Evaluating feed-in tariff policies on enhancing geothermal development in Indonesia

Andri D. Setiawan, Marmelia P. Dewi, Bramka Arga Jafino, Akhmad Hidayatno

Research output: Contribution to journalArticlepeer-review

Abstract

Geothermal is vital for sustainably meeting Indonesia's energy demand, given its estimated massive reserves potential equivalent to 24 GW of electricity. The Indonesian government has set geothermal contributions to the national energy mix at 7,241.5 MW by 2025 and 17,546 MW by 2050, despite harnessing such vast potential needing significant investment. To that goal, the government established a feed-in tariff (FIT) mechanism to encourage private sector investment in geothermal development. However, FIT has undergone significant alterations in a short period. Moreover, various complicating factors—bureaucracy, social, and technical—exist alongside FIT implementation. Therefore, the extent that FIT can effectively enhance geothermal development in Indonesia should be challenged with further investigation. This study explores the efficacy of FIT policies for geothermal electricity by comparing the performance of several FIT schemes in terms of their impact on the government's target achievement. This study combines the policy analysis framework with system dynamics modeling to understand the dynamic interaction of FIT policy and other important components in geothermal development. The findings show that modest bureaucracy and public support are required. Furthermore, to enhance geothermal development more effectively, FIT should be at least 11 cents US$/kWh and accompanied by technical breakthroughs and government-funded exploration activities.

Original languageEnglish
Article number113164
JournalEnergy Policy
Volume168
DOIs
Publication statusPublished - Sep 2022

Keywords

  • Feed-in tariff
  • Geothermal
  • Indonesia
  • Policy analysis
  • Renewable energy policy
  • System dynamics

Fingerprint

Dive into the research topics of 'Evaluating feed-in tariff policies on enhancing geothermal development in Indonesia'. Together they form a unique fingerprint.

Cite this