Indonesia will likely lure more investments in geothermal power this year following the government’s announcement of tax incentives for renewable energy, research and consulting investors, research firm Frost & Sullivan says.
Frost & Sullivan’s Asia Pacific energy and power practice program manager Suchitra Sriram said Indonesia seemed to have realized the urgent need to adopt renewable energy technologies to meet its electricity demand growth rate of about 7 percent per year.
“The Indonesian government is therefore offering tax incentives for renewable energy project developers. They have also signed a major memorandum of understanding with General Electric for several joint renewable energy development projects,” she said in a press statement on Wednesday.
In terms of industry specifics, Sriram reported, geothermal power generation would continue to attract more investments, but the market growth rate was expected to be moderate between 8 percent and 10 percent due to the slow pace of development.
About 40 percent of the world’s geothermal potential is located in Indonesia, according to Energy and Natural Resources Ministry’s new and renewable energy and energy conservation director general Luluk Sumiarso.
“Indonesia’s geothermal potential is about 28,543 Megawatts, but only 1,189 megawatts is currently being utilized,” he said in a press release available on the ministry’s website.
The ministry announced it would build 43 geothermal-fired power plants by 2014.
