DEVELOPMENT OF GEOTHERMAL POLICIES, POTENTIAL …...DEVELOPMENT OF GEOTHERMAL POLICIES, POTENTIAL...

DEVELOPMENT OF GEOTHERMAL

POLICIES, POTENTIAL RESOURCES

AND IMPLEMENTATION TARGET

DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION

MINISTRY OF ENERGY AND MINERAL RESOURCES

by:

Dr. Ir. Djadjang Sukarna Secretary of Directorate General of New Renewable Energy and Energy Conservation

Presented at:

“Indo EBTKE Conference And Exhibition”

Jakarta, July 18th 2012

Direktorat Jenderal

EBTKE Ministry of Energy and Mineral Resources

Directorate General of New Renewable Energy and Energy Conservation

I. Introduction

II. Geothermal Potential

III. Geothermal Policies

IV. Feed-in Tariff Mechanism

V. Geothermal Development

VI. Invesment Opportunities

OUTLINE

Direktorat Jenderal



INTRODUCTION

• Indonesia has abundance potential on geothermal energy more than 29 GWe

which distributed in 285 locations along the country, yet, only less than 5% have

been utilized. Total installed capacity of geothermal energy is 1,226 MW.

• Total installed capacity of power plan is almost 30,000 MW (mid 2011). Average

growth of energy consumption is 8,5% per year (RUPTL 2011-2020). Up to now

Energy National demand is still fulfill from fossil fuel but the reserves are

progressively decreasing. These situations have forced to perform two things,

efficiency in the use of fossil fuels and find out new alternatives energy which are

relatively cheaper and environmentally friendly

• The Government of Indonesia (GoI) is concerned in energy development based

on green energy, mainly geothermal. Presidential Decree No. 5 / 2006 on

National Energy Policy (KEN) has targeted in 2025 electricity from geothermal

energy will reach 9500 MW or contribute 5% of national energy consumption.

• GoI has also launched “Energy Vision 25/25”. This vision targeted that in 2025 the

energy utilization based on new and renewable energy will reach 25% of total

national energy mix. Geothermal is expected to contribute 5.7% or about 12,000

MW in 2025

Direktorat Jenderal



• To support utilization geothermal energy, the GoI have been issued crash

program phase II to accelerate 10.000 MW electricity development that

derived from geothermal power plant (4,925 MW)

• Achieving the proposed 4,925 MW new geothermal capacity would

automatically lead Indonesia to the single largest CO2 mitigation program in

the world. The proposed program will reduce in the period of 2010 – 2025 over

400 million tCO2.

• Up to 2012, The Government of Indonesia (GoI) has determined total of fifty

four GWAs. Nineteen of the GWAs were established before the issuance of Law

No. 27/2003 (Existing GWA) while 35 of them were established afterwards (New

GWA).

• The program need more than US$ 14,000 million. In order to support the

program, the GoI has issued some policies and regulations to overcome

barriers in geothermal development.

INTRODUCTION (cont’d)

Direktorat Jenderal



ENERGY SUPPLY - DEMAND 2011 - 2025

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Coal

Gas

Oil

MIL

LIO

N B

OEP

D

OIL DEMAND

BaU DEMAND

DEMAND WITH CONSERVATION

Indonesia might be an net-energy importing country in year 2019

ENERGY PRODUCTION

< ENERGY DEMAND

Direktorat Jenderal



I. Introduction






OUTLINE

Direktorat Jenderal



Source : Geological Survey, MEMR(2011)

GEOTHERMAL POTENTIAL MAP

Already Developed

Ready to Developad

Detail Survey

Preliminary Survey

Note:

Direktorat Jenderal



Source : Geological Agency, MEMR as Desember 2011

RESOURCES (MWe)

% RESERVE (MWe)

%

Speculative Hypothetical

45.17%

Possible Probable Proven

54.83% 8.231 4.964 12.909 823 2.288

13.195 16.020

29.215

INDONESIA’S GEOTHERMAL POTENTIAL

©2012

Ministry of Energy and Mineral Resources


10

ACEH 2 WKP

Jaboi: 70 MW

Seulawah Agam: 130 MW

NORTH SUMATERA 5 WKP

Sibayak – Sinabung: 130 MW

Sibual – Buali: 750 MW

Sipaholon Ria-ria: 75 MW

Sorik Marapi: 200 MW

Simbolon Samosir : 155 MW

JAMBI 1 WKP

Sungai Penuh: 70 MW

SOUTH SUMATERA 3 WKP

Lumut Balai: 250 MW

Rantau Dedap: 106 MW

Danau Ranau: 210 MW

BANTEN 2 WKP

Kaldera Danau Banten: 115 MW

G. Endut: 80 MW

WEST SUMATERA 4 WKP

Bukit Kili: 83 MW

Gn Talang: 35 MW

Liki Pinangawan: 400 MW

Bonjol: 200 MW

BENGKULU 1 WKP

Tmbg Sawah-Hululais: 873 MW

LAMPUNG 4 WKP

Gn.Rajabasa: 91 MW

Suoh Sekincau: 230 MW

Waypanas – Ulubelu: 556 MW

Danau Ranau: 210 MW

Way Ratai :105 MW

WEST JAVA 10 WKP

Ciater - Tgkban Perahu: 60 MW

Cibeureum–Parabakti: 485 MW

Cibuni: 140 MW

Cisolok Cisukarame: 45 MW

Gn. Tampomas: 50 MW

Gn. Tgkuban Perahu: 100 MW

Kamojang-Darajat: 1465 MW

Karaha Cakrabuana: 725 MW

Pangalengan: 1106 MW

G. Ciremai: 150 MW

CENTRAL JAVA 5 WKP

Baturaden: 175 MW

Dataran Tinggi Dieng: 780 MW

Guci: 79 MW

Gn. Ungaran: 100 MW

Umbul Telomoyo : 120 MW

EAST JAVA 3 WKP

Blawan – Ijen: 270 MW

Gn. Iyang Argopuro: 295 MW

Telaga Ngebel: 120 MW

BALI 1 WKP

Tabanan: 276 MW

WEST NUSA

TENGGARA 1 WKP

Hu'u Daha: 65 MW

EAST NUSA TENGGARA 4 WKP

Atadei: 40 MW

Sokoria: 30 MW

Ulumbu: 199 MW

Mataloko: 63 MW

MALUKU 1 WKP

Tulehu: 100 MW

NORTH MALUKU 2 WKP

Jailolo: 75 MW

Songa Wayaua: 140 MW

NORTH SULAWESI 2 WKP

Kotamobagu: 410 MW

Lahendong-Tompaso: 358 MW

GORONTALO 1 WKP

Suwawa: 110 MW

CENTRAL SULAWESI 2 WKP

Marana: 35 MW

Bora Pulu : 152 MW

Total : 54 GWA

DISTRIBUTION OF GEOTHERMAL WORKING AREA (GWA)

Direktorat Jenderal



INSTALLED GEOTHERMAL POWER PLANT (GPP) As Of April 2012

GPP SIBAYAK: 12 MW

GPP GUNUNG SALAK: 377 MW GPP WAYANG WINDU:

227 MW

GPP KAMOJANG: 200 MW

GPP DARAJAT: 270 MW

GPP DIENG: 60 MW

GPP LAHENDONG: 80 MW

Direktorat Jenderal



No. Geothermal Working

Area/ Location License Holder Developer

Name of

Geothermal

Power Plant

Installed

Capacity

(MW)

1 Sibayak – Sinabung,

SUMUT

PT. Pertamina Geothermal

Energy (PGE)


Energy (PGE) Sibayak 12

2 Cibeureum – Parabakti,

JABAR


Energy (PGE)

KOB - Chevron Geothermal

Salak, Ltd (CGS) Salak 377

3 Pangalengan, JABAR PT. Pertamina Geothermal

Energy (PGE)

KOB - Star Energy

Geothermal Wayang

Windu, Ltd (SEGWWL)

Wayang

Windu 227

4 Kamojang – Darajat,

JABAR


Energy (PGE)


Energy (PGE) Kamojang 200

5 Kamojang – Darajat,

JABAR


Energy (PGE)

KOB - Chevron Geothermal

Indonesia, Ltd (CGI) Darajat 270

6 Dataran Tinggi Dieng,

JATENG


Energy (PGE) PT. Geo Dipa Energi (GDE) Dieng 60

7 Lahendong – Tompaso,

SULUT


Energy (PGE)


Energy (PGE) Lahendong 80

1.226

INSTALLED GEOTHERMAL POWER PLANT CAPACITY

Direktorat Jenderal



I. Introduction






OUTLINE

Direktorat Jenderal



GOVERNMENT POLICIES TO SCALE UP

GEOTHERMAL DEVELOPMENT IN INDONESIA

The Government of Indonesia (GoI) intends to accelerate and speed up the development of geothermal. In order to do so, the government intends to enhance the investment climate for 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 geothermal development Indonesia

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

3. Pricing Policy • Ministrial Regulation of MEMR No. 02/2011 on geothermal price structure. The MR

gives certainty on electricity price from geothermal power plant: - Electricity price as the result of a GWA tender, is represent as purchase price

by PT PLN in the Power Purchase Agreement, which is final and non negotiable

- Ceiling price for geothermal energy: US$ 9.7 cents/kWh - If the price exceeds US$ 9.7 cents/kWh, negotiations between Parties are

needed.

Direktorat Jenderal



3. Pricing Policy (cont’d)

• Fiscal 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.

• Currently the mechanism of Feed in Tariff for each GWA is being developed by

the GoI in order to make geothermal business more attractive to investors.

4. Access to Potential Geothermal Resources for Investors

• The Government offers a Preliminary Survey Assignment to third party (investor)

which provides “first right refusal”.

• The GoI establishes new GWAs and widely open opportunities for investors to

participate in the geothermal business through GWAs tendering mechanism


GEOTHERMAL DEVELOPMENT IN INDONESIA (cont’d)

Direktorat Jenderal



5. In order to accelerate the tender process of new GWAs, the policies which regulate bidding process are being revised in order to make the tender more simple, transparent and bankable.

6. Coordinating with all relevant parties to accelerate and simplify the permit

process.

7. Related to Forestry Issues, currently MEMR and Ministry of Forest have signed the

MoU regarding the acceleration of geothermal utilization permit within

production forest, protected forest, and conservation forest.

8. The government has issued a Presidential Decree that guarantees support for

investment in Geothermal Infrastructure Project (PR No. 13/2010 jo PR No.67/2005

and PR 78/2010) and Ministrial of Finance Regulation No. 139/2011 (PMK No.

139/2011) which guarantee the business feasibility of PT PLN for developing

electricity from renewable energy, coal, and gas through cooperation with

Independent Power Producers.


GEOTHERMAL DEVELOPMENT IN INDONESIA (cont’d)

Direktorat Jenderal



President Decree No 45/1991, No 49/1991,

and No 23/1992

Business structure based on JOC and ESC 34% of Net Operating Income (NOI), that had included all kinds of taxes and retribution, except personal tax. Project Management : Under Pertamina (JOC) and PLN (ESC) Project Type:

Total (Integrated) Project Partial Project

Law No. 27/2003

Business structure in the form of Permit: Geothermal Mining Permit Enterprise Permit for Electricity

Obligation to pay for taxes and royalty Project Management : Under Permit Holder Project Type: Total (Integrated) Project GWA holder will be granted as generally plan

operation

IMPLEMENTATION OF GEOTHERMAL POLICIES

Existing GWA New GWA

Direktorat Jenderal



OBTACLES OF NRE AND EC DEVELOPMENT

1. Price

Renewable energy is hard to develop due to its competition

with oil fuel which is subsidized (currently upto half of the cost).

2. Funding

Banks have not supported NRE funding because they do not

understand NRE activities clearly, so that NRE investment is still

difficult in getting funds.

3. Incentive

There is almost no incentive for both NRE consumer and

producer; In some other countries, producer get incentives.

4. Institutional and management of new energy has not completely fulfiled the law that causes legality doubtness.

5. Need significant breakthrough in new energy development

(currently treated in business as usual).

Direktorat Jenderal



EFFORTS OF NRE AND EC DEVELOPMENT 1. Price

a. Reducing oil fuel subsidy or subsidizing NRE. Subsidizing NRE is more possible to

be implemented.

b. Feed-in Tariff is determined by the government and should not be negotiated

by PT PLN (Persero). Feed-in Tariff is aimed at increasing investment through

price certainty since the beginning in order to minimize the risk. Regulations on

Feed-in Tariff have been published by the government and some others are

being finalized.

2. Funding

a. Need of green banking; Central Bank has had some initial preparations with

Directorate General of NREEC.

b. Need of government assurances.

3. Incentives

a. Need of incentives for producers, e.g. fiscal incentive.

b. Need of incentives for consumers.

c. Need of institution that assures supply change of renewable energy.

d. Need of an appointed state-owned company dedicated to NRE development

(there is always appointed state-owned company in every strategic

government program).

Direktorat Jenderal



No. GWA STATUS AMOUNT LOCATION

1 Production 6 North Sumatera: 1, West Java: 3, Central Java: 1, North Sulawesi: 1

2 Development Tender Finished 32 NAD: 1, North Sumatera: 2, West Sumatera: 1, Bengkulu: 1, Jambi: 1, South Sumatera: 2, Lampung: 3, Banten: 1, West Java: 6, Central Java: 3, East Java: 3, Bali: 1, North Sulawesi: 1, Maluku: 1, North Maluku: 1, NTB: 1, NTT: 3

Tender Process 3 NAD: 1, West Java: 1 and West Sumatera: 1

Tender Preparation

9 North Sumatera: 1, West Sumatera: 1, Lampung: 1, Lampung-South Sumatera: 1, Central Java: 1, Central Sulawesi:1, North Maluku: 1, Banten: 1, NTT: 1

Tender Failed 4 North Sumatera: 1, West Sumatera: 1,Central Sulawesi: 1, Gorontalo: 1

TOTAL 54

GWA STATUS

Direktorat Jenderal



21

No. PLTP/GWA Forest Category COD

1. Lumut Balai Protected Forest Area COD target Unit I 2014

2. Sarulla Production Forest Area COD target 2014 – 2016

3. Karaha Protected Forest Area COD target 2014

4. Telaga Ngebel Protected Forest Area COD target 2015

5. Bedugul Protected Forest Area COD target 2015

6. Gn. Ungaran Protected Forest Area COD target 2015

7. Gn. Rajabasa Protected Forest Area COD target 2015

8. Rantau Dedap Protected Forest Area COD target 2015

9. Gn. Tampomas Protected Forest Area COD target 2015

10. Hu'u Daha Protected Forest Area COD target 2015

11. Sorik Merapi Protected Forest Area COD target 2015

12. Sokoria Protected Forest Area COD target 2015

13. Tangkuban Perahu Protected and Production

Forest Area

COD target 2015

14. Blawen Ijen Protected and Production

Forest Area

COD target 2017

GWA LOCATION IN FOREST AREA

Direktorat Jenderal



22

No. PLTP/GWA Forest Category COD

15. Baturaden Protected Forest Area T2017

16. Wayang Windu Protected Forest Area COD target 2015

17. Patuha Protected Forest Area COD target unit I 2014

18. Dieng Protected Forest Area -

19. Kaldera D. Banten Production Forest Area COD target 2016

20. Cisolok Cisukarame Conservation Forest Area COD target 201 5

21. Liki P. Muaralaboh Conservation Forest Area COD target 2015

22. Sungai Penuh Conservation Forest Area COD target Unit I 2014

23. Hululais Conservation Forest Area COD target 2014

24. Kamojang 5 dan 6 Conservation Forest Area COD target unit 5 201 5

25. Sibayak Conservation Forest Area COD target 201 5

26. Iyang Argopuro Conservation Forest Area COD target 2016

27. Kotamobagu Conservation Forest Area COD target 2016

28. Darajat Conservation Forest Area -

GWA LOCATION IN FOREST AREA (cont’d)

©2012



No. GWA Dev. Plan Price per kWh IUP Issued IUP Holder COD

Target Status Obstacles And Progress

1 LIKI PINANGAWAN MUARALABOH, SUMBAR

220 9.4 ¢ USD 26 April 2010 PT. Supreme Energy Muaralaboh

2015 Exploration PPA has been signed

2 GN. RAJABASA, LAMPUNG

220 9.5 ¢ USD 14 Mei 2010 PT. Supreme Energy Rajabasa

2015 Exploration PPA has been signed, forestry permit

3 RANTAU DEDAP, SUMSEL

220 8.86 ¢ USD 29 Desember 2010 PT. Supreme Energy Rantau Dedap

2015 Exploration PPA negotiation, forestry permit

4 SORIK MARAPI-ROBURAN-SAMPURAGA, SUMUT

240 8.10 ¢ USD 2 September 2010 PT. Sorik Marapi Geothermal Power


5 BATURADEN, JATENG 220 9,63 ¢ USD April 2011 PT. Sejahtera Alam Energy 2015 Exploration PPA negotiation, forestry permit

6 JABOI, NAD 10 Rp. 1705 16 Februari 2010 PT. Sabang Geothermal Energi

2014 Exploration PPA negotiation, (power price exceed 9.7 cent USD /kWH)

7 CISOLOK CISUKARAME, JABAR

40 Rp. 630,00 19 Nopember 2009 PT. Jabar Rekind Geothermal


8 GN. TANGKUBAN PERAHU, JABAR

120 Rp. 533,60 26 Nopember 2009 PT. Tangkuban Perahu Geothermal Power


9 GN. TAMPOMAS, JABAR 45 Rp. 598,00 4 Nopember 2009 PT. Wijaya Karya Jabar Power


10 GN. UNGARAN, JATENG 110 8.09 ¢ USD 29 Juli 2010 PT. Giri Indah Sejahtera 2015 Exploration PPA negotiation, forestry permit

11 SOKORIA, NTT 30 Rp. 1.250,69 26 April 2010 PT. Sokoria Geothermal Indonesia


12 ATADEI, NTT 10 9.5 ¢ USD 10 Juli 2010 PT. Westindo Utama Karya 2014 Exploration PPA renegotiation

13 JAILOLO, MALUT 10 Rp. 1.727,54 09 Desember 2009 PT. Star Energy Geothermal Halmahera

2014 Exploration PPA negotiation, (power price exceed 9.7 cent USD /kWH)

14 SUOH SEKINCAU, LAMPUNG

220 6.9 ¢ USD 06 Desember 2010 PT. Chevron Geothermal Suoh Sekincau

2016 Exploration PPA negotiation

15 HU'U DAHA, NTB 20 9.65 ¢ USD 14 Juli 2010 PT. Pacific Geo Energy 2014 Exploration PPA negotiation, forestry permit

16 KALDERA DANAU BANTEN, BANTEN

110 8.39 ¢ USD 2011 PT. Synthesa Banten Geothermal


17 BLAWAN - IJEN, JATIM 110 8,58 ¢ USD 25 Mei 2011 PT. Medco Cahaya Geothermal


18 TELAGA NGEBEL, JATIM 165 7,55 ¢ USD 16 Juni 2011 PT. Bakrie Darmakarya Energi


19 GUCI, JATENG 55 9,09 ¢ USD 11 April 2011 PT. Spring Energy Sentosa 2015 Exploration PPA negotiation, forestry permit

GWA AFTER LAW NO. 27/2003

Potentially delayed On Progress Note:

©2012



No. GWA/Location License Holder/

Developer PLTP Unit Production

Installed Capacity

(MW) Price COD

1 Sibayak - Sinabung SUMUT PGE (Dizamatra)

Sibayak

(total 12 MW) Monoblok Steam 2 Rp. 1.147,03 1998

Unit 1 Steam 5 ȼ US$ 1.6 2008


2 Cibeureum - Parabakti,

JABAR

PGE/Chevron

Geothermal Salak,

Ltd

(JOC)

Salak

(total 377 MW) Unit 1 Steam 60 ȼ US$ 6.3 1994



Unit 4 electric 65 ȼ US$ 7.3 1997

Unit 5 electric 65 ȼ US$ 7.3 1997

Unit 6 Electric 65 ȼ US$ 7.3 1997

3 Pangalengan, JABAR PGE/Star Energy

Geothermal Wayang

Windu, Ltd (JOC)

Wayang Windu

(total 227 MW) Unit 1 Electric 110 ȼ US$ 6.3 2000


4 Kamojang - Darajat, JABAR

PGE

Kamojang





PGE/Chevron

Geothermal

Indonesia, Ltd (JOC)

Darajat




5 Dataran Tinggi Dieng,

JATENG PT. Geodipa Energy

Dieng

(total 60 MW) Unit 1 Electric 60 ȼ US$ 5.15 2002

6 Lahendong - Tompaso,

SULUT PGE

Lahendong

(total 80 MW) Unit 1 Electric 20 Rp. 194,07 2001

Unit 2 Electric 20 Rp. 205,66 2008

Unit 3 Electric 20 Rp. 205,66 2009

Unit 4 Steam 20 ¢ US$ 4.3 2011

Total 1.226 MW

EXISTING GWA (PRODUCTION)


©2012



No. GWA / Location Lisence Holder

/ Developer Dev. Plan Unit Production Dev. Capacity (MW) Harga (2012)

COD

(Target) Obstacle

1 Sarulla, Sumut Konsorsium

Sarulla

330 Unit 1 Electric 110 ¢ US$ 6.79 2013 JOC amandement (asset ownership) and

direct payment

Unit 2 Electric 110 ¢ US$ 6.79 2014


2 Ulubelu, Lampung PGE 220 Unit 1 Steam 55 ¢ US$ 4.2 2012 -

Unit 2 Steam 55 ¢ US$ 4.2 2012



3 Kotamobagu, Sulut PGE 80 Unit 1 Steam 20 ¢ US$ 4.3 2014 Prospect area located in conservation area

Unit 2 Steam 20 ¢ US$ 4.3 2014

Unit 3 Steam 20 ¢ US$ 4.3 2015

Unit 4 Steam 20 ¢ US$ 4.3 2015

4 Lumut Balai, Sumsel PGE 220 Unit 1 Electric 55 ¢ US$ 7.53 2013 -




5 Karaha Bodas,

Jabar

PGE 140 Unit 1 Electric 1 x 30 ¢ US$ 8.25 2013 Forestry permit

Unit 2 Electric 2 x55 - 2016

6 Hululais, Bengkulu PGE 110 Unit 1 Steam 55 ¢ US$ 4.3 2013 GWA location adjacent to Taman Nasional

Kerinci Seblat (Conservation area) Unit 2 Steam 55 ¢ US$ 4.3 2014

7 Sungai Penuh,

Jambi PGE 110

Unit 1 Steam 55 ¢ US$ 4.3 2013 GWA location adjacent to Taman Nasional

Kerinci Seblat (Conservation area), drilling

preparation . Unit 2 Steam 55 ¢ US$ 4.3 2014

8 Tulehu, Maluku PT PLN 20 Unit 1 Electric 20 - 2014 Well potential less productive

9 Tangkuban Perahu WSS 60 Unit 1 Electric 30 - 2015

PPA negotiation Unit 2 Electric 30 - 2016

10 Cibuni, Jabar KJK Teknosa 10 Unit 1 Electric 10 - 2013 Licence expired , internal law issues

11 Lahendong -

Tompaso, SULUT PGE 60

Unit 5 Electric 20 ¢ US$ 8.25 2013 -

Unit 6 Electric 20 ¢ US$ 8.25 2013 -

12 Iyang Argopuro,

Jatim - Unit 1 - - - - GWA location inside conservation area

Total 1.335


EXISTING GWA (NOT YET IN PRODUCTION)

Direktorat Jenderal



I. Introduction






OUTLINE

Direktorat Jenderal



• Feed in Tariff (FIT) is a Government policy in purchasing power to

stimulate the utilization of renewable energy.

• In order to speed up the utilization of geothermal, the Government will

set the price of electricity from geothermal power plant and will no

longer be negotiated by PLN. The FIT mechanism determined with

consideration of:

1. Availability of energy resources in an area;

2. Environmental carrying capacity;

3. Economies.

• Feed-in Tariff will be applied for new contracts and for extensions or

capacity additions.

• This mechanism will reduce the main obstacle in geothermal

development related to price uncertainty that usually requires a long

time for negotiation.

• The concept proposed by using a non-uniform rate and will be

determined per region or per island.

GEOTHERMAL FEED-IN TARIFF MECHANISM

Direktorat Jenderal



No Area

Price

Information (cent US$/kWh)

High Voltage Medium Voltage

1 Sumatera 10 11,5 Available for other energy

resources

2 Jawa, Madura and Bali 11 12,5 Environmental carrying

capacity

3 Sulawesi Selatan 12 13,5 • Available for other energy

resources • Economies

4 Sulawesi Utara 13 14,5 Economies

5 NTB and NTT 15 16,5 • Not available for other

energy resources • Local power production cost

6 Maluku and Papua 17 18,5 Local power production cost

GEOTHERMAL FEED-IN TARIFF (CONCEPT)

Direktorat Jenderal



I. Introduction






OUTLINE

Direktorat Jenderal



Presidential Regulation No. 04/2010 on Assignment to PT. PLN to Accelerate Power

Plant Development Using Renewable Energy, Coal and Gas

MEMR Regulation No. 01/2012 as revised of Ministerial Regulation No. 15/2010 on

Projects 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

- 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

GEOTHERMAL DEVELOPMENT TARGET

(2010 - 2014)

Direktorat Jenderal



GEOTHERMAL POWER PLANT PROJECTS

INCLUDED IN CRASH PROGRAM PHASE II

NO.GEOTHERMAL POWER

PLANT PROJECTSTATUS PROVINCE

ESTIMATION

OF CAPACITY

(MW)

INSTALLED

CAPACITY

2014 (MW)

REQUIRED

FINANCING

2014

(US$

1 Sungai Penuh Existing WKP Jambi 2x55 110 330

2 Hululais Existing WKP Bengkulu 2x55 110 330

3 Kotamobagu 1 and 2 Existing WKP North Sulawesi 2x20 40 120

4 Kotamobagu 3 and 4 Existing WKP North Sulawesi 2x20 40 120

5 Sembalun Open Area West Nusa Tenggara 2x10 20 60

6 Tulehu Existing WKP Maluku 2x10 20 60

7 Tangkuban Perahu I New WKP West Java 2x55 110 330

8 Kamojang 5 and 6 Existing WKP West Java 1 x30 1 x60 90 270

9 Ijen New WKP East Java 2x55 110 330

10 Iyang Argopuro Existing WKP East Java 1 x55 55 165

11 Ngebel New WKP East Java 3x55 165 495

12 Gunung Endut New WKP Banten 1 x55 55 165

13 Rawa Dano New WKP Banten 1 x 110 110 330

14 Cibuni Existing WKP West Java 1 x 10 10 30

15 Cisolok-Cisukarame New WKP West Java 1 x50 50 150

16 Karaha Bodas Existing WKP West Java 1 x30 2x55 140 420

17 Patuha Existing WKP West Java 3x60 180 540

18 Tampomas New WKP West Java 1 x45 45 135

19 Tangkuban Perahu II Existing WKP West Java 2x30 60 180

20 Wayang Windu Unit 3 and 4 Existing WKP West Java 2x 110 220 660

21 Gunung Ciremai New WKP West Java 2 x 55 110 330

22 Baturaden New WKP Central Java 2x 110 220 660

23 Dieng Existing WKP Central Java 1 x55 1 x60 115 345

24 Guci New WKP Central Java 1 x55 55 165

25 Ungaran New WKP Central Java 1 x55 55 165

26 Seulawah Agam New WKP Aceh 1X55 55 165

NO.GEOTHERMAL POWER

PLANT PROJECTSTATUS PROVINCE

ESTIMATION

OF CAPACITY

(MW)

INSTALLED

CAPACITY

2014 (MW)

REQUIRED

FINANCING

2014

(US$

27 Jaboi New WKP Aceh 2x5 10 30

28 Sarulla 1 Existing WKP North Sumatera 3x 110 330 990

29 Sarulla 2 Existing WKP North Sumatera 2x55 110 330

30 Umbul Telumoyo New WKP Central Java 1 x55 55 165

31 Simbolon Samosir Open Area North Sumatera 2x55 110 330

32 Sipoholon Ria-Ria New WKP North Sumatera 1 x55 55 165

33 Sorik Marapi New WKP North Sumatera 240 (Total) 240 720

34 Muaralaboh New WKP West Sumatera 2x 110 220 660

35 Bonjol New WKP West Sumatera 3x55 165 495

36 Lumut Balai Existing WKP South Sumatera 4x55 220 660

37 Rantau Dadap New WKP South Sumatera 2x110 220 660

38 Rajabasa New WKP Lampung 2x110 220 660

39 Ulubelu 3 and 4 Existing WKP Lampung 2x55 110 330

40 Suoh Sekincau New WKP Lampung 4x55 220 660

41 Wai Ratai Open Area Lampung 1 x55 55 165

42 Danau Ranau New WKP Lampung 2x55 110 330

43 Lahendong 5 dan 6 Existing WKP North Sulawesi 2x20 40 120

44 Bora Open Area Central Sulawesi 1 x5 5 15

45 Marana/Masaingi New WKP Central Sulawesi 2x10 20 60

46 Hu'u New WKP West Nusa Tenggara 2x10 20 60

47 Atadei New WKP East Nusa Tenggara 2 x2,5 5 15

48 Sokoria New WKP East Nusa Tenggara 3x5 15 45

49 Mataloko New WKP East Nusa Tenggara 1 x5 5 15

50 Jailolo New WKP North Maluku 2x5 10 30

51 Songa Wayaua New WKP North Maluku 1 x5 5 15

4.925 14.775TOTAL PLANNED INSTALLED CAPACITY

(BASED ON MEMR REGULATION NO. 01/2012)

Note: cost to develop 1MW=US$ 3 Million

Direktorat Jenderal



No Development 2010 2011 2012 2013 2014 2015

Geothermal Development

1. Added Capacity (MW) 37 115 3 375 1.797

2. Installed Capacity (MW) 1.189 1.226 1.341 1.344 1.719 3.516

GEOTHERMAL POWER PLANT DEVELOPMENT

2010 – 2015

Note:

- CF Geothermal Power Plant = 90%

©2012



No Geothermal Working Area

Developer Current Status Development (MW)

Issued < 2003 Issued > 2003 2012 2013 2014 2015

1 Ulubelu PGE Development of Unit 1 & 2 (110 MW) 110 110

2 Ulumbu PLN Commisioning Unit 1 & 2 (5 MW) 5

3 Mataloko Finalizing, commissioning 1,7 MW 2.5

4 Pangalengan

Geo Dipa In developing 55 55

5 PGE-StarEnergy Operates 2 Unit (227 MW), extra 187 MW 60 127

6 Cibuni KJK Teknosa Exploiting 10

7 Sarulla PGE-SOL Asset ownership finalization, amandement JOC & ESC 110

8 Jaboi PT Sabang Geo Energy Exploration 10

9 Cisolok-Cisukarame PT Jabar Rekind Exploration 40

10 Tampomas PT Wijaya Karya Jabar Exploration 45

11 Jailolo PT Star Energy Hal Exploration 10

12 Hu'u Daha PT Pacific Geo Energy Exploration 20

13 Sokoria PT Sokoria Geo Ind Exploration 10

14 Atadei PT Westindo Utama Exploration 5

15 Lahendong PGE Operates 4 Unit (80 MW), extra 40 MW 40

16 Kamojang-Darajat PGE Operates 3 Unit (200 MW) from Kamojang, extra 30 MW 30

17 Lumut Balai PGE Exploration 110

18 Karaha PGE Exploiting 30

19 Hululais PGE Exploiting 55

20 Sungai Penuh PGE Exploration 55

21 Tulehu PLN Exploration 20

22 Liki Pinawangan Muaralaboh PT Supreme E M Negotiating PPA & Govt. Guarantee 220

23 Rantau Dadap PT Supreme E R D Negotiating PPA & Govt. Guarantee 220

24 Gn. Rajabasa PT Supreme E R Negotiating PPA & Govt. Guarantee 220

25 Tangkuban Perahu PT Tangkuban Perahu Exploration 110

26 Dieng Geo Dipa Operates 60 MW (Unit 1) 110

27 T. Perahu Ciater PT WSS Exploration 30

28 Marana GWA tender failed 20

29 Songa Wayaua GWA tender process 5

30 Sembalun GWA establishment process 10

31 Buyan Bratan (Bedugul) PGE-Bali Energy Awaiting Governor’s recommendation 30

32 Sorik Merapi-Roburan PT Sorik Merapi Geo Negotiating PPA 80

33 Guci PT Spring Energi Sentosa Negotiating PPA 55

34 Baturaden PT Sejahtera Alam Energi Negotiating PPA 55

Total development until 2015 (MW) 115 3 375 1797

GEOTHERMAL POWER PLANT DEVELOPMENT UNTIL 2015

Direktorat Jenderal



GEOTHERMAL ACTIVITIES IN INDONESIA

Direktorat Jenderal



I. Introduction






OUTLINE

Direktorat Jenderal



- The development of 4,925 MW electricity from Geothermal in 10,000 MW

Crash Program Stage II up to the year 2014 requires more than US$ 14,000

millions for the investment.

- The development plan of 12,000 MW Geothermal Power Plant up to the

year 2025, international supports are needed.

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

- Other business opportunities in geothermal sector:

Geothermal direct use;

Low temperature geothermal potential;

Small scale power plant;

CER under CDM Scheme;

Services company to support the core business of geothermal.

Partners and Investors are welcomed to be parts of Indonesia development

as the largest geothermal producer.

INVESTMENT OPPORTUNITIES

Direktorat Jenderal



Go Green Indonesia ! green energy, future energy

Jalan Jenderal Gatot Subroto, Kav. 49 Jakarta 12950; Telp: 021-52904235; 5250575; Faks: 021-25529106; 25529212

Email: [email protected] ; [email protected]

MINISTRY OF ENERGY AND MINERAL RESOURCES REPUBLIC OF INDONESIA

DIRECTORATE GENERAL OF NEW, RENEWABLE ENERGY, AND ENERGY CONSERVATION

Thank You

www.ebtke.esdm.go.id

Direktorat Jenderal



Road Map of Geothermal Development 2006 – 2025

Current Condition

2006

852 MW

(Produksi)

2008 2012 2016 2020

2000 MW 3442 MW 4600 MW 6000 MW 9500 MW

(Target)

1148 MW

Existing WKP

1442 MW

Existing WKP

1158 MW

Existing WKP

+ New WKP

1400 MW

New WKP

3500 MW

New WKP

2025

1226 MW

(based on Presidential Decree No. 5/2006 on National Energy Policy)

12.000 MW

Energy Vision 25/25

Direktorat Jenderal



STRATEGY FRAMEWORK

• Energy diversification: to increase the utilization of new renewable energy.

• Geothermal power plants

• Biodiesel

• Municipal solid waste power plants

• Energy conservation: to have the sectors of household, commercial, industry, and

transportation use the energy efficiently.

• Mandatory energy management for energy user > 6000 TOE/years

• Labelization of energy efficiency products

• Sosialization of energy efficiency

• Transformation Energy management : to change the paradigm of energy management

with orientation to use more NRE, also to develop small scale NRE with local resources.

• Development of Self Suficient Energy Village (Desa Mandiri Energi, DME)

• Micro and pyco Hydro Powers

• Solar Energy (Photo Voltaic) Home System (100 W)

• Bio Digester

POLICY INSTRUMENTS

Fiscal

• Fiscal incentive for NRE development

• Pricing for new renewable energy (Feed-in Tariff/FIT)

• Renewable Portfolio Standard (RPS)

STRATEGY FRAMEWORK AND POLICY INSTRUMENTS

Direktorat Jenderal



MINISTRY OF FINANCE REGULATION NUMBER 21/PMK.011/2010 Regulation of tax and customs facility for renewable energy resources utilization activities

Income Tax

FINANCIAL INSTRUMENTS

SUPPORT

Value Added

Tax

• Reduced net income for

30% of total investment

• accelerated depreciation

• Imposition

of Income Tax on dividen

d paid

to Foreign Taxable at 10

%

• compensation for losses

in certain circumstances

Exemptions of VAT

for Taxable Goods,

machinery and

equipment for RE

utilization (not

included spare

parts)

Regulated in State

Annual Budget Law

and its

implementing

regulations

Import Duty Tax Borne by

Government

Exemptions for Import

Duty of

Goods and

Machinery for

development and

capital investment

Capital Goods Imports

for construction and

development of

electricity industry

Direktorat Jenderal



MINISTRY OF FINANCE REGULATION NUMBER 130/PMK.011/2011 Concerning on Provision of Exemption Facilities or Reduction of Income Tax

facilities:

EXEMPTION OR REDUCTION OF

CORPORATE INCOME TAX

Minister of Finance may provide facilities Corporate Income Tax exemption or reduction for a period EXCEED

predetermined period of time

REDUCTION OF CORPORATE INCOME TAX

50% of Income Tax Payable for 2 tax yearh

After the end of Corporate Income Tax exemption facility

EXEMPTION OF CORPORATE INCOME TAX

5 - 10 tax year

CORPORATE

TAXPAYERS

• PIONEER INDUSTRIES

• Having a new investment plan min. IDR 1 trillion

• Placing funds in the Indonesian banking min 10% from the total capital investment plan

• Existed as ENTITY INDONESIA

• Industry of Basic Metals Manufacutre

• Industry of Oil Refining and / or Basic Organic

Chemicals sourced from Oil and Natural Gas

• Industry of Machinery

• INDUSTRY OF RENEWABLE RESOURCES FIELD

• Industry of Communications Equipment

PIONEER INDUSTRIES

*) The facility can be utilized if:

1. Had executed the entire capital investment

2. Has been produced commercially

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