Indonesia’s Pertamina signs agreement with Mubadala Energy to explore geothermal projects

Indonesia aims to add 3.3 gigawatts of installed geothermal capacity by 2030

A floating solar power plant in Purwakarta, West Java province, Indonesia. Reuters

Pertamina Geothermal Energy, a unit of Indonesia's state energy firm Pertamina, has signed an agreement with Chevron and Mubadala Energy to explore geothermal projects in the South-East Asian country.

The agreement provides a “comprehensive” framework to conduct a joint study into developing the Kotamobagu geothermal field in Indonesia’s North Sulawesi province, the companies said in a statement on Tuesday.

The agreement aligns with Indonesia’s target of adding 3.3 gigawatts of installed geothermal capacity by 2030.

Geothermal electricity produced in Kotamobagu may be used to power homes in Indonesia as well as to produce low-carbon hydrogen or ammonia, the companies said.

Mubadala Energy partners with Pertamina Geothermal Energy and Chevron to explore geothermal opportunities in Indonesia. Photo: Mubadala Energy

“With our track record of delivering strategic energy resources in Indonesia for over a decade, we are excited about this partnership,” said Mansoor Al Hamed, chief executive of Mubadala Energy.

“The opportunity to explore such projects is embedded in Mubadala Energy’s commitment to playing an active role in the energy transition as we continue to support Indonesia’s net zero targets,” Mr Al Hamed said.

Indonesia, the largest economy in South-east Asia, is planning to generate at least 51 per cent of its total energy from renewable sources by 2030.

The country also aims to become carbon neutral by 2060 or sooner, with renewable energy providing up to 85 per cent of the energy mix.

Geothermal energy harnesses the heat generated within the Earth’s core to provide a constant energy source, unlike solar or wind, which are intermittent. Geothermal energy plants also have high-capacity factors, meaning they can run at maximum power for longer periods.

“Our joint study agreement this time aims to utilise the complementary strengths of the three parties in developing geothermal in Kotamobagu,” said Julfi Hadi, president director of Pertamina Geothermal Energy.

In July, Mubadala Energy, the oil and gas unit of Abu Dhabi’s Mubadala Investment Company, and Pertamina signed an agreement to explore carbon capture initiatives in the country.

The agreement provided a framework to explore carbon capture, utilisation and storage (CCUS) projects for Pertamina’s and Mubadala Energy’s existing portfolio of assets in Indonesia.

The companies are also expected to look into potential joint investments in upstream projects that seek to use CCUS applications.

Earlier this year, Abu Dhabi’s clean energy company, Masdar, invested in Pertamina Geothermal Energy, marking its entry into the Asian country’s geothermal energy sector.

Chevron’s Indonesia country manager Wahyu Budiarto said the US energy major would use its technical expertise and new technologies to explore renewable energy resources in Indonesia.

Jakarta is gearing up to make an announcement at Cop28 in Dubai about retiring early from coal, even as the country struggles to attract enough private capital for its green transition.