Indonesia is one of the world’s largest emitters of greenhouse gases, so achieving its Paris climate accord commitment to reduce emissions by 29% before 2030 requires a huge shift to renewables. Fortunately, its volcanic geology provides enormous geothermal potential – about 40% of the world’s reserves. At present, just under 8% of Indonesia’s electricity comes from geothermal power.
There are challenges to successfully tapping geothermal energy. Finding the right location can be a costly and volatile process.
Indonesian power producer Supreme Energy’s search for a suitable location took it to Rantau Dedap in the Muara Enim regency and Pagar Alam city administrative area, a region of South Sumatra inhabited by fewer than 10,000 people.
Due to open in 2020, the geothermal power plant is expected to generate more than 90MW of electricity, enough for up to 130,000 households across the region, and to reduce CO2 emissions by more than 400,000t each year.
The nearest settlement is the small village of Tunggul Bute, home to the Semendo people whose livelihoods rely on agriculture, mainly growing rice and Robusta coffee, an essential component of traditional espresso blends consumed throughout the US, western Europe and Japan.
Until recently, the full value of coffee crops rarely reached the farmers’ pockets because the sole connection to the outside world was an unpaved road, accessible only by horse or motorcycle. Farmers had to split the income with local hauliers, on whom they depended to move the coffee for export.
A stronger, more resilient community
Before construction of the geothermal plant could begin, the main road serving the village was paved, enabling farmers to access the national market directly.
The result is that their coffee is now available throughout Indonesia. Locals benefited financially from voluntarily selling pockets of land – totalling 125ha – to Supreme Energy. Farmers used the money paid to them to buy secure titles to land, enabling them to continue and expand coffee growing as their primary livelihood.
The money also enabled farmers to invest in new equipment for grinding and packaging coffee so they could sell their product for a higher price. When supplemented with advanced training in coffee growing (stem grafting) techniques, coffee processing and marketing access, over one year, the community saw coffee yields double and higher market prices achieved for raw and processed products.
Through our in-depth understanding of the project and its setting, we provided recommendations to the plant developer and reviewed the programme of skills training and community engagement, which prioritised crop diversification – planting fruit and vegetables with a short harvest period – to reduce the farmers’ reliance on coffee as their primary source of income.
Navigating the purchase of land needed for this expansion was not easy. The Semendo community is traditionally based on a matrilineal kinship system, in which women play a central role. Land is often the only inheritance passed down to the next generation, usually to the family’s eldest daughter.
Through regular meetings with village leaders and individual farmers, we ensured land transfers were legal, free and fair, and were carried out in line with local cultural practice.
We also took care to ensure members of the community had the opportunity to work on the new geothermal plant during construction and when it enters operation. The developer is using local suppliers for vehicles, machinery and construction materials where practicable.
Our close co-operation with the people of Tunggul Bute and the project’s other stakeholders means we’re confident that, when the plant begins generating electricity and our role is finished, we will leave behind a stronger, more prosperous community.