Promoting Geothermal Energy Utilization in Indonesia Challenges and Opportunities

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1 Promoting Geothermal Energy Utilization in Indonesia Challenges and Opportunities Dendy Kurniawan Finance Director PT Geo Dipa Energi April

2 Geo Dipa Energi (GDE) PT GEO DIPA ENERGI Est. 5 July % PLN 33% PLN 67% Pertamina 67% Government of Indonesia Geothermal SOE 29 December

3 GDE s Contract Area Patuha Contract Area Jakarta JAVA Dieng Contract Area Location : Dieng Plateau, Central Java Reserve : 400 MW Installed Capacity : 1x60 MW (Dieng GPP # 1) Geothermal Wells : 12 wells (9 productions) Location Reserve Installed Capacity Geothermal Wells : Patuha, Ciwidey, West Java : 400 MW : Final Phase EPC Patuha GPP #1 (1x55 MW) : 11 wells (8 productions) 3

4 Indonesia Geothermal Reserves 6,645 6,871 1, ,321 3, Reserves Resources Total Potential Reserves : 28 GWe (40% World s Reserves) Current Utilization : 4% # locations : 280 locations Source: National Geological Agency,

5 2nd Phase Government s 10,000 MW Fast Track Program Java Outside Java Total MW MW MW % from Total Coal-fired 2,000 2,196 4, % Geothermal 1,485 1,411 2, % renewable energy Gas-fired 1, , % Hydro 1, , % renewable energy Total 5,685 4,021 9, % 42% will be generated by renewable energy 30% will be generated by geothermal energy 5

6 Investment Cost & CO2 Emission - Comparison Investment Cost USD mn/mw CO2 Emission kg/mwh Nuklir Geothermal Hydro Wind Coal-fired Combined Cycle Coal Oil/Diesel 6

7 Geothermal Tariff & Regulation Price USD /kwh Feed-in Tariff USD /kwh MEMR Regulation No. 22/2012 USD 9.70 /kwh Government Capping Price, MEMR Regulation No. 02/2011 SUFFICIENT??? USD 5-6 /kwh Current Average Selling Price Insufficient to recover investment and capital cost South & West Sulawesi USD /kwh North & Middle Sulawesi USD /kwh Sumatera USD /kwh Maluku & Papua USD /kwh Java, Madura, Bali USD /kwh East & West NT USD /kwh 7

8 Investment-Equivalent Pricing Price USD /kwh Coal Feed in Tariff Capping Price Current Price of Geothermal Investment USD mn per MW Coal Power Plant Investment Cost Coverage Geothermal Power Plant Investment Cost Coverage : USD mn per MW : Power Plant ONLY : USD mn per MW : Up Stream Development Investment portion 45%-50% exploration & exploitation wells, SAGS Down Stream Development Investment portion 50% - 55% Geothermal Power Plant 8

9 Patuha GPP (1x55 MW) Case Technical Data Financial Data Site Location 2100 m above sea level Annual Production 440 GWh Well Depth m PPA Selling Price USD 6.82 cents/kwh Average Well Capacity 7-8 MW per Well Total Debt USD 91.6 millions No of Production Wells 8 Lender Bank BNI No of Reinjection Wells 3 Tenor of Debt 11 years (incl. 3 years grace period) SAGS Piping Length 3700 m EPC Coverage SAGS and Power Plant Steam Turbine Toshiba, 59 MW single flow EPC Contractor Marubeni Corporation Concession Area: 360 km 2 9

10 Patuha GPP (1x55 MW) Case WELL-3 : 8.2 MW WELL-3Ast : 3.2 MW WELL-3B : 13.9 MW WELL-2 : 4.5 MW WELL-2Ast : 8.4 MW WELL-5st : 6 MW WELL-7 : 12.7 MW Power Plant WELL-6 : Inj. Well Office WELL-1 : 12.5 MW WELL-1A : Inj. Well WELL-1Bst : Inj. Well Total SAGS Pipe Length = 3,700 m 8 Production Wells Expected COD : April Reinjection Welss 10

11 Operational Challenges Challenges Most Critical Issue Decline rate on production wells Initiatives 1. Make-up Wells with 5-6% decline rate, make-up wells is mandatory expected 1 new production well every 2 years 2. Work-over on Wells Work over is also mandatory to recover capacity of both production wells and reinjection wells Classical Social Issues Regional Govt. Autonomy Corporate Social Responsibility Promote prudent and adequate community development fund 11

12 Future Expansions of Dieng - Patuha DIENG PATUHA DIENG PATUHA UNIT 1 PLTP Unit 1 (60 MW) PLTP Unit 1 (55 MW) PLTP Unit 1 (60 MW) PLTP Unit 1 (55 MW) UNIT 2 PLTP Unit 2 (55 MW) PLTP Unit 2 (55 MW) UNIT 3 PLTP Unit 3 (55 MW) PLTP Unit 3 (55 MW) 12

13 Future Expansions Connectivity DRILLING & EPC CONTRACTORS Drilling Companies EPC Contractors BANKING SECTOR Local Banks Foreign Banks Multilateral Development Banks CONSULTANT & ADVISORS Technical Consultants Financial Consultants Legal Consultants STRATEGIC INVESTORS Private Equities Power Business Players 13

14 Thank You 14