Study finds next-generation geothermal energy could meet up to 90% of Indonesia’s industrial heat demand and play a central role in meeting national renewable energy targets.
BOSTON, December 2, 2025 /PRNewswire/ — Project InnerSpace today announced the release of The future of geothermal energy in Indonesiaa comprehensive report detailing how, with vast conventional resources and deep national expertise, Indonesia can expand geothermal into next-generation systems, industrial heating and district cooling. This will provide reliable power, competitive energy for industry and data centers, cleaner air for communities, and a world-class domestic supply chain and workforce.
Geothermal energy, the heat naturally found in the Earth’s crust, is an abundant and ubiquitous energy source. Advances in drilling and subsurface technologies are making geothermal affordable and scalable in regions once considered impractical. In Indonesia, this progress is particularly important. Spanning thousands of islands along the Pacific Ring of Fire, Indonesia has one of the richest geothermal resource bases in the world. The report estimates that Indonesia holds 2,160 gigawatts of geothermal technical potentialmuch greater than current estimates of hydrothermal resources. Full realization of this potential would enable geothermal energy to meet 90% of Indonesian industrial heat demand in key manufacturing sectors and significantly reduce the country’s dependence on imported coal and fuels, resulting in the creation of more than 650,000 jobs.
“Indonesia is already a world leader in hydrothermal geothermal energy. The country’s long oil, gas and geothermal heritage now gives it the technical skills, drilling capacity and operational expertise to lead the sector’s next phase: geothermal cooling, process heat and next generation energy,” said Jackson Grimes, director of global engagement at Project InnerSpace. “Our analysis shows that by modernizing geothermal regulations and broadening national focus beyond electricity, Indonesia can unlock thousands of megawatts of low-emissions firm energy, strengthen industrial competitiveness and create hundreds of thousands of skilled jobs, while improving energy security and strengthening social acceptance through clearer benefits for communities.
“Next generation geothermal systems differ in that they do not rely on natural underground reservoirs and therefore can be developed anywhere with adequate underground heat. This addresses one of the main challenges of conventional geothermal energy, namely that resources are often located in protected areas or near residential areas, creating land use conflicts and limiting socio-economic benefits. With next generation technologies, geothermal energy can be deployed where the demand for heat or electricity actually exists, including directly within communities,” said Fabby Tumiwa, CEO of IESR. “By leveraging our oil, gas and geothermal expertise, we can translate this potential into real projects and accelerate cost reductions associated with geothermal energy use.”
Advances in drilling and well construction technologies now allow next-generation geothermal systems to access heat beyond traditional hydrothermal reservoirs, providing reliable electricity, direct-use heat for industry, and district cooling. Expanding Indonesia’s geothermal framework to include these applications would accelerate the deployment of renewable energy, reduce reliance on coal-fired generation, and strengthen the country’s long-term energy resilience.
Key recommendations in The future of geothermal energy in Indonesia include:
- Update geothermal definitions and licensing frameworks to explicitly include next generation systems, direct-use heat and district cooling.
- Setting national targets for geothermal electricity and industrial heat and a path to get there.
- Establish a “geothermal fast lane” to streamline permitting and interdepartmental coordination.
- Reform geothermal production bonuses to ensure communities see real benefits.
- Expand workforce training and technical certification programs to leverage Indonesia’s strong oil and gas expertise for geothermal development.
To build on one of the report’s key findings, namely Indonesia’s significant potential for geothermal cooling, the InnerSpace project will fund a feasibility study at Gadjah Mada University to evaluate a geothermal cooling project on campus. If the study is successful, the InnerSpace Project intends to advance the project through its GeoFund program.
About the InnerSpace project
Project InnerSpace is the leading independent, nonprofit organization dedicated to the global development of geothermal energy. We are a specialist research organization, whose mission is to remove key barriers to the exponential growth and development of geothermal energy worldwide by 2030. To learn more about the InnerSpace project, please visit www.projectinnerspace.org.
About IESR
The Institute for Essential Services Reform (IESR) is an energy and environment think tank. The IESR promotes the transformation to a low-carbon energy system by advocating science-based and data-driven public policy, conducting capacity development assistance, and establishing strategic partnerships with non-governmental actors. To learn more about IESR, please visit https://iesr.or.id/.
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SOURCE InnerSpace Project
