Geothermal Investment Opportunities in Indonesia

Kementerian Energi dan Sumber Daya Mineral Direktorat Jenderal Energi Baru Terbarukan dan Konservasi Energi

DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION MINISTRY OF ENERGY AND MINERAL RESOURCES

Geothermal Investment Opportunities in Indonesia by: Sugiharto Harsoprayitno, M.Sc Director for Geothermal

Thursday, July 14, 2011 © EBTKE KESDM - 2011


Geothermal Potency in Indonesia • Potential Geothermal Indonesia is the largest in the world, 40% of world reserves, amounting to 29.038 MW, spread over 276 locations • Installed Capacity 1,189 MW (4% of whole potency), consists of field: Sibayak 12 MW, Salak Mt. 375 MW, Wayang Windu 227 MW, Kamojang 200 MW, Darajat 255 MW, Dieng 60 MW and Lahendong 60 MW • Geothermal Road Map Target 9,500 MW in 2025

© EBTKE KESDM - 2011


GEOTHERMAL POTENTIAL MAP

No.

Island

Number of Loc.

1 2 3 4 5 6 7 8

Sumatera Java Bali Nusa Tenggara Kalimantan Sulawesi Maluku Papua T otal

86 71 5 22 8 55 26 3 276

Potency (MW) 13,516 10,092 296 1,471 115 2,519 954 75 29,038

Install Capacity (MW) 12 1,117

Source : Geological Survey, MEMR(2010)

Note: 60

1,189

Preliminary Survey

Ready to Developad

Detail Survey

Already Developed © EBTKE KESDM - 2011


INSTALLED GEOTHERMAL POWER PLANT CAPACITY 2010 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)


Sibayak

12

2

Cibeureum – Parabakti, JABAR


KOB - Chevron Geothermal Salak, Ltd (CGS)

Salak

375

3

Pangalengan, JABAR


KOB - Star Energy Geothermal Wayang Windu, Ltd (SEGWWL)

Wayang Windu

227

4

Kamojang – Darajat, JABAR



Kamojang

200

5

Kamojang – Darajat, JABAR


KOB - Chevron Geothermal Indonesia, Ltd (CGI)

Darajat

255

6

Dataran Tinggi Dieng, JATENG


PT. Geo Dipa Energi (GDE)

Dieng

60

7

Lahendong – Tompaso, SULUT



Lahendong

60 1.189


4


REGULATIONS ON GEOTHERMAL ENERGY I. Law No. 27/2003 on Geothermal II. Government Regulation No. 59/2007 jo Government Regulation No. 70/2010 on

Geothermal Business Activities III. Government Regulation No. 62/2008 jo No. 1/2007 on Income Tax Facilities IV. Presidential Regulation No. 4/2010 on Assignment to PT. PLN to Accelerate Power Plant

Development Using Renewable Energy, Coal and Gas V. Ministerial Regulations MEMR Regulation No. 11/2008 on Mechanism for Determining Geothermal Working

Area MEMR Regulation No. 02/2009 on The Guidelines for Geothermal Pre-Survey

Assignment MEMR Regulation No. 05/2009 on The Guidelines for Electricity Purchasing Price by PT.

PLN from Cooperation and Other Business Entities MEMR Regulation No. 11/2009 on The Guidelines for Geothermal Enterprises MEMR Regulation No. 31/2009 on Purchasing Power by PT. PLN from Power Plant using

Small – Medium Scale of Renewable Energy MEMR Regulation No. 15/2010 on Projects List of Power Plant Accelerated Development

using Renewable Energy, Coal and Gas as well as Related Transmission MEMR Regulation No. 2/2011 on an Assignment to PLN to buy electricity from

geothermal power plant



GOVERNMENT POLICIES TO SCALE UP GEOTHERMAL DEVELOPMENT IN INDONESIA 1. Presidential Regulation No. 04/2010 jo Ministerial Regulation No. 15/2010 (2nd

Stage of 10,000 MW Crash Program) in order to speed up the development of geothermal power to the amount of 3,967 MW by the year 2014 which will require a total of US$ 12 Billions. 2. Government provide fiscal incentives for geothermal:

■ Income Tax Facilities (Based on Government Regulation No. 62/2008 jo No. 1/2007) which provide: - 30% (thirty percent) net income tax deduction of the total Investment, for 6 (six) years, 5% (five percent) annually - Income tax charge for dividend paid to Foreign Tax Subject shall be 10% (ten percent), or lower tariff according to effective Double Taxation Avoidance Agreement - Compensation of financial loss for more than 5-10 years ■ Custom Duties Exemption for Importing Items (based on MoF Decree No. 177/PMK.011/2007) ■ Value Added Tax of Import Items Covered by Government (based on MoF Decree No. 22/PMK.011/2011) © EBTKE KESDM - 2011


GOVERNMENT POLICIES TO SCALE UP GEOTHERMAL Continue …... DEVELOPMENT IN INDONESIA 3. Government support in the form of reducing upstream geothermal risk by providing revolving funds (for exploration and FS), particularly for the Eastern parts of Indonesia. 4. The GoI is in process of establishing a State-Owned Company in the geothermal business to support its development. 5. To accelerate geothermal development, the Government offers a Preliminary Survey Assignment to third part (investor) which provides “first right refusal”. 6. The Government has determined Regulations on Geothermal Price Structure (based on MEMR Regulation No. 02/2011) : • Purchase price of electricity by PT PLN from a Geothermal Power Plant, as the result of a GWA tender, is used for the Power Purchase Agreement, the electricity price is final and non negotiable • Ceiling price for geothermal energy: US$ 9.7 cents/kWh 7. In order to enhance certainty in geothermal investment, the government has set a Standard Power Purchase Agreement. © EBTKE KESDM - 2011


Implementation of Geothermal Policies Existing GWA

New GWA

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

Law No. 27/2003

Business structure based on JOC and ESC

Business structure in the form of Permit:

34% of Net Operating Income (NOI), that had

Obligation to pay for taxes and royalty

Project Management : Under Pertamina (JOC)

Project Management :Under Permit Holder

Project Type:

Project Type:

and No 23/1992

Geothermal Mining Permit Enterprise Permit for Electricity

included all kinds of taxes and retribution, except personal tax. and PLN (ESC)

Total (Integrated) Project Partial Project

Total (Integrated) Project WKP holder will be granted as generally plan operation


8


Development of Geothermal Energy Western Part of Indonesia

Eastern Part of Indonesia

Big geothermal potential → development in mid-big scale project

Small geothermal potential → development in small scale project

Existing projects as brown fields → detail data is unavailable

Most of the area are green fields → detail data is not available

Conducive investment condition is enough → attractive to investor (B to B approach)

Not attractive to investor. Not only need conducive investment condition, but also funding support from government Government support in the form of reducing upstream geothermal risk (GoI allocates budget for exploration and FS)


9


GEOTHERMAL VALUE CHAIN (Current Regulations)

(S-1)

(S-2)

Surve y APBN

Rep.

Evaluati on

GWA/WKP Tendering (S-3)

WKP

IUP Issuance (S-4)

(S-5)

(S-6)

FS

Exploitat ion

GWA/WKP Determination

Explorat ion

MEMR

Potential Map

Pre-Survey

Electricity Price

(S-0)

BUSINESS STADIUM (S-X) Report of Tendering Process

Units

Geothermal Potential

Potential/ Stadium

(S-7)

(S-8)

(S-9)

Production/ Utilization

(S-10)

IUP-N

WKP-N

(S4-N)

(S3-N) Tender Winner

Survey APBD Prov.

WKP-P

Pemda Kab./ Kota

Survey APBD Kab./ Kota

WKP-K

Corporation

IUP-P

(S3-P) Tender Winner

(S4-P)

The Golden Bridge

Prov. Gov.

IUP-K

(S3-K)

(S4-K)

Tender Winner

Assignment Other Parties

Assignment

PLN

PPA © EBTKE KESDM - 2011


Road Map of Geothermal Development 2006 – 2025 (based on Presidential Decree No. 5/2006 on National Energy Policy)

2006

2008

852 MW (Produksi)

1148 MW Existing WKP

2000 MW

1442 MW Existing WKP

2012

2016

2020

2025

3442 MW

4600 MW

6000 MW

9500 MW (Target)

1158 MW Existing WKP + New WKP

1400 MW New WKP

3500 MW New WKP

1189 MW Current Condition

5156 MW Plus 2nd Phase Crash Program Scenario



STRATEGICAL TARGET FOR GEOTHERMAL DEVELOPMENT 2010 S.D 2014 Presidential Regulation No. 04/2010 on Assignment to PT. PLN to Accelerate Power Plant

Development Using Renewable Energy, Coal and Gas MEMR 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 : 645 MW Development for not yet in production on Existing Field : 1535 MW New Development Geothermal Working Area : 1787 MW Total of Geothermal Development 3967 MW



Geothermal Contribution on 2nd Phase 10,000 MW Power Development Acceleration Program (Based on Ministerial Decree No. 15/2010 on Projects List of Power Plant Accelerated Development using Renewable Energy, Coal and Gas as well as Related Transmission)

Additional Installed Capacity of Geothermal Power Plant up to 2014 is 3,967 MW

Existing GWA→ → 2180 MW New GWA → 1787 MW

Java → 1970 MW Outside Java → 1997 MW

Total investment needed for achieving this target is about 12 Billion USD (with assumption, development cost of 1 MW = 3 Million USD)

With developing 3,967 MW Geothermal Power Plant until 2014, could reduce emission about 24 Million ton CO2/Year (6,000 t CO2e/MW/Year) © EBTKE KESDM - 2011


INVESTMENT OPPORTUNITIES - Development of 3,967 MW electricity from Geothermal in 10,000 MW Crash Program Stage II up to the year 2014 is required more than US$ 12,000 millions for the investment. - 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 %; - Business opportunities in geothermal sector: Geothermal direct use; Low temperature geothermal potential; Small scale power plant. Partners and Investors are welcomed to be parts of Indonesia development as the largest geothermal producer.



DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION MINISTRY OF ENERGY AND MINERAL RESOURCES

Jalan Jenderal Gatot Subroto, Kav. 49 Jakarta 12950 Telp/Faks : 021-5250575 www.ebtke.esdm.go.id www.energiterbarukan.net © EBTKE KESDM - 2011


Geothermal Power Plant Projects included in Crash Program Phase II Geothermal Power Status NO Plant Project 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Seulawah Agam Jaboi Sarulla 1 Sarulla 2 Sorik Merapi Muaralaboh Lumut Balai Rantau Dadap Sungai Penuh Hululais Rajabasa Ulubelu 3 dan 4 Rawa Dano Kamojang 5 & 6 Cibuni Cisolok-Cisukarame Darajat Karaha Bodas Patuha Salak Tampomas Tangkuban Perahu I

Province

New WKP Aceh New WKP Aceh Existing WKP North Sumatera Existing WKP North Sumatera New WKP North Sumatera New WKP West Sumatera Existing WKP South Sumatera New WKP South Sumatera Existing WKP Jambi Existing WKP Bengkulu New WKP Lampung Existing WKP Lampung New WKP Banten Existing WKP West Java Existing WKP West Java New WKP West Java Existing WKP West Java Existing WKP West Java Existing WKP West Java Existing WKP West Java New WKP West Java New WKP West Java

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

Estimation Installed Required Geothermal Power Status of Capacity Capacity Financing 2014 NO Plant Project (MW) 2014 (MW) (US$ Million) 1x55 1x7 3x110 2x55 1x55 2x110 4x55 2x110 2x55 2x55 2x110 2x55 1x110 1x40 & 1x60 1x10 1x50 2x55 1x30 & 2x55 3x60 1x40 1x45 2x55

55 7 330 110 55 220 220 220 110 110 220 110 110 100 10 50 110 140 180 40 45 110

165 21 990 330 165 660 660 660 330 330 660 330 330 300 30 150 330 420 540 120 135 330

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

Province

Estimation Installed Required of Capacity Capacity Financing 2014 (MW) 2014 (MW) (US$ Million)

Tangkuban Perahu II Existing WKP West Java 2x30 Wayang Windu Existing WKP West Java 2x120 Batu Raden New WKP Central Java 2x110 Dieng Existing WKP Central Java 1x55 & 1x60 Guci New WKP Central Java 1x55 Ungaran New WKP Central Java 1x55 Ijen New WKP East Java 2x55 Iyang Argopuro Existing WKP East Java 1x55 Wilis/Ngebel New WKP East Java 3x55 Lahendong 5 dan 6 Existing WKP North Sulawesi 2x20 Kotamobagu 1 dan 2 Existing WKP North Sulawesi 2x20 Kotamobagu 3 dan 4 Existing WKP North Sulawesi 2x20 Bora Open Area Central Sulawesi 1x5 Merana/Masaingi New WKP Central Sulawesi 2x10 Huu New WKP West Nusa Tenggara 2x10 Sembalun Open Area West Nusa Tenggara 2x10 Atadei New WKP East Nusa Tenggara 2x2,5 Sukoria New WKP East Nusa Tenggara 2x2,5 Tulehu Existing WKP Maluku 2x10 Jailolo New WKP North Maluku 2x5 Songa Wyaua New WKP North Maluku 1x5 Total Development of Geothermal Power Plant until 2014

60 240 220 115 55 55 110 55 165 40 40 40 5 20 20 20 5 5 20 10 5 3967


180 720 660 345 165 165 330 165 495 120 120 120 15 60 60 60 15 15 60 30 15 11.901


No. 1 2

3

GWA Sibayak-Sinabung Cibeureum - Parabakti (Gn. Salak) Pengalengan

GWA before Law No. 27/2003

IUP Holder

Field

Developer

Potency (MW)

Installed (MW)

PT. PGE

Sibayak

PT. PGE

124

12

PT. PGE

Gn. Salak

CGS, Ltd

952

375

Wayang Windu

Star Energy Geothermal Wayang Windu

400

227

Patuha

PT. Geo Dipa Energi

706

-

PT. PGE

4

Kamojang-Darajat

PT. PGE

Kamojang Darajat

PT. PGE CGI, Ltd

855 610

200 255

5

Dieng

PT. PGE

Dieng

PT. Geo Dipa Energi

780

60

6 7

Lahendong-Tompaso Sibual-Buali

PT. PGE PT. PGE

Lahendong Sarulla

PT. PGE SOL

358 1146

60 -

8

Hululais - Tambang Sawah

PT. PGE

Hulu Lais

PT. PGE

873

-

9 10 11 12 13

Lumut Balai Sungaipenuh Ulubelu Karaha-Cakrabuana Buyan Bratan (Bedugul)

PT. PGE PT. PGE PT. PGE PT. PGE PT. PGE

Lumut Balai Sungai Penuh Ulubelu Karaha Bodas Bedugul

PT. PGE PT. PGE PT. PGE PT. PGE Bali Energy, Ltd

1066 208 556 725 276

-

14

Ulumbu

PT. PLN (Persero)

Ulumbu

PT. PLN (Persero)

199

-

15

Tulehu

PT. PLN (Persero)

Tulehu

PT. PLN (Persero)

100

-

16

Cibuni

KJK Teknosa

Cibuni

KJK Teknosa

140

-

17 18

Iyang-Argopuro Kotamobagu

PT. PGE PT. PGE

Iyang Argopuro Kotamobagu

PT. PGE PT. PGE

295 410

-

19

Ciater

PT. Wahana Sembada Sakti

Ciater

PT. Wahana Sembada Sakti

90

-

10,869

1,189

Total



New GWAs Offered Through Tender Process (after Law No. 27/2003 on Geothermal) As Total Project Scenario, IPP Scheme

NO

FIELD

REGENCY

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Seulawah agam Jailolo T elaga Ngebel Ungaran Mt. T ampomas Mt. Cisolok Cisukarame T angkuban Perahu Mt. Jaboi Sokoria T alang Mt. Blawan Ijen Hu'u Daha Sipaholon Ria-ria Bukit Kili Sorik Marapi Roburan Marana Songa Wayaua Atadei Suwawa Kaldera Danau Banten Rajabasa Mt. Liki Pinangawan Suoh-Sekincau Rantau Dadap Guci Baturaden

Aceh Besar West Halmahera Ponorogo and Madiun Semarang and Kendal Sumedang and Subang Sukabumi Subang, Bandung and purwakarta Sabang Ende Solok Bondowoso, Banyuwangi and Situbondo Dompu Noth Tapanuli Solok Mandailing Natal Donggala South Halmahera Lembata Bone Bolanga and Gorontalo Serang and Pandeglang South Lampung Muara Laboh, Solok Selatan West Lampung Muara Enim, Lahat dan Pagar Alam T egal, Brebes and Pemalang Tegal, Brebes, Pemalang, Banyumas and

TOTAL

PROVINCE

Nangroe Aceh Darusallam North Maluku East Java Central Java West Java West Java West Java Nangroe Aceh Darusallam East Nusa Tenggara West Sumatera East Java West Nusa Tenggara North Sumatera West Sumatera North Sumatera Central Sulawesi North Maluku East Nusa Tenggara Gorontalo Banten Lampung West Sumatera Lampung South Sumatera Central Java Purbalingga Central Java

As of 10 July 2011 DEVELOP MENT TA RGETS (MW)

STATUS OF TENDER PROCESS

160 On Going 75 Finished 120 Finished 100 Finished 50 Finished 45 Finished 100 Finished 50 Finished 30 Finished 36 Preparation 270 Finished 65 Finished 75 Re-Tender 83 Re-Tender 200 Finished 36 Re-Tender 140 Preparation 40 Finished 110 Re-Tender 115 Finished 91 Finished 400 Finished 230 Finished 106 Finished 79 Finished 175 Finished © EBTKE KESDM - 2011 2981


GWA Determination Plan - 2011 NO

1 2 3 4 5 6 7 8 9

Area

Bonjol * Danau Ranau * Mataloko * Ciremei * Gn. Endut * Sembalun Wai Ratai Simbolon Samosir Telomoyo

Province

West Sumatera South Sumatera East Nusa Tenggara West Java Banten West Nusa Tenggara Lampung North Sumatera Central Java TOTAL

Potency (MWe)

Required Financing (US$ Million)

200 210 63 150 80 120 194 225 92

600 630 189 450 240 360 582 675 276 4,002

*) : determined April 21, 2010



Areas offered for Pre-Survey Assignment (Announcement of Director General of New Renewable Energy and Energy Conservation No. 104Pm/30/DJE/2011) No.

Location

Regency

Province

1.

Sungai Betung

Kerinci and Pesisir Selatan

Jambi and West Sumatera

2.

Sungai Tenang

Merangin

Jambi

3.

Ciseeng

Bogor and Lebak

West Java and Banten

4.

Malawa

Maros, Pangkajene Kepulauan, Bone and Barru

South Sulawesi

5.

Gn. Dua Saudara

Bitung

North Sulawesi

6.

Ulumbu

Manggarai

NTT

7.

Gn. Gede/Pangrango

Bogor, Sukabumi, and Cianjur

West Java



FLOW OF GEOTHERMAL BUSINES PROSES Local Government

MEMRE

REGULATOR

Power Purchaser (PLN)

Preliminary Survey

GWA

GWA Auction

Selling Price*)

Winner

Recommendation

BUSINESS ENTITY

Related Agencies

IUP Holder

1

Who

has th e Sen der??

Selling price approval

Buyer Candidate

Selling price agreement*)

2

Local gov. Permit yes

In Forrest?

Forestry Permit

no EXPLORATION

In Forrest?

yes Forestry Permit

no EXPLOITATION

*) main constraint

STEAM/ ELECTRICITY

Note: In Forest Area

EBTKE-KESDM KESDM- 2011 2010 ©©EBTKE



Geothermal Investment Opportunities in Indonesia

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