GEOTHERMAL ENERGY

GEOTHERMAL IN INDONESIA (OVER VIEW)

Jogjakarta , Mei 2013

Sigit Rahardjo

Operation DirectorPT PERTAMINA GEOTHERMAL ENERGY

GEOTHERMAL ENERGY

CHARACTERISTIC OF GEOTHERMAL BUSINESS

2

GEOTHERMAL ENERGY3

INDONESIA HAS THE HIGHEST POTENTIAL FOR GEOTHERMAL ENERGY IN THE WORLD

2

11

1

2

3

1

1 • 5

Mexico

• 113

• 5

Philippines

• 4

• 4

Others1

Iceland

New Zealand1• 3

• 6

Total 102

• 6

• 18

Japan

• 6

1 • 19

U.S.

• 20

• 20

Indonesia

• 20

• 27

• 23

• 28

Conventional geothermal 2010 capacity and total potential capacity GW

Resource Utilization%

4

13

3

10

33

20

10

16

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

SOURCE: GEA; DOE; EER; World Geothermal Congress; Energy Information Administration (EIA); interviews

1 Includes mostly South/South-East Asia and Africa

GEOTHERMAL ENERGY4

INDONESIA’S WORLD LEADING GEOTHERMAL PROSPECT

MAGMA

Semarang

Medan

Tanjung Karang

Bandung

Manado

Speculative : 27.141 MWProbable : 10.253 MW

Bali & NTTBali & NTTSpeculativeSpeculative : : 1.676

MWeMWeProbable * Probable * : : 871 MWe MWe

JaJavavaSpeculativeSpeculative : : 9.471

MWeMWeProbable * Probable * : : 3.086

MWeMWe

SumateraSumateraSpeculativeSpeculative : : 13.258

MWeMWeProbable * Probable * : : 5.433

MWeMWe

SulawesiSulawesiSpeculativeSpeculative : : 1.907

MWeMWeProbable * Probable * : : 721

MWeMWe

Geothermal location

MalukuMalukuSpeculativeSpeculative : : 734

MWeMWeProbable * Probable * : : 142

MWeMWe

BorneoBorneoSpeculativeSpeculative : : 45

MWeMWeProbable * Probable * : : - MWeMWe

PapuaPapuaSpeculativeSpeculative : : 50 MWe MWeProbable * Probable * : : - - MWeMWe

Current Installed Capacity : 1,337 MW

GEOTHERMAL ENERGY

(GSDM, 2010, Update Jan 2013)

Current Condition

2006

852 MW(Production)

2008 2012 2016 2020

2000 MW

3442 MW

5171 MW

7788 MW

12332 MW(Target baru )

1148 MWExisting WKP

1442 MWExisting WKP

3977 MWExisting WKP + New WKP

2617 MWNew WKP

4544 MWNew WKP

2025

1.337 MW

2014

Plus The second 10,000 MW fast track program

5171 MW

Ministry decree MEMRNo. 15/2010

4600 MW * 9500 MW *

*) Road Map 2007

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

GEOTHERMAL ROAD MAPGEOTHERMAL ROAD MAP

Under the second 10,000 MW fast-track plan, 34% of energy development come from geothermal energy.

5

GEOTHERMAL ENERGY6

PERTAMINA AIMS TO BE A LEADER IN GEOTHERMAL DEVELOPMENT

0.4

1.2

1.2

0.5

0.4

1.2

New Zealand 0.70.3

Iceland 0.60.1

Mexico 0

Philippines 2.00.8

Indonesia 1.30.9

SOE 1 PrivateShare of SOE%

23

61

100

84

54

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

• SOURCE: company websites

Geothermal development by operator type

CapacityGW

1 State Owned Enterprise

GEOTHERMAL ENERGY7

PGE’s WORKING AREATOTAL PGE’S INSTALLED CAPACITY: 402 MW

3

54

67

910

12

13

811

1

2

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

1. Sibayak-Sinabung

2. Sibual-buali3. Sungai Penuh4. Hululais5. Lumut Balai &

Margabayur

6. Gunung Waypanas7. Cibeureum Parabakti8. Pangalengan9. Kamojang/Drajat10. Karaha Cakrabuana

11. Gn. Iyang Argopuro 12. Tabanan13. Kotamobago14. Lahendong

14

GEOTHERMAL ENERGY8

GEOTHERMAL DEVELOPMENT CONCEPT

TEC

HN

ICA

L A

SPEC

TG

GG

R, O

PER

ATI

ON

AL,

M

AIN

TEN

AN

CE

LEG

AL

ASP

ECTS

LAW

, REG

ULA

TIO

N, P

ERM

IT

BU

SIN

ESS

POR

TFO

LIO

ECO

NO

MIC

APP

RO

AC

H

IMPL

EMEN

TATI

ON

PR

OJE

CT

MA

NA

GEM

ENT,

RIS

K A

SSES

SMEN

T,EN

V M

GT

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

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)

GEOTHERMAL ENERGY9

IDEAL GEOTHERMAL BUSINESS PROCESS IN INDONESIA

INVENTORY WKP

EXPLORATION

EXPLOITATION

EPC

FEED

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)

HEAD OF AGREEMENT PRICE AND CONTRACT NEGOTIATION

Notice Of Resorces Confirmation Notice Of Intend to Develop

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

Permit)• IMB (Construction Permit)

2 Years 3 Years

GEOTHERMAL ENERGY10

Pertamina aspires to achieve by 2015

10

2,5052,4452,2952,0901,508

823610

•2018•17•16•15•14•13•2012

•Steam Availability

•Oil equivalent

•MW

12211911210273

4030

•2018•2017•2016•2015•2014•2013•2012

•K Boepd

GEOTHERMAL ENERGY

KEY BARRIERS TO GEOTHERMAL DEVELOPMENT IN INDONESIA

Uncertain economics

Uncertain environ-ment

High upfront capital requirement

Uncertainty on pricing

Regulatory uncertainty

Other risks

Description• Higher capital expenditure compared with other power

generation technologies• Cost of USD 35-50 Mn for preliminary studies including

exploration wells to prove the reserves without any external financing

• Development and exploration costs are solely borne 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

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

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

• PLN off take is not guaranteed by government

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

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GEOTHERMAL ENERGY

PGE PRODUCTION FIELD - OWN OPERATION

KAMOJANG GEOTHERMAL FIELDS SIBAYAK GEOTHERMAL FIELD

LAHENDONG GEOTHERMAL FIELDS

POWER PLANT UNIT-1

POWER PLANT UNIT – 4 ( 60 MW )POWER PLANT UNIT – 4 ( 60 MW ) POWER PLANT UNIT 1,2 & 3 POWER PLANT UNIT 1,2 & 3 (30; 2 x 55 MW)(30; 2 x 55 MW)

PRODUCTION CLUSTER UNIT-2

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POWER PLANT POWER PLANT UNIT-4UNIT-4

GEOTHERMAL ENERGY

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

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

PGE GEOTHERMAL FIELDS UNDER JOC SCHEME

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

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GEOTHERMAL ENERGY

PGE’S GEOTHERMAL ONGOING PROJECTS

GEOTHERMAL ENERGY15

UPCOMING GREENFIELDS DEVELOPMENT PLAN

Name of Prospect Area Ins. Capacity (MW)

Sumatera Island

1 WKP Sungai Penuh1. Semurup 40

2 WKP Hululais – Tambang Sawah1.Tambang Sawah2.Bukit Daun

70110

3 WKP Lumut Balai1. Margabayur 75

4 WKP Ulubelu – Way Panas1. Way Panas 120

Java Island

5 WKP Kamojang1.G. Masigit Guntur2.Ciharus

5030

6 WKP Iyang Argopuro1. Iyang Argopuro 55

Sulawesi Island

7 WKP Kotamobago1. Kotamobago

60

MAGMASemarang

Medan

Tanjung Karang

Bandung

Manado

Way Panas

Kotamobagu

Tambang Sawah Bukit Daun

Margabayur

Ciharus

Iyang Argopuro

Masigit-Guntur

Sumurup

Sinabung

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

GEOTHERMAL ENERGY

Bekerja dan ibadah adalah energi kami

Semoga semua upaya menghasilkan manfaat

Insya Allah!

THANK YOU

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