Pertamina to Expand Geothermal Capacity to Reduce more Emissions by Implementing ESG
November 13, 2021 – Pertamina Geothermal Energy (PGE) has planned to expand its installed capacity from geothermal power plant in order to provide higher contribution to the reduction of greenhouse gas emissions in Indonesia as a support to achieve the sustainable development goals (SDGs) on climate action by implementing Environmental, Social, and Governance (ESG) based programs.
"Our expansive plan will help Indonesia to achieve net zero emission target by 2060," Chief Financial Officer (CFO) Pertamina Geothermal Energy Nelwin Aldriansyah said during a discussion at the UN Global Compact on business ambition for climate action held virtually on late Wednesday (November 10).
The UN Global Compact is a "voluntary initiative based on CEO commitments to implement universal sustainability principles, and take steps to support UN goals".
Pertamina also reiterates the commitment to achieving the SDGs through the implementation of Environmental, Social, and Governance (ESG) based programs in their operational areas.
According to Aldriansyah, PGE is planning to issue its own wind green bonds in the first half of next year (2022) aside from its holding company -- PT. Pertamina’s plan from issuing green bonds in 2022.
"Proceedings of green bonds will be used to refinance our existing conventional loans and also to finance our capex (capital expenditure) plan in developing new geothermal projects in Indonesia," he said.
With such an initiative, he further said, PGE expected to gain an additional 375 megawatts (MW) -- from its current 672 MW -- in installed capacity from its geothermal power plant in the next four years.
"We are aiming to have a total installed capacity to 1,500 megawatts by 2030," Aldriansyah remarked.
He expressed optimism that with such an additional capacity, PGE will contribute significantly to Pertamina's plan to decarbonize its assets and reduce the emissions by 30 percent by 2030.
"At our current capacity, we currently reduce the emissions by about 3.5 million tonnes of carbon dioxide (CO2) per annum. And with the additional capacity, we expect to reduce the emissions further to six million tonnes by the next four years, and to 12 million tonnes by year 2030," he stated.
On the occasion, Aldriansyah also mentioned that the government of Indonesia aims to improve the use of energy mix from renewable energy sources, from the current 12 percent to 23 percent by 2025.
He expressed confidence that the increased use of energy mix will provide an ample room for renewable energy companies, such as Pertamina Geothermal Energy, to expand its installed capacity and provide higher contribution to emission reduction.
The CFO believes the financing plans, including the issuance of green bonds next year, can support the capacity growth in the future which will contribute significantly to Pertamina's objective to decarbonize its asset portfolio.
"It is also aligned with the Indonesian Government's commitment to Paris Agreement and the goal No.13 of sustainable development goals (SDGs) on climate action," Aldriansyah added.**