The Indonesian Government’s decision to provide tax incentives for investment in renewable energy will attract investments in geothermal power this year, according to research and consulting firm Frost & Sullivan.

Frost & Sullivan’s Asia Pacific programme manager for energy and power systems practice, Suchitra Sriram, said in a press statement that Indonesia realised an urgent need to adopt renewable energy technologies to meet its electricity demand of about 7% per year.

According to Indonesia’s Energy and Natural Resources Ministry, 40% of the world’s geothermal potential was located in Indonesia, which is currently utilising only 1,189MW of its 28,543MW geothermal potential.

By 2014, the ministry plans to build 43 geothermal power plants in the country.

Indonesia has also signed a major memorandum of understanding with General Electric for joint development of various renewable energy projects, Suchitra said.