BP to develop geothermal energy in Indonesia

Indonesia is an archipelago of more than 17,000 islands and has many volcanoes, which makes it desirable to tap these geothermal sources.

Renewable power also includes production of electricity from water, wind energy and solar power sources.

Indonesia had power-generation capacity of 28,462 MW as of the end of last year, according to PLN data. Coal-powered plants account for around 42.2 percent of that capacity, diesel-fired plants 23.7 percent, natural gas 22 percent, hydropower plants 6.7 percent and geothermal and other renewable energy 5.4 percent.

"BP in talks just now agreed to participate in the development of geothermal energy in Indonesia thus to increase our power capacity," the president was quoted by Antara news wire as saying on Saturday.

President Yudhoyono said the agreement was the result of his talks with BP CEO Bob Dudley at Gedung Agung.

The president said so far geothermal energy in the country has not yet been exploited well despite the fact that the country has the world`s biggest reserves.

He said the energy source has not yet been developed well due to investment challenges.

President Yudhoyono said although incentives had been given the sector has not developed well. He said the oil subsidy had also made the price of geothermal energy not competitive yet.

The president reiterated that geothermal energy is one of the future environmental friendly renewable energy sources.