Indonesia’s geothermal power offers H2 opportunities

Steady power supply from Indonesia's abundant geothermal resources could yield impressively low levelised hydrogen production costs, writes Akansha Victor

Indonesia has high hopes for turning stable power supply from geothermal energy into hydrogen, although capacity expansions could prove challenging and widespread hydrogen adoption might need more policy thrust.

With its prodigious volcanic activity, Indonesia is keen to leverage geothermal energy, state-owned energy firm Pertamina Geothermal Energy's (PGE) director, Julfi Hadi, said at a webinar organised by media outlet DE TV last week. The country already has the world's second-largest geothermal capacity, at around 2.4GW, trailing only the US. PGE is planning to add another 1GW in the next two years, some of which will be used for hydrogen production, especially in West Java, North Sumatra and North Sulawesi, Hadi said.

Geothermal energy provides a constant power supply, unlike intermittent solar photovoltaic (PV) and wind resources. This means that electrolysis plants can achieve much higher load factors — something that should push down levelised costs of hydrogen production.

PGE is planning to start small, however. A pilot project in Ulubelu will initially produce just over 100 kg/d, or less than 40 t/yr, from 300kW of geothermal power. PGE has launched a tender for engineering, procurement and construction services and has brought carmaker Toyota on board as an offtaker for the hydrogen.

In the future, PGE hopes to produce as much as 110,000 t/yr from geothermal energy, Hadi said. But future prospects will depend on the extent to which PGE or other companies can navigate challenges around expanding capacity. Indonesia's geothermal potential stands at over 23GW, so it is currently utilising just over 10pc of this, Hadi said. By 2035, installed capacity could climb above 9GW, he added, but this would still be less than half the country's overall potential. Exploration risks and limited access to funding for developers could make it difficult to build out the capacity more quickly, Hadi noted. Most of the geothermal potential is in remote mountainous areas with limited connectivity to major cities, Hadi noted. This could make delivering geothermal power — and potentially the molecules made from it — difficult and costly.

Fuelling development

More fundamentally, future hydrogen production from geothermal power will also depend on the adoption of renewable hydrogen as a fuel or feedstock.

At last week's webinar, industry participants urged more decisive government support for the sector. In its hydrogen strategy from last year, Jakarta outlined possible mechanisms to make clean hydrogen more competitive, such as expanding its carbon market, but it has made no firm commitments yet.

The government needs to provide "friendly" policies for hydrogen investments and should resolve "regulatory and licensing obstacles", state-owned firm PLN Indonesia Power's vice-president of asset management, Dwi Handoyo, said. PLN already produces small amounts of renewable hydrogen, primarily for cooling power generators. Going forward, it aims to use renewable hydrogen and ammonia for co-firing at its gas-fired power plants (see table). It has also signed a deal to supply renewable hydrogen to state-owned fertiliser firm Pupuk Indonesia and has an agreement for 100,000 t/yr of exports to Singapore with energy firm Sembcorp.

Hadi also called for support measures, such as corporate tax relief or grants, or the transfer of subsidies from fossil fuel projects to renewable hydrogen ventures.

Road transport could be an early use case for renewable hydrogen and PLN opened Indonesia's first renewable hydrogen refuelling station in February. But Jakarta needs to encourage uptake of fuel cell vehicles to spur on the industry, PT Toyota Motor Manufacturing Indonesia's director, Koko Widjanarko, said.