Masdar, a global clean energy powerhouse, is entering the geothermal energy sector, through a strategic investment in Pertamina Geothermal Energy (PGE), one of the world’s largest geothermal players.

The investment marks Masdar’s entry into geothermal energy, in the second-largest geothermal market in the world, said the company in a statement.

Geothermal energy harnesses the heat generated within the Earth’s core to provide a constant energy source, unlike solar or wind, which are intermittent in nature. Its energy plants also have high-capacity factors, meaning they can run at maximum power for longer periods.

These attributes mean geothermal energy could potentially play a significant role in the clean energy transition, helping nations with a high concentration of geothermal activity to reduce carbon emissions, it stated.

Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and Chairman, Masdar, said: "Achieving the 1.5C target set out in the Paris Accords will require humanity to leverage all sources of low-carbon energy, including sources that are currently under-utilized, like geothermal."

"Through its investment in PGE, Masdar is demonstrating its continuing commitment to Indonesia’s energy transition and its support of one of the major focus areas of the upcoming COP28, which is to provide practical energy security solutions while reducing emissions," he stated.

PGE Chief Executive Officer Ahmad Yuniarto said: "We look forward to working with Masdar in the areas which complement and grow further our capabilities to be a world class green energy company, with the largest geothermal capacity globally. We endeavor to develop 600 megawatts (MW) in additional installed capacity over the next five years to support Indonesia’s renewable energy mix.”

Masdar CEO Mohamed Jameel Al Ramahi pointed out that its strategic investment in PGE will complement the group's strong footprint in Indonesia.

Indonesia, he stated, has a goal of increasing its installed geothermal capacity from 2.8 gigawatts (GW) in 2022 to 6.2 GW by 2030.

The government is targeting net-zero emissions by 2060 and having renewables provide 23 percent of the energy mix by 2023. PGE has been operating geothermal facilities in Indonesia for the last 40 years, with a portfolio capacity exceeding 1.87 GW, he added.