A comparision of the merits of nuclear and geothermal energy in Indonesia

This paper considers the relative merits of nuclear to geothermal power, largely from an economic perspective, but also with references to environmental, social and political issues. Both nuclear and geothermal have the potential to produce large amounts of base electricity, necessitating well-developed grids. Both have very low operation and maintenance costs. But both have very high capital costs, and therefore interest rates have a major impact on their financial viability. The current feed-in tariffs appear to suggest that investing in either is now attractive, but that the tariffs are so high they are likely to increase the cost of electricity (as they are significantly higher than domestic supply and most industrial tariffs). Although over the long term Indonesia may need to invest in both nuclear and geothermal, to meet its increasing demand for electricity, the model suggests that Indonesia should first focus on its geothermal resources. Nevertheless, local opposition to nuclear probably means that geothermal will take precedence, for political rather than, economic reasons. Long-term international investment in nuclear and geothermal will require the generous published feed-in tariffs to remain in force, as Indonesian public finances would be stretched to internally fund all of the necessary development. The remoteness and limited electricity network development in much of eastern Indonesia means that despite generous feed-in tariffs, development of large scale generation schemes will be limited to those initiated by Government, curtailing the community and economic development of some of Indonesia´s most deprived communities.