Rethinking geothermal energy: Between climate solution and socio-environmental risk

This report by Trend Asia examines the socio-environmental impacts of geothermal energy expansion in Indonesia, arguing that financial models supported by international financial institutions (IFIs) like the World Bank and Asian Development Bank (ADB) prioritize corporate de-risking over the rights and livelihoods of local and Indigenous communities.

• International financial institutions have provided substantial funding to expand Indonesia's geothermal capacity. The World Bank approved a $325m loan for the Geothermal Resource Risk Mitigation Project (GRRMP) in 2019, supplemented by $127.5m in grants from the Clean Technology Fund (CTF) and $150m from the Indonesian government. The ADB provided a $300m loan in 2020 to PT Geo Dipa Energi (GDE) for capacity expansion in Java, a further $180m loan in 2025 for two 55MW plants in Java, and a $92.6m agreement in 2025 with Supreme Energy Muara Laboh (SEML) for a facility in West Sumatra.
• Geothermal operations cause significant water depletion and pollution. Producing one megawatt of power consumes between 6,500 and 15,000 litres of water. At the 35MW Ijen plant in East Java, daily use reaches 6.5 million litres, causing local springs in Watu Capil, Margahayu, and Kebun Jeruk to become cloudy and bitter. In Dieng, Central Java, fracking has introduced arsenic and boron into streams, while in North Sulawesi, the Lahendong plant has damaged Lake Linow, evidenced by the loss of bio-indicator insects known as sayok and komo.
• Drilling activities have led to dangerous mudflows and gas leaks. Blowouts of 15 to 30 metres occurred in Mataloko, East Nusa Tenggara in 1998, and similar incidents were recorded at the Ijen plant in 2020. In Sorik Marapi, North Sumatra, a 2022 incident involved blowouts and hydrogen sulfide (H₂S) gas erupting up to 30 metres. Since 2021, H₂S leaks at Sorik Marapi caused five women's deaths in January 2021 and affected over 150 residents across several months in 2022.
• Geothermal development causes severe economic losses for agricultural communities. In Wae Sano, Sakoria, and Ulumbu (East Nusa Tenggara), projected losses to farmer income reach IDR 470bn (approx. $27.56m). Total economic losses in the first two years of operation are estimated at IDR 1.1tn (approx. $64.5m) due to declines in agriculture, forestry, and fisheries. The water required for 1MWe of geothermal electricity equals the water needed for 59 corn growing seasons.
• The expansion of geothermal energy threatens Indigenous cultural heritage and sacred sites. In Atadei, East Nusa Tenggara, odors from wells interfere with the Tun Kwar (grilled corn) ritual. On Mount Rajabasa in Lampung, exploration threatens a protected forest used as an ancestral shelter for the Saibatin Paksipak Sekala Brak Customary Kingdom. In Poco Leok, Flores, the Ulumbu plant expansion is opposed because drilling sites risk desecrating sacred springs and ancestors' graves.
• Resistance to geothermal projects is met with criminalization and state violence. Under Law No. 21 of 2014, individuals obstructing exploration can face up to seven years in prison and fines of IDR 70bn. In Mount Gede, community members from 15 villages facing legal charges for opposing a project that affects four major watersheds (Citarum, Cimandiri, Cisadane, and Ciliwung). In Poco Leok, the state electricity team (PLN) was escorted by armed police and soldiers, leading to arbitrary arrests and clashes.

APA

Triasdian, B. (2026). Rethinking geothermal energy: Between climate solution and socio-environmental risk. Trend Asia. https://trendasia.org/wp-content/uploads/2026/06/Geothermal_Indonesia_Banking-on-Renewables_April-2026.pdf

Chicago

Triasdian, Beyrra. Rethinking geothermal energy: Between climate solution and socio-environmental risk. Trend Asia, 2026. https://trendasia.org/wp-content/uploads/2026/06/Geothermal_Indonesia_Banking-on-Renewables_April-2026.pdf.

Wikipedia

{{cite report |last1=Triasdian |first1=Beyrra |title=Rethinking geothermal energy: Between climate solution and socio-environmental risk |publisher=Trend Asia |date=April 2026 |url=https://trendasia.org/wp-content/uploads/2026/06/Geothermal_Indonesia_Banking-on-Renewables_April-2026.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{triasdian2026rethinking, author = {Triasdian, Beyrra}, title = {{Rethinking geothermal energy: Between climate solution and socio-environmental risk}}, institution = {Trend Asia}, year = {2026}, month = apr, url = {https://trendasia.org/wp-content/uploads/2026/06/Geothermal_Indonesia_Banking-on-Renewables_April-2026.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }