A Study on Renewable Energy Certificates as Enabling Instruments for Geothermal Energy Advancement
Keywords:
renewable energy certificate, Geothermal Energy, REC Pricing, Energy TransitionAbstract
Indonesia, home to the world’s second-largest geothermal reserves, holds strategic potential to accelerate the clean energy transition through expanded geothermal development. This paper examines the role of Renewable Energy Certificates (RECs) as a market-based instrument to support this agenda. Despite the introduction of geothermal RECs in Indonesia’s voluntary market, their sales performance remains lower than those of hydropower and solar sources. Through a multi-phase analysis—encompassing sales trends, international price benchmarking, techno-economic simulations, and market strategy formulation—this study identifies key barriers and opportunities for improving geothermal REC utilization. Benchmarking indicates that REC prices in Indonesia are among the lowest in Asia, with limited financial impact on geothermal project economics at current levels. However, techno-economic modeling reveals that rising REC prices could significantly enhance project bankability. The study proposes a set of targeted marketing strategies, including RE100 corporate engagement, premium product positioning, and integration with ESG policy frameworks. These strategies aim to ensure full recognition and monetization of geothermal electricity via REC markets. The findings offer actionable insights for PT PLN (Persero) and stakeholders to optimize REC deployment and strengthen geothermal’s role in Indonesia’s renewable energy mix.
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