2012 09 24 IV Geothermie Indonesien Harsoprayitno

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Ministry of Energy and Mineral Resources

Directorate General of New Renewable Energy and Energy Conservation

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

Geothermal Development in Indonesia

Presented at:


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Ministry of Energy and Mineral ResourcesDirectorate General of New Renewable Energy and Energy Conservation

Geothermal Energy Potent ia ls in Indonesia Worksho p

Berlin German, September 20th 2012

OUTLINE

I. Introduction

II. Energi Condition 2010

III. Share of the National Energy ConsumptionIV. Share of the National Energy Supply

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V. Energy Policy Direction

VI. Power Plant Installed Capacity

VII. Electricity Demand Projection

VIII. Geothermal Potential in Indonesia

IX. Geothermal Policies

X. Geothermal Activities

XI. Invesment Opportunities

INTRODUCTION

Indonesia has an abundance potentials in geothermal energymore than 29 GWe which are distributed in 285 locations alongthe country. Unfortunately, less than 5% of the potentials have been utilized.

Average growth of energy consumption is 8,5% per year. Up to now, energy nationaldemand is still fulfiledl by fossil fuels.

Presidential Decree No. 5 / 2006 on National Energy Policy (KEN) has been targettedthat by 2025, the electricity from geothermal power plant will be reached up to 9,500MW or equivalent to 5% of national energy consumption.

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To support the utilization of geothermal energy, the GoI have been issued TheFasttrack Program Phase II in order to accelerate a 10.000 MW electricity development

from geothermal power plant (4,925 MW) The program needs more than US$ 14,000 million of investment. In order to support the

program, the GoI has been issued some policies and regulations to overcome barriersin geothermal development.

GoI has also launched Energy Vision 25/25 to support the program. The vision has atarget that by 2025 the energy utilization based on new and renewable energy willreach be reached to 25% of total national mixed energy. Whereas, The target of

geothermal utilization itself is 5.7% of equivalent to 12,000 MW.

ENERGY CONDITION 2010

1. Limited access to (modern) energy :

National a. Electrification ratio in 2010 is 67,2% (32,8% Primary Energy Mix

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2010 household with no access to electricity);

10666 MMillion BOE on BOE b. Development of energy infrastr

rural/isolated areas and borderline islands has no access to

electricity);

2. Average growth of energy consumption is 7% per year, with no

sufficient energy supply;

3. Dependency to fossil energy is still high, with limited reserves;

4. New renewable energy utilization and energy conservation

implementation is not optimum;

5. Related environmental issues :

a. Climate change mitigation;

b. Carbon emission trading;

c. National commitment to reduce 26% of carbon

Energy Elasticity= 1,60 emission by 2020;

Share if Non Fossil Energy < 5% 6. Funding for energy sector development is still limited.

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NRE5%

Coal

24%Gas2%

Oil47%


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SHARE OF THE NATIONAL ENERGY CONSUMPTION


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PER SECTOR (19902010)


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SHARE OF THE NATIONAL ENERGY SUPPLY


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PER SECTOR (19902010)


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POWER PLANT INSTALLED CAPACITY

2010


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Source : Center for Data and Informatioan Energy and Mineral Resources

Hydro Coal GasCombined

CycleGeothermal Diesel

Combined

OilGasWind Total

3,709.57 12,290.50 3,460.38 7,879.16 1,890 4,342.76 38.84 0.60 32,871.97

MW

8


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ELECTRICITY DEMAND

PROJECTION

TWh = Tera Watt hour


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Sourc e : Geological Survey, MEMR(2011)

Note:

P

RESOURCES (MWe) % RESERVE(MWe) %

Speculative Hypothet ical Possib le Probable Proven

8.231 4.964 45.17% 12.909 823 2.288 54.83%

13.195 16.020

29.215

9

Already Developed

Ready to Developad

GEOTHERMAL POTENTIAL MAP


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reliminary Survey

Detail Survey


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INSTALLED GEOTHERMAL POWER PLANT CAPACITY

Name of InstalledGeothermal Working

NoNo. License Holder Developer Geothermal CapacityArea/ Location

Power Plant (MW)

Sibayak Sinabung, PT. Pertamina Geothermal PT. Pertamina Geothermal1 Sibayak 12

North Sumatera Energy (PGE) Energy (PGE)

Cibeureum Parabakti, PT. Pertamina Geothermal JOC - Chevron Geothermal2 Salak 377

West Java Energy (PGE) Salak, Ltd (CGS)

PangaPangalenganengan, PTPT. Pertamina Geothermal JOC - Star Energy GeothermalWayang 3 227

West Java Energy (PGE) Wayang Windu, Ltd (SEGWWL) Windu

Kamojang Darajat, PT. Pertamina Geothermal PT. Pertamina Geothermal4 Kamojang 200

West Java Energy (PGE) Energy (PGE)

Kamojang Darajat, PT. Pertamina Geothermal JOC - Chevron Geothermal5 Darajat 270

West Java Energy (PGE) Indonesia, Ltd (CGI)

DaDataran Tinggi Dienga an T ngg D eng, PTPT. Pertamina Geothermal


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6 PT. Geo Dipa Energi(GDE) Dieng 60

Central Java Energy (PGE)

Lahendong Tompaso, PT. Pertamina Geothermal PT. Pertamina Geothermal7 Lahendong 80

North Sulawesi Energy (PGE) Energy (PGE)

1.226

JOC :Joint Operation Contract


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GOVERNMENT POLICIES TO SCALE UP GEOTHERMAL

DEVELOPMENT IN INDONESIA

The Government of Indonesia (GoI) intends to accelerate and speed up the development ofgeothermal. In order to do so, the government intends to enhance the investment climatefor both existing developers as well as new entrants to the geothermal sector in Indonesia.

1.Law No. 27/2003 on Geothermal and Government Regulations No. 59/2007 on Geothermal

Business Activities jo Government Regulations No. 70/2010 are the basis of geothermaldevelopment Indonesia

2.Presidential Regulation No. 04/2010 jo Ministerial Regulation No. 01/2012 as revised ofMinisterial Regulation No. 15/2010 (2nd Stage of 10,000 MW Fast Track Program) in orderto speed up the development of geothermal power.

3.Pricing Policy

GoI have issued Ministerial Regulation No. 22/2012 on Assignment to PT PLN (Persero) to

Purchase Electricity from Geothermal Power Plant and Geothermal Power PurchaseBenchmark Price by PT PLN (Persero) which covers Feed in TariffMechanism (FIT). This

regulation obligates PT PLN (Persero) to buy electricity refers to location and availabletransmission of the Plant.


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4. Access to Potential Geothermal Resources for Investors, Government offers aPreliminary Survey Assignment to third party (investor) which provides Right to Match.

GOVERNMENT POLICIES TO SCALE UP GEOTHERMALDEVELOPMENT IN INDONESIA (contd)

5. Fiscal incentivesFiscal incentives for geothermal development (based on Government Regulation No.

62/2008 jo No. 1/2007; MR of MoF No. 177/PMK.011/2007; and MR of MoF No.

22/PMK.011/2011) :- 30% of corporate income tax;- 10% of added-value tax paid by the GoI;- Custom duties exemption for geothermal developer;- 25% per year depreciation for 8 years with double declining balance method; and -

Investment tax credit 5% per year for 6 years.

6. Related to Forestry Issues, currently MEMR and Ministry of Forest have signed theMoU regarding the acceleration of geothermal utilization permit within production forest,protected forest, and conservation forest.

7. Presidential Decree that guarantees support for investment in GeothermalInfrastructure Project (PR No. 13/2010 jo PR No.67/2005 and PR 78/2010) and Ministrial


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of Finance Regulation No. 139/2011 (PMK No. 139/2011) which guarantee the businessfeasibility of PT PLN for developing electricity from renewable energy, coal, and gasthrough cooperation with Independent Power Producers.

FEED-IN TARIFF IMPLEMENTATION

The FiT scheme for geothermal in Indonesia is divided into 6 areas and notdepended on the capacities.

Thus all electricity generated from geothermal power plant will be bought using thisscheme.

The advantages of FiT scheme for geothermal are providing economical price fordeveloper and accelerating geothermal development.

For the FiT scheme if the project can not perform in regard to

time and capacity. The electricity price from the project will befollowed the electricity price at that time

Feed-in Tariff are applied for all geothermal business scheme:


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- Existing GWA for Contract extension, unit expansion and alreadysigned PPA as long as both parties agree to renegotiate

- New GWA for IUP holder after the MR issued and IUP holder

will negotiate PPA as long as both parties agree to renegotiate

STRATEGICAL TARGET FOR GEOTHERMAL

DEVELOPMENT 2010 - 2014

Presidential Regulation No. 04/2010 on Assignment to PT. PLN to AcceleratePower Plant Development Using Renewable Energy, Coal and Gas

MEMR Regulation No. 01/2012 as revised of Ministerial Regulation No. 15/2010 onProjects List of Power Plant Accelerated Development using Renewable Energy,

Coal and Gas as well as Related Transmission

Target for Geothermal Power Plant Development on Crash Program 10.000

MW Phase II


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- Development for Production on Existing Field : 465 MW -Development for not yet in production on Existing Field : 1535

MW- New Development Geothermal Working Area : 2925 MW

Total of Geothermal Development 4925 MW


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INVESTMENT OPPORTUNITIES

1. Geothermal developer

-Foreign ownership in Geothermal Business is allowed up to 95 %;

-Up to year 2025, Indonesia will develop total 9,500 MW base on geothermal roadmap. Unfortunately, only 1,226 MW installed in 2012.

2. Services Company

Exploration, Drilling, Construction,

3. Manufacturing

Piping, Turbin, Instrumentation,


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4. Financial

30 % capital, 70 % loan


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Geothermal Power Plant Projects in Fast Track Phase II


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Geothermal Power Plant Projects in Fast Track Phase II


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DANKE

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TERIMA KASIH


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attachment


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Implementation of Geothermal Policies

President Decree No 45/1991, No49/1991, and No 23/1992

Business structure based on JOC and

ESC

34% of Net Operating Income (NOI),that had included all kinds of taxes andretribution, except personal tax.

Project Management : Under Pertamina

(JOC) and PLN (ESC)

Project Type:

Mi i t f E d Mi l R


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Existing GWA

Law No. 27/2003

Business structure in the form of Permit:Geothermal Business PermitEnterprise Permit for Electricity

ObObligation to pay for taga on o pa o axes and royaltye and o a

Project Management t : U Undder P Permit Hit Holdlder

Project Type:Total (Integrated) Project

lly plan operation

Geothermal Activities in Indonesia

Total (Integrattedd) ProjectPartial Project



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y gyDirectorate General of New Renewable Energy and Energy Conservation

DGNREEC-MEMR-2012

GEOTHERMAL FEED-IN TARIFF MECHANISM

(Based On MinistrialRegulation of MEMR No. 22 / 2012)

In FIT mechanism, the Government set the price of electricity fromgeothermal power plant. The price is final and can not be negotiated. Themechanism is determined base on:1. Energy resources avaibility; 2.

Environment support;3. Economical aspects.



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The mechanism is expected to reduce the main obstacle in geothermaldevelopment related to price uncertainty that usually requires a long time

for negotiation.

Ministry of Energy and Mineral ResourcesDi G l f N R bl E d E C i


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GEOTHERMAL FEED-IN TARIFF

AreaNo

Price)(cent US$/kWh

High VoltageMedium Voltage

1 11,5Sumatera 10

2 JAMALIJava BaliandMadura 1211 5( , ) ,

3 SouthernSulawesi

Sulawesi)(SouthSulawesi,WestSulawesi,andSoutheast12 13,5

SulawesiNorthern 5,14134

(NorthSulawesi,CentralSulawesi,andGorontalo

5 Tenggara, 15TenggaraNusaEastandWestNusa 16,5

6 5MalukuandPapua 17 18,

2012 09 24 IV Geothermie Indonesien Harsoprayitno

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