Indonesia targets geothermal non-tax revenue at Rp2.6 trillion in 2026

JAKARTA, 19 AUGUST 2026 —

KUALA LUMPUR/JAKARTA (Aug 19): Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has set a target for non-tax state revenue (PNBP) from geothermal energy to reach Rp2.6 trillion in 2026, up from the projected Rp2.46 trillion in 2025.

Geothermal remains the only renewable energy sector contributing directly to PNBP, underscoring its economic significance in Indonesia’s energy transition strategy.

Sector Growth and Investment Targets Beyond revenue, the ministry aims to attract up to US$1.1 billion in geothermal investments in 2026 alone. Eniya noted that future auctions could further boost investment to US$2.2 billion, equivalent to approximately Rp39 trillion, pending new project tenders.

During IIGCE 2026, the government officially awarded geothermal permits to state utility PT PLN (Persero) for the Mount Ungaran Working Area (WKP) and to PT Telaga Rano Geothermal for the Telaga Ranu WKP. Five WKPs and seven Preliminary Survey and Exploration Assignment Areas (WPSPE) are slated for tender in 2026.

The five WKPs on offer include Danau Ranau, Hamiding, Songgoriti, Oka Ile Ange, and Gunung Sirung, with estimated reserves of 304 MW and planned capacities totaling 145 MW. Breakdown of planned capacities is as follows: Danau Ranau (40 MW), Hamiding (50 MW), Songgoriti (40 MW), Oka Ile Ange (10 MW), and Gunung Sirung (5 MW).

Meanwhile, the seven WPSPE areas—spanning Talamau and Simisiuh in West Sumatra, Srirejo in Lampung, Lili Seporaki in West Sulawesi, Maranda Kawende in Central Sulawesi, Massepe Sulili in South Sulawesi, and Banda Baru in Maluku—hold total resources of 321 MW, with probable reserves estimated at 247 MW.

Malaysia Market Implications While Indonesia advances its geothermal agenda, Malaysia’s energy sector may observe strategic implications. As a regional peer in Southeast Asia’s renewable energy push, Malaysia could assess Indonesia’s policy framework, investment climate, and auction mechanisms as potential benchmarks for accelerating its own geothermal development.

Indonesia’s aggressive expansion in geothermal—backed by state incentives and private participation—may also influence cross-border energy investment flows, particularly from Malaysian firms eyeing regional diversification in clean energy assets.

Sector and Company Highlights State-owned PLN, already a key player in Indonesia’s geothermal sector, has secured its second WKP this year, reinforcing its role in national energy security. PT Telaga Rano Geothermal, a private developer, has likewise entered the sector through the Telaga Ranu award.

The government’s phased auction strategy—combining mature WKPs with early-stage WPSPEs—reflects a balanced approach to de-risking exploration while ensuring near-term capacity additions. The inclusion of smaller-scale projects (e.g., 5 MW at Gunung Sirung) suggests a focus on distributed geothermal development, potentially lowering entry barriers for independent power producers.

Outlook and Challenges Indonesia’s geothermal sector is poised for growth, driven by policy support, rising global demand for clean baseload energy, and declining technology costs. However, challenges remain, including high upfront exploration risks, land acquisition hurdles, and grid integration constraints in remote regions.

The ministry’s dual targets—Rp2.6 trillion in PNBP and US$1.1 billion in investments for 2026—signal strong confidence in the sector’s economic viability. Success will depend on efficient project execution, transparent auction processes, and sustained investor confidence.

Related: Jakarta