Collaborating with Indonesia on clean energy

Indonesia was New Zealand’s seventh largest export market for the year ending June 2009 and for the same period trade between the two countries was worth over US$1.5 billion (free on board value).

Indonesia is New Zealand’s largest trading partner in ASEAN.

Complementary markets

The New Zealand and Indonesian markets are complementary and largely non-competitive. New Zealand primarily imports petroleum products and some manufactured goods from Indonesia; in return, Indonesian consumers enjoy New Zealand primary produce, such as beef and dairy products.

In many cases, New Zealand provides the raw materials for Indonesian manufacturers of, for example, confectionery, processed dairy products and meat dishes.

New Zealand companies are also exploring the potential for substantial investments and partnerships between the two countries in other sectors such as agriculture, education and healthcare, while Indonesian companies are showing an increasing interest in investing in New Zealand.

Clean energy development holds the potential to be another viable sector for an investment partnership between the two nations.

New Zealand sits in the southern Pacific Ocean, while Indonesia lies in the tropics: both countries have considerably different environments.

We share, however, one important geographical aspect: both of us are situated on the Pacific Ring of Fire, among the world’s most active
volcanic zones.

We are thus both blessed with abundant geothermal energy resources.

Indonesia has an enormous amount to gain from exploiting geothermal power. By some estimates, Indonesia has the world’s largest geothermal power development potential, at around 28,100MW.

Currently approximately 1100MW of this is being utilised, with plans to develop another 3000MW in the next four years.

New Zealand began developing geothermal power in the 1950s, and currently enjoys geothermal generation of around 800MW.

With a strong national commitment to sustainable energy, there are plans to increase this to around 2000MW by 2020.

In New Zealand, geothermal energy is currently the second-most used renewable fuel for electricity generation, after hydropower.

And with government’s aim to generate 90 percent of its electricity requirements from renewable sources by 2025, research, exploration and infrastructure investments into geothermal energy development in New Zealand are expected to rise further.

New Zealand remains at the forefront of aspects of geothermal research and development. 

For example, scientists at the Institute of Geological and Nuclear Science are developing three dimensional modelling technology that will allow geologists to precisely model geothermal resources underground.

New Zealand has the largest single direct use application for industrial purposes at a large pulp plant in Kawerau, near the centre of New Zealand’s North Island, with forest products being one of New Zealand’s primary industries.