Power Plants Project Updates and DMO Requirement : Kalimantan’s Roles in Fueling Future National

Electricity Helmi Najamuddin, Head of Coal Division – PLN, 2 Sept 2014, Balikpapan

CFPP Pacitan (2 x 315 MW) CFPP Kendari (2 x 10 MW) CFPP Barru (2 x 50 MW) CFPP Tj. Balai Karimun (2 x 7 MW)

NO Bribery

NO Gratification NO Corruption

2

Table of Contents

1. Introduction to PLN

2.

3.

Fast Track Program 10.000 MW Update

Coal Overview

4.

5.

6.

Domestic Market Obligation

Coal Supply Agreement

PLN’s Coal Demand Projection – up to 2022

7.

8.

9.

10.

Coal Fired Power Plant and Its Coal Consumption - 2014

Local Coal Pricing

Generation Expansion Projects

New Coal Biddings - 2014

1. Introduction to PLN

Corporate Structure

Ministry of State Owned Enterprises (MSOE) Ministry of Energy and Mineral

Resources (MEMR) Ministry of Finance (MoF) Ministry of the Environment

National Development Planning Authority (BAPPENAS)

PT Indonesia Comnets Plus Telecommunications for

the Electricity Sector

PT PLN Batubara

Coal Supplier for PLN

PT Prima Layanan Nasional Enjiniring Engineering and

Construction Services

PT PLN Tarakan

Regional Fully Integrated Electric Utility

PT PLN Batam

Regional Fully Integrated Electric Utility

PT Indonesia Power

Electricity Generation

Government of Indonesia will continue to hold 100% of PLN

PT PLN (Persero)

Majapahit Holding B.V.

Financial Institution

Oversight

PT PLN Geothermal

Geothermal Energy Generation

PT Pembangkitan Jawa Bali

Electricity Generation

PT Pelayaran Bahtera Adhiguna

Shipping Activities

Note: Excludes Joint Ventures.

PT Haleyora Power

Electricity Supplier

Who are we ?

5

The biggest Indonesia’s State Owned Enterprise Company with USD 56 billion Assets

Total electrical generating capacity : 54.5 GW serving 54 million customers Of the total, 26,4 GW is CFPP (72% owned by PLN), require about 70 million ton coal in 2014

INSTALLED CAPACITY PER MARCH 2014

EVO-SJB 2014

Fuel Mix in Java Bali System (January Up to 15 March 2014)

PLTA6.5%

PLTP4.8%

BtBara58.2%

BBG21.3%

LNG6.7%

MFO0.4%

HSD2.2%

Coal

Why PLN builds 10.000 MW Fast Track Program Phase I and Phase II ?

The 10.000 MW Fast Track Program is designed to reduce PLN’s reliance on fuel oil, which

currently is PLN’s most expensive fuel cost of electricity production on a IDR per-kWh basis.

IDR

/kW

h

(ESTIMATION)

350 402 410 376

706 730 760 763

2,080 1,995

2,343

2,889

746512

354

862

0

600

1,200

1,800

2,400

3,000

3,600

2011 2012 2013 2014

Natural Gas Coal Geothermal Fuel oil

PLN is to support Indonesia Growing Economy

9

Coal Fired Power Plant Currently in Operation 2013

Additional Coal Fired Power Plant by 2014 (PLN, IPP & Rental)

2. Up date: Fast Track Program 10.000 MW Phase I Fast Track Program 10.000 MW Phase II

12

13

List of Project, FTP Phase II - 10.000 MW*

Developer Power PlantNumber of

Projects

Capacity

(MW)

Geothermal PP 6 340

Hydro PP 4 1,324

Coal PP 21 2,195

Gas Turbine PP 2 380

Combine Cycle 2 740

Geothermal PP 51 4,725

Hydro PP 6 354

Coal PP 36 7,961

Total 128 18,019

PLN

35 projects

4.979 MW

(27.3%)

IPP

93 projects

13.040 MW

(72.7%)

*) Ministry of Energy and Mineral Resources Regulation No. 21 / 2013

14

FAST TRACK PROGRAM - PHASE II

SUMATERA • HEPP : 583 MW •GEOPP: 2.753 MW •SCPP : 547 MW TOTAL : 3.883 MW

JAVA •GEOPP : 2.057 MW •SCPP : 7.775 MW •CCPP : 500 MW •HEPP : 1.095 MW TOTAL : 11.427 MW

West Nusa Tenggara •GEOPP : 40 MW •SCPP : 70 MW TOTAL : 110 MW

East Nusa Tenggara •GEOPP : 35 MW •SCPP : 24 MW TOTAL : 59 MW

KALIMANTAN • CCPP: 120 MW •GTPP: 380 MW •SCPP: 642 MW TOTAL: 1142 MW

SULAWESI •GEOPP : 145 MW •CCPP : 240 MW •SCPP : 608 MW TOTAL : 993 MW

MALUKU • GEOPP: 35 MW •SCPP : 54 MW TOTAL : 89 MW

PAPUA •SCPP: 116 MW TOTAL: 116 MW

TOTAL •HEPP : 1.678 MW •GEOPP : 5.065 MW •SCPP : 10.036 MW •GTPP : 380 MW •CCPP : 860 MW TOTAL : 18.019 MW

*HEPP : Hydro Electric Power Plant

•GEOPP : Geothermal Power Plant

•SCPP : Steam Coal Power Plant

•CCPP : Combine Cycle Power Plant

•GTPP : Gas Turbine Power Plant

Fast Track Program - 2 Progress

Based on Ministry of Mineral Decree No. 21/2013, FTP – 2 Project has 76 location (17.918 MW) which consist of PLN (17 Location : 5.749 MW) and IPP (59 Location : 12.169 MW)

Current Status :

No Status Capacity (MW) Amount Location

1 Construction / Pre Construction 2.654 9

2 Already Financial Close 400 4

3 Already Power Purchase Agreement (PPA)

940 7

4 PPA Discussion 780 9

5 Problem with land acquisition 2.439 13

Total 7.213 42

Fast Track Program – 2 Status

No Power Plant Capacity (MW) COD Estimation

1 Parit Baru – Coal Fired PP (CFPP) 110 #1 : FEB 2016 #2 : APR 2016

2 Bangkanai – Micro Gas PP (MGPP) 155 JAN 2015

3 Sungai Penuh , Jambi – Geothermal PP (GEOPP) 110 #1 : 2018 #2 : 2018

4 Hululais, Bengkulu – GEOPP 110 #1 : 2018 #2 : 2018

5 Asahan 3, North Sumatera – HYDROPP 174 #1 : 2018 #2 : 2018

6 Masang 2, West Sumatera – HYDROPP 110 2020

7 Pangkalan Susu – CFPP 400 #3 : 2017 #4 : 2017

Fast Track Program – 2 Status

No Power Plant Capacity (MW) COD Estimation

8 Upper Cisokan – HYDROPP 1.040 2017

9 Jatigede #1 & #2 – HYDROPP 110 2017

10 Kotamobagu #1 & #2 – GEOPP 40 #1 : 2022 #2 : 2022

11 Kotamobagu #1 & #2 – GEOPP 40 #1 : 2022 #2 : 2022

12 Sembalun #1 & #2 – GEOPP 20 #1 : 2020 #2 : 2020

13 Tulehu #1 & #2 – GEOPP 20 #1 : 2018 #2 : 2018

14 Punagaya #1 & #2 – CFPP 200 #1 : 2016 #1 : 2016

15 Lombok #1 & #2 – CFPP 50 #1 : 2017 #2 : 2017

3. Coal Overview

19

Exported coal increases more rapidly than its prediction

2010 2011 2012 2013 2014

20

Indonesia Coal Resources (2014)

Based on Calorific Value and Province

21

Indonesia Coal Reserves (2014)

Based on Calorific Value and Province Million Tons

22

Geological Agency 2012 ©

Coal Resources 160 Billion ton (120 B Ton Open Pit & 40 B Ton Underground) Coal Reserves 31.30 Billion ton

53%

10%

47%

90%

53%

10%

Potency

Production

23

Geological Agency and Directorate General of Mineral and Coal 2012 ©

Kalimantan

PKP2B : 61

IUP : 2,670 Sumatera

PKP2B : 15

IUP : 983

Jawa

IUP : 6

Bali & Nusa Tenggara

IUP : 1

Sulawesi

IUP : 105

Maluku

IUP : 12

Papua

IUP : 115

2013

/ IUP total 3892

/ PKP2B total 76

24

Sumatra Low Rank Coal Distribution

25

Kalimantan Low Rank Coal Distribution

WORLD’S COAL RESERVE CURRENT CONDITION

Indonesia is only 3 % of Total World’s Coal Reserve

Indonesia is the Biggest Coal Exporter in the World

No Export Tax

4. DMO (Domestic Market Obligation)

29

DMO - 2014

30

EXPORT

DOMESTIC

Indonesian Coal - 2014

273.2 Million Ton

95,5 Million Ton (25,90%)

Source : Energy And Mineral Resources Decree No. 2901.K/30/MEM/2013 about Domestic Market Obligation

31

Domestic Market Obligation Policy

CURRENT CONDITION

Indonesia is one of the largest coal exporter

2012 Production : 373 MT where 82% of Coal Production is Exported

There is a trend the increase of domestic coal demand

Security of Energy

OBJECTIVES

DMO

Domestic coal supply must be guaranteed : -- More than 10.000 MW Crash Program phase I + II -- Cement Industry -- Metallurgy Industry -- Power Plant

Optimizing National Income

Energy Security

•Law 4/2009 •MEMR Regulation 17/2010 •MEMR Decree 34/2009 •MEMR Decree 1991.K/30/MEM/2011 •MEMR Decree 2901.K/30/MEM/2013

32

Domestic Market Obligation

64.96 78.97 82.07

74.03

95.5

24.75% 24.17% 24.72%

20.03%

25.90%

0%

5%

10%

15%

20%

25%

30%

0

20

40

60

80

100

120

2010 2011 2012 2013 2014

DM

O P

erc

en

tage

(%

)

Mill

ion

MT

/ Ye

ars

Volume

Persentase

Source : Energy And Mineral Resources Decree No. 2901.K/30/MEM/2013 about Domestic Market Obligation

33

Domestic Market Obligation 2014

Supplier in DMO 2014 List

Total Coal Contracted 79.9 Million Ton,

65.21% from Suppliers in DMO 2014 List and 34.79% from suppliers not in DMO 2014 List.

Supplier not in DMO 2014 List

No Suppliers Calorific Value DMO

Contract Volume

Million Ton/Year

1 PT Adaro Indonesia 5.000 12.95 8.3

2 PT Arutmin Indonesia 4.200 7.14 7.6

3 PT Berau Coal 5.050 5.96 4.1

4 PT Indominco Mandiri 5.800 3.59 3.2

5 PT Jorong Barutama Greston 4.500 0.34 0.5

6 PT Kadya Caraka Mulya 4.800 0.1 0.1

7 PT Kaltim Prima Coal 5.200 & 5.700 13.13 9.6

8 PT Kideco Jaya Agung 4.200 & 4900 9.58 8.9

9 PT Bukit Asam (Persero) Tbk. 4.900 4.98 9.8

Total 57.7 52.1

No Suppliers Calorific

Value

Contract Volume Million

Ton/Year 1 PT Artha Daya Coalindo 4.800 0.5 2 PT Batara Batari 4.200 0.5 3 PT Exploitasi Energi Indonesia 4.250 1.3 4 PT Daya Bambu Sejahtera 4.200 0.2 5 PT Dwi Guna Laksana 4.200 2.6 6 PT Hanson Energi 4.200 3.1 7 Konsorsium PT KII dan PT SEM 4.200 3.3 8 PT Natuna Energi 4.800 0.5 9 PT Oktasan Baruna Persada 4.200 2.4

10 PT Rizki Anugerah Pratama 4.250 1.3 11 PT Sumber Suryadaya Prima 4.500 0.5 12 PT Titan Mining Energy 4.200 &

4.600 2.9

13 PT PLN Batubara Various 6.8 14 Kontrak Unit Various 2.0

Total 27.8 Feedback form PLN :

- DMO should be NOT ONLY QUANTITY but also QUALITY

6. PLN’s Coal Demand Projection - up to 2022

PLN’s Coal Supply Policy

To consume DMO and more. 3

To consume Low Rank Coal: abundant resource in

Indonesia (40.4% LRC, 49.9% MRC, 9.7% HRC) 4

To increase coal quality: Clean Coal Technologies 5

To strengthen security of coal supply by :

Long term supply contract 1

To replace oil fuel by coal in fuel mix 2

36

Electricity Demand Growth 2013-2022

36

Sumatera: 10,6%

26

TWh

66

TWh

TWh

IT : 10,8%

18 44

TWh

JB : 7,6%

144

TWh

275

TWh

2013 2022

TWh

TWh 188

385

Kalimantan: 10,7% Sulawesi: 10,8%

Indonesia: 8,4%

Papua: 10%

Maluku: 10,9%

Nusa Tenggara: 11,1%

Tahun 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Demand (TWh) 189 207 226 246 266 287 310 334 359 386

Electrification Rasio (% ) 79.6 82.6 85.9 88.9 91.9 93.7 95.3 96.8 97.4 97.8

Additional Capacity of new Power Plant (including IPP)

37

Additional Capacity 2013-2022:

FTP-1 : 5,4 GW

FTP-2 : 17,8 GW

Reguler : 36,8 GW

Fuel Mix Projection 2013 and 2022 Total Indonesia (Include IPP)

38

Coal 53%

Coal 66%

Mix Energy Projection Total Indonesia , including IPP

39

Hydro

Geothermal

Coal

Gas

LNG

Oil

Import Biomass Solar HSD MFO LNG Gas Coal Geothermal Hydro

40

Fuel Mix 2005-2021 : Coal share to be increased

40

LNG

Geothermal Hydropower

Natural Gas

Coal

Oil

Coal Demand 2014 – 2022

41

0.46 1.58 2.93 3.41 3.47 3.58 3.58 3.58 3.58 17.78 20.41 25.21 32.97 37.42 42.81 51.63

61.53 63.96 54.84

60.89 65.64

69.36 72.67

73.78 75.71

77.66 83.46

73.09 82.89

93.77 105.74

113.55 120.17

130.92 142.77

151.00

0

20

40

60

80

100

120

140

160

180

200

2014 2015 2016 2017 2018 2019 2020 2021 2022

Mill

ion

To

ne

s

Total

PLN

IPP

Rental

Coal Demand, Coal Contracted and

Coal Power Plant Capacity: PLN+PLN’s Sub + IPP

66.3

76.6 82.6

88.1

96.8

85.2 85.5 85.5 85.6 85.6

21.5

24.2 25.1

28.5 29.6

0

5

10

15

20

25

30

35

0

20

40

60

80

100

120

2013 2014 2015 2016 2017

GW Million Ton

Demand Contracted Capacity

43

Coal Demand in Indonesia (2014 up to 2022)

2014 2015 2016 2017 2018 2019 2020 2021 2022

A PLN : Perusahaan Listrik Negara 54,843 60,895 65,640 69,360 72,665 73,782 75,715 77,662 83,465

I PLN - REGION SUMATERA 5,737 8,209 8,945 11,121 13,267 14,230 13,901 13,063 13,192

II PLN - REGION KALIMANTAN 1,601 2,729 3,669 3,895 5,004 4,760 4,644 4,356 4,399

III PLN - REGION INDONESIA TIMUR 974 1,363 1,921 3,075 4,762 5,272 5,528 5,556 5,788

IV PLN - REGION JAWA BALI 46,530 48,593 51,105 51,269 49,633 49,520 51,642 54,687 60,085

B IPP : Independent Power Producer 17,785 20,410 25,207 32,975 37,417 42,810 51,628 61,529 63,957

I IPP - REGION SUMATERA 1,147 2,879 5,275 6,855 7,154 8,376 12,460 15,999 17,025

II IPP - REGION KALIMANTAN 576 677 890 850 1,000 1,897 2,376 2,728 3,057

III IPP - REGION INDONESIA TIMUR 781 750 931 1,007 1,361 2,046 2,224 2,565 3,027

IV IPP - REGION JAWA BALI 15,280 16,104 18,113 24,264 27,902 30,492 34,569 40,238 40,848

C SEWA 461 1,582 2,926 3,410 3,467 3,581 3,581 3,581 3,581

I SEWA - REGION SUMATERA 446 1,556 2,872 3,213 3,213 3,213 3,213 3,213 3,213

II SEWA - REGION KALIMANTAN 15 26 26 26 26 26 26 26 26

III SEWA - REGION INDONESIA TIMUR - - 28 171 228 342 342 342 342

IV SEWA - REGION JAWA BALI

TOTAL KESELURUHAN 73,089 82,887 93,773 105,745 113,549 120,173 130,924 142,771 151,002

No Unit Pembangkit(Ribu Ton / Th)

Caloric Value of the Coal Demand in Kcal/kg (GAR)

• Ombilin CFPP : 5800 – 6200

• Suralaya CFPP : 4900 – 5100

• Tanjung Jati B CFPP : 5700 – 5900

• Cirebon CFPP : 4500 – 5000

• Paiton Energy CFPP : 4900 – 5100

• Jawa Power CFPP : 4900 – 5100

• Cilacap CFPP : 4500 – 4600

• The rest of PLN’s CFPPs: 4000 – 4500

7. Location of coal suppliers for PLN

Location of Coal Supplier for PLN LEGEND:

1. PT Kaltim Prima Coal (PT KPC)

Sanggata, South Borneo

2. PT Kideco Jaya Agung (KJA)

Pasir – East Borneo

3. PT Oktasan Baruna Persada (OBP)

Kotabara – South Borneo

4. PT Arutmin Indonesia (PT AI)

Satui – South Borneo

5. PT Exploitasi Energi Indonesia (PT

EEI)Tapin – South Borneo

6. PT Rizki Anugrah Pratama (PT RAP)

Tapin – South Borneo

7. PT Dwi Guna Laksana (PT DGL)

Banjar – South Borneo

8. PT Kasih Industri Indonesia (PT KII)

Barito Timur – South Borneo

Tebo - Jambi

9. PT Titan Mining Energy (PT TME)

Kutai – East Borneo

10. PT Hanson Energy (PT HE)

Ogan Komering Ulu, South Sumatera

11. PT Bukit Asam (PT BA)

Tanjung Enim, South Sumatera

12. PT Golden Great Borneo (PT GGB)

Lahat, South Sumatera

13. PT Adaro Indonesia

Kelanis, South Borneo

1

2

3

4

5 6

7

8

9

10

11

12

8

13

8. Local Coal Pricing - HBA

INDONESIA COAL REFERENCE (HBA) 2010 – AUG 2014

49

Exchange Rate USD – IDR to rise Coal price for 2014 by 15%

49

8,000

9,000

10,000

11,000

12,000

13,000

2-Jan-08 2-Jan-09 2-Jan-10 2-Jan-11 2-Jan-12 2-Jan-13 2-Jan-14

50

Weighted Average Coal Price Purchased by PLN

IDR

/kg

219.75 230.82 230.75 251.55

335.81 338.76

489.23

732.32

659.71 695 702

618

711.04

-

100

200

300

400

500

600

700

800

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

9. Generation Expansion Projects

Additional Capacity Generation (Include IPP)

52

• Total Additional

Capacity 2013 until

2022 is 60 GW.

Additional Capacity :

Coal Fired :38,0 GW

Geo : 6,0 GW

Combine Cycle : 5,0 GW

Gas : 3,7 GW

Hydro : 7,0 GW

Others : 0,3 GW

MW

Coal Hydro Geo Thermal Combine Cycle Gas Other

10. New Coal Bidding: 2014 : Riau and Kaltim CFPP – 1.000.000 Ton/year (LRC) 2014 (2-half): Tj jati B CFPP – 1.500.000 Ton/year (HRC) PLN's CFPP in Java – 5.000.000 Ton/year (MRC)

54

Invitatition to Bid in newspaper, “Kompas”, 6 January 2014, for Riau CFPP 2x110 MW and Kaltim CFPP 2x110 MW

Closing Remarks

1. Indonesia electricity demand is still high (9.4% per year) thus

need a huge additional capacity of generation, transmission and

distribution.

2. DMO should be decreed NOT ONLY based on the QUANTITY

(Tonnage), but also the QUALITY (Calorific Value) for each Coal

Fired Power Plant

3. PLN is the biggest coal buyer in Indonesia i.e.: 73.1 million Ton

in 2014, and >100 million Ton/year after 2017, and also > 150

million ton/year since 2022

CONCLUSION - 1

4. To supply the high electricity demand in Indonesia, Private Sectors

are invited to have electricity business in generation side as

Independent Power Producers (IPP).

5. The amount of Indonesian coal export should be controlled to fulfill

the security of coal supply for domestic users, in the future.

6. To increase coal price, the amount of coal production in Indonesia

should be decreased.

CONCLUSION - 2

Further contact : helminajamuddin@pln.co.id

Phone: +62 812 122 0450