GEOTHERMAL IN INDONESIA (OVER VIEW) Sigit Rahardjo Operation Director PT PERTAMINA GEOTHERMAL ENERGY Jogjakarta , Mei 2013

GEOTHERMAL ENERGY

CHARACTERISTIC OF GEOTHERMAL BUSINESS

1 GEOTHERMAL ENERGY

INDONESIA HAS THE HIGHEST POTENTIAL FOR GEOTHERMAL ENERGY IN THE WORLD Conventional geothermal 2010 capacity and total potential capacity GW Indonesia

U.S. Japan

•

1

•

3

•

1 2

Philippines

2

Mexico

1

•

Iceland

1 •

New Zealand 1• Total

•

•

20

19

•

Others1

•

27

18

Resource Utilization % 4

28

13

23

•

20

3

•

20

10

•

6

33

5

•

6

20

5

•

6

10

4

3•

16

4 11

102

•

113

10

• In spite of its world’s largest potential of geothermal resource, the utilization only remains 4%

• Geothermal resource in Indonesia is also high temperature resource which enable more economical geothermal development project • •

Installed Potential

1 Includes mostly South/South-East Asia and Africa SOURCE: GEA; DOE; EER; World Geothermal Congress; Energy Information Administration (EIA); interviews

2 GEOTHERMAL ENERGY

INDONESIA’S WORLD LEADING GEOTHERMAL PROSPECT Borneo Sumatera Speculative : 13.258 MWe Probable * : 5.433 MWe

Speculative : 45 MWe Probable * : - MWe

Speculative : 27.141 MW Probable : 10.253 MW Current Installed Capacity : 1,337 MW Maluku

Sulawesi Speculative : 1.907 MWe Probable * : 721 MWe

Medan

Speculative : 734 MWe Probable * : 142 MWe

Manado

Tanjung Karang

Bandung

Semarang

Java Speculative : 9.471 MWe Probable * : 3.086 MWe Geothermal location

Papua Bali & NTT Speculative : 1.676 MWe Probable * : 871 MWe

Speculative : 50 MWe MAGMA Probable * : - MWe

3 GEOTHERMAL ENERGY

GEOTHERMAL ROAD MAP (Based on President Decree No. 5/2006 on National Energy Policy; Modified by MEMR.REG. No. 15/2010)

2006

2008

2012

2016

2020

2025

2014

852 MW (Production)

1148 MW Existing WKP

2000 MW

3442 MW

5171 MW

12332 MW

7788 MW

(Target baru )

4600 MW *

1442 MW Existing WKP

3977 MW Existing WKP + New WKP

2617 MW New WKP

9500 MW *

4544 MW New WKP

1.337 MW Current Condition

Ministry decree MEMR No. 15/2010

5171 MW Plus The second 10,000 MW fast track program

Under the second 10,000 MW fast-track plan, 34% of energy development come from geothermal energy. (GSDM, 2010, Update Jan 2013)

*) Road Map 2007 4 GEOTHERMAL ENERGY

PERTAMINA AIMS TO BE A LEADER IN GEOTHERMAL DEVELOPMENT Geothermal development by operator type Capacity GW Indonesia

SOE

Philippines

Share of SOE % 23

0.8

2.0

61

100

0 1.2

1.2

Private

1.3

1.2

Mexico Iceland

0.9

0.4

1

84

0.1 0.6

0.5

New Zealand

0.7

0.4

54

0.3

State-owned Enterprise energy companies developed more than 50% of geothermal energy in respective markets 1 State Owned Enterprise

•

SOURCE: company websites

5

GEOTHERMAL ENERGY

PGE’s WORKING AREA TOTAL PGE’S INSTALLED CAPACITY: 402 MW

1 14 13 2

3 4 5 Ref. Ministerial Decree MEMR No 2067K/30/MEM/2012

1. 2. 3. 4. 5.

Sibayak-Sinabung Sibual-buali Sungai Penuh Hululais Lumut Balai & Margabayur

6 7 8

9

10

6. Gunung Waypanas 7. Cibeureum Parabakti 8. Pangalengan 9. Kamojang/Drajat 10. Karaha Cakrabuana

11

12

11. Gn. Iyang Argopuro 12. Tabanan 13. Kotamobago 14. Lahendong

6 GEOTHERMAL ENERGY

GEOTHERMAL DEVELOPMENT CONCEPT

TO SUPPORT ACCELERATION OF GEOTHERMAL DEVELOPMENT IN LINE WITH 10,000 MW POLICY STAGE II – EBTKE’S VISION 25/25 (5 % ENERGY MIX / 12.332 MW - 2025)

IMPLEMENTATION PROJECT MANAGEMENT, RISK ASSESSMENT, ENV MGT

BUSINESS PORTFOLIO ECONOMIC APPROACH

LEGAL ASPECTS LAW, REGULATION, PERMIT

TECHNICAL ASPECT GGGR, OPERATIONAL, MAINTENANCE

GEOTHERMAL ENERGY DEVELOPMENT POLICY (PRES DECREE No. 5 / 2006; GOV’T REGULATION No. 3/2005 – No. 70/2010 : PERMEN ESDM. No. 5 / 2009; No. 2/2011; PERPRES No. 4/2010 : PERPRES No. 10/2011)

1000 MW : 42.250 BOEPD 6.1 JT TON CER”S/YEAR

7 GEOTHERMAL ENERGY

IDEAL GEOTHERMAL BUSINESS PROCESS IN INDONESIA HEAD OF AGREEMENT

PRICE AND CONTRACT NEGOTIATION

Notice Of Resorces Confirmation

Notice Of Intend to Develop

COD US$

• AMDAL / UKL / UPL (EIA/Environment Management Effort/Environment Monitoring Effort) • Location Permit • Permit of Land usage for Exploration Activities – Forestry Minister • SIPPA (Surface Water Usage Permit) • IMB (Construction Permit)

EPC

FEED EXPLOITATION • • • •

EXPLORATION

INVENTORY WKP

2 Years

AMDAL (EIA) Location Permit Land Usage Permit SIPPA (Surface Water Usage Permit) • IMB (Construction Permit)

3 Years 8 GEOTHERMAL ENERGY

Pertamina aspires to achieve by 2015

•MW 2,295

2,445

2,505

•15

•16

•17

•2018

102

112

119

122

•2015

•2016

•2017

1,508

•Steam Availability

2,090 823 610

•2012

•13

•14

•K Boepd •Oil equivalent

73 30

•2012

40

•2013

•2014

9

•2018

GEOTHERMAL ENERGY

KEY BARRIERS TO GEOTHERMAL DEVELOPMENT IN INDONESIA Description

• Higher capital expenditure compared with other power generation technologies

Uncertain economics

High upfront • Cost of USD 35-50 Mn for preliminary studies including exploration wells to prove the reserves without any capital requirement external financing

• Development and exploration costs are solely borne

Uncertainty on pricing

•

by geothermal company and are not reimbursed by government unlike the practice in oil & gas industry Implementation of MEMR Decree on Feed In Tariff requires further negotiation with PLN as a single buyer

• Most of the geothermal reserves are located in protected forests and geothermal activities are not allowed to carry out in forest conservation areas

Uncertain environment

Regulatory uncertainty

• Overlapping jurisdictions increases lead time and complexity as local authorities often block the projects approved by the central government

All these together mean that under the current environment, geothermal development projects are potentially high risk, especially for smaller operators

• Tariff agreement with PLN often comes back for the renegotiation, hence no guarantee on the price

Other risks

• PLN off take is not guaranteed by government 10 GEOTHERMAL ENERGY

11

PGE PRODUCTION FIELD - OWN OPERATION

POWER PLANT UNIT – 4 ( 60 MW )

POWER PLANT UNIT 1,2 & 3 (30; 2 x 55 MW)

KAMOJANG GEOTHERMAL FIELDS

POWER PLANT UNIT-1

SIBAYAK GEOTHERMAL FIELD

PRODUCTION CLUSTER UNIT-2 POWER PLANT UNIT-4

LAHENDONG GEOTHERMAL FIELDS

GEOTHERMAL ENERGY

PGE GEOTHERMAL FIELDS UNDER JOC SCHEME

WAYANG-WINDU GEOTHERMAL FIELDS (JOC-STAR ENERGY) PLTP 1x110 MW & 1x117 MW

DARAJAT GEOTHERMAL FIELD (JOC-CHEVRON) PLTP 1x55 MW, 1x95 MW & 1x121 MW

SALAK GEOTHERMAL FIELD (JOC-CHEVRON) PLTP 3x60 MW & 3x65 MW 12 GEOTHERMAL ENERGY

PGE’S GEOTHERMAL ONGOING PROJECTS No

Project Name

Location

Capacity (MW)

Project Type

1

Lumutbalai Unit 1&2,

Sumatera Selatan

2 x 55 MW

Total Project

2

Lumutbalai Unit 3&4,

Sumatera Selatan

2 x 55 MW

Total Project

3

Ulubelu Unit 3&4,

Lampung

2 x 55 MW

Total Project

4

Kamojang Unit 5

Jawa Barat

30 MW

Total Project

5

Lahendong Unit 5&6

Sulawesi Utara

2x20 MW

Total Project

6

Kotamobagu Unit 1&2

Sulawesi Utara

2 x 20 MW

Steam Supply

7

Hululais Unit 1&2

Bengkulu

2 x 55 MW

Steam Supply

8

Sungai Penuh Unit 1

Jambi

55 MW

Steam Supply

9

Karaha

Jawa Barat

30 MW

Total Project

GEOTHERMAL ENERGY

UPCOMING GREENFIELDS DEVELOPMENT PLAN Kotamobagu Name of Prospect Area

Ins. Capacity (MW)

Medan

Sumatera Island Manado

1 2

3 4

Sinabung

WKP Sungai Penuh 1. Semurup

40

WKP Hululais – Tambang Sawah 1.Tambang Sawah 2.Bukit Daun

70 110

WKP Lumut Balai 1. Margabayur

75

WKP Ulubelu – Way Panas 1. Way Panas

Sumurup Tambang Sawah Bukit Daun Margabayur Way Panas

Tanjung Karang

MAGMA Ciharus

Semarang Bandung

Masigit-Guntur 120

Iyang Argopuro Java Island 5

6

Key Indicators:

WKP Kamojang 1.G. Masigit Guntur 2.Ciharus

50 30

WKP Iyang Argopuro 1. Iyang Argopuro

55

Sulawesi Island 7

WKP Kotamobago 1. Kotamobago

60

• New Geothermal Power Generation Capacity : ± 610 MW • Additional Power Generation (kWh per year) : ± 4800 million • Avoided CO2 : ± 4,5 million tonnes per Year 14 GEOTHERMAL ENERGY

THANK YOU

Bekerja dan ibadah adalah energi kami Semoga semua upaya menghasilkan manfaat Insya Allah! 15 GEOTHERMAL ENERGY