25 April 2018| Articles
Flores, an Indonesian island named for its beautiful flora, is the test-bed of a newly adapted classification guidelines for geothermal projects. Called the ‘UNFC Geothermal Specifications,’ this United Nations’ adapted resource classification system is for the first time being piloted on the small island with the support of IRENA, the International Geothermal Association (IGA) and the World Bank.
Committed to improving socio-economic conditions through stable and reliable energy access, some countries with the right geothermal resources are pursuing geothermal energy. Challenging this pursuit, however, has been the struggle to attract financing — showing that to succeed a geothermal project needs to be more than just technically possible.
“Tapping into geothermal energy is about more than just steam,” says Abdulmalik Oricha Ali, an IRENA programme officer helping to coordinate the new geothermal assessment pilot schemes. “Geothermal energy can only benefit anyone if it’s economically competitive, and for that investors need both technical and socio-economic assessments,” Ali adds. In Indonesia, the UNFC Geothermal Specifications can be used by authorities to promote clarity to potential investors on geothermal prospects.
The UNFC system holistically encompasses the management of socio-economical, technological and uncertainty aspects of energy and mineral projects. Using the classification system’s project maturity and resource progression model, investors can identify projects to match their preferred risk profile, reduce exposure to potential costly failures and protect their investments.
From 20 to 23 of March, 2018, IRENA and partners from the IGA and World Bank shared with Indonesian government officials and geothermal project investors how the UNFC system can help classify Flores’s numerous geothermal fields — acknowledging the difference between technical feasibility and economic viability.
It is estimated that across Indonesia’s 17,000 islands there could be as much as 29.5 gigawatts (GW) theoretical geothermal potential, and the country has set in motion plans to harness it. In 2017, Indonesia had almost 2 GW of installed geothermal capacity, and during September’s High-Level Conference of the Global Geothermal Alliance, Indonesia’s Ministry of Energy and Mineral Resources outlined how the country intends to become the world’s biggest producer of geothermal energy by 2021.
“By 2025 we plan to have over 7 GW of geothermal capacity,” said Pak Sanusi Satar, Vice Chairman of the Indonesian Geothermal Association, describing his country’s geothermal ambitions. INAGA representatives attended the Flores workshop and were presented with an overview of the initiative’s objectives — joining in group work to classify a subset of Flores’s projects.
“This workshop has been useful to us because in our standards we’ve been focusing on just the technical aspects of geothermal projects, but in the UNFC we include it all — the social, economic, financial, and geological aspects. I find them interesting and useful and hope we can apply classification,” Satar says. The sessions provided hands-on training to empower the Indonesian authorities to continue the work themselves to classify projects in the rest of Indonesia.
“For us this session was very much needed,” says Pak Dikdik Risdianto, a geologist with the Indonesian Geological Agency. “Our work has only looked at exploration without feasibility or economic considerations, but after this UNFC course, we’ve realised we need to look beyond just resources and think about economics.”
Though the initial feedback from the workshop in Indonesia has been overwhelmingly positive, the work for the IRENA team working on the initiative, has just begun. IRENA and its partners plan to continue to pilot the classification system in different countries and across continents to optimise it for different needs globally.