Indonesia Geothermal Energy Market - Growth, Trends, and Forecasts (2023-2028)

The Indonesia Geothermal Energy Market is expected to grow at a CAGR of around 5.5% during the forecast period.

The market was negatively impacted by COVID-19. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the long term, the primary driver for the market includes the government's efforts to reduce the dependency on fossil fuels and thereby reduce CO2 emissions in the country. Increasing demand for electricity is likely to drive the market during the forecast period.
• On the other hand, the higher cost associated with geothermal energy compared to fossil fuel-based power generation, along with increasing competition for alternative renewable energy sources such as solar and wind, is expected to hinder the market growth during the forecast period.
• Nevertheless, with an estimated population of 296 million and an increased urbanization rate of 71% by 2030, electricity demand is expected to grow. The Indonesian government's effort to reduce CO2 emissions by 29% by 2030 is most likely to have growth in renewable energy to meet the increasing electricity demand, which is expected to create an opportunity for the geothermal market to grow in the near future.

Indonesia Geothermal Energy Market Trends

Increasing Demand for Electricity is Likely to Drive the Market

• Electricity demand in Indonesia is growing over the years with the increasing population and urbanization. In 2021, the electricity consumption in Indonesia accounted for 168.38 Million BOE (Barrel Oil Equivalent).
• In 2021, the total electricity consumption of the household sector in Indonesia was nearly 70,289 Thousand BOE. Households consumed the highest percentage of electricity, with almost 41.7% of the total electricity consumed.
• It is estimated that the household electricity demand in Indonesia is likely to increase to 350 TWh. In comparison, demand in the industrial and commercial sectors is expected to increase to nearly 80 TWh and 70 TWh, respectively.
• The use of electronic appliances in the household sector is expected to be the significant driver for the increase in electricity consumption. In contrast, the metal, chemical, food, and textile industries are expected to be the major driver for industrial electricity consumption.
• With an increase in population, the number of Indonesian households is likely to increase to nearly 80 million by 2050, which is expected to increase electricity consumption in the upcoming years. With government initiatives to increase the share of renewable energy in the country’s total electricity generation, geothermal energy as a possible electricity source is likely to grow during the forecast period.

Upcoming Coal Fired Power Plant is Likely to Restrict the Market Growth

• In 2021, Indonesia's power plant installed capacity increased to nearly 74,532.94 MW, which was around 72,750.73 MW compared to the capacity in 2020. The power plant installed capacity in 2021 was dominated mainly by steam power plants, with a total of 51.8 % approximately.
• In 2021, primary energy consumption by fuel accounted for 8.31 Exajoules, which got generated from 39% coal, 16% natural gas, 34% oil, and 7.5% renewables.
• The country has a high reliance on coal-based power plants; thus, the plans to build new coal power plants with existing coal power plants in operation. In 2021, energy consumption by coal accounted for 87.82 Million BOE (Barrel Oil Equivalent).
• In November 2022, the Indonesian government permitted the building of new coal plants that have already been bid out and have a total capacity of 13 gigawatts. The country's 10-year energy plan for 2021-2030 lays out the strategy. Importantly, legislation signed into law by President Joko Widodo in 2022 permits the construction of 'captive coal plants.'
• Increasing the capacity of coal-fired power plants is expected to have a significant share in the electricity generation mix. It is thus likely to meet the maximum percentage of rising electricity demand during the forecast period, which is expected to slow down the growth of geothermal energy and other renewable sources in the country.

Indonesia Geothermal Energy Market Competitor Analysis

The Indonesia Geothermal Energy Market is moderately consolidated. Some of the key players in the market (not in particular order) include Enal SpA, Toshiba Energy Systems & Solutions Corporation, BCPG Public Company Limited, PT Supreme Energy, and Sarulla Operations Ltd.

Additional benefits of purchasing the report:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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