministry of Energy and Mineral Resources says it is working to shorten permitting times and study ways to increase rates of return on investment in geothermal projects. The national electricity company, Perusahaan Listrik Negara, also said it was committed to accelerating the development of geothermal energy.
The World Bank provides a $150 million loan to increase Indonesian investment in geothermal energy by reducing the risks of early-stage exploration. The Green Climate Fund and Clean Technology Fund are providing $127.5 million.
Even when funding is secured, community reluctance can slow development.
In Indonesia, village residents have protested the projects, citing safety and environmental concerns: several geothermal sites in Indonesia have experienced deadly gas leaks over the past five years.
Some Indonesian communities don’t understand what geothermal energy is and how they could benefit from its development, said Timothy Ravis, a doctoral student in global development at Cornell University.
Protests over geothermal sites in the Philippines have led at least one company to pay royalties to indigenous groups concerned about land degradation caused by geothermal development.
Governments and companies should work to gain consent from communities near projects to ensure they are successful, Brommer said.
“We need to show that this development benefits everyone, not just one company,” she said. “It’s not about being a good neighbor, it’s about being the best neighbor and really working with communities to respect their concerns.”
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