Lessons from Indonesia: Mobilizing Investment in Geothermal Energy

Indonesia possesses the world's largest geothermal potential at 27 GW, yet less than 5 percent has been developed. Investment was historically hindered by regulatory frameworks favoring coal, high exploration risks, and pricing distortions. To counter this, the Indonesian government passed a law in 2003 targeting 6,000MW by 2020, established a geothermal exploration fund in 2011 to share risk, and implemented a regional feed-in-tariff. While the country is unlikely to meet its original targets, these 'readiness' activities, supported by international partners, are intended to create a stable environment for scaled-up investment.

• Indonesia has an estimated geothermal power potential of 27 GW, the largest in the world, but has developed less than 5 percent of this capacity to date.
• Investment in geothermal energy was historically suppressed by a regulatory environment that preferred coal-fired power and the high financial risks associated with site exploration.
• The Indonesian government implemented several policy measures to attract investment, including a 2003 law setting a 6,000MW capacity target for 2020, a 2011 exploration fund to reduce developer risk, and a regional feed-in-tariff to address pricing distortions.
• Future geothermal development in Indonesia must balance investment attraction with transparent governance and environmental and social safeguards, as much of the potential is located in forests inhabited by indigenous people.

APA

World Resources Institute (2013). Lessons from Indonesia: Mobilizing Investment in Geothermal Energy. https://www.wri.org/insights/lessons-indonesia-mobilizing-investment-geothermal-energy

Chicago

World Resources Institute. Lessons from Indonesia: Mobilizing Investment in Geothermal Energy. 2013. https://www.wri.org/insights/lessons-indonesia-mobilizing-investment-geothermal-energy.

Wikipedia

{{cite report |author=World Resources Institute |title=Lessons from Indonesia: Mobilizing Investment in Geothermal Energy |date=26 June 2013 |url=https://www.wri.org/insights/lessons-indonesia-mobilizing-investment-geothermal-energy |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2013lessons, author = {{World Resources Institute}}, title = {{Lessons from Indonesia: Mobilizing Investment in Geothermal Energy}}, institution = {World Resources Institute}, year = {2013}, month = jun, url = {https://www.wri.org/insights/lessons-indonesia-mobilizing-investment-geothermal-energy}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }