EXPANDING OPPORTUNITIES GEOTHERMAL DEVELOPMENT IN INDONESIA. ABADI POERNOMO PRIJANDARU EFFENDI Indonesian Geothermal Association

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1 EXPANDING OPPORTUNITIES GEOTHERMAL DEVELOPMENT IN INDONESIA ABADI POERNOMO PRIJANDARU EFFENDI Indonesian Geothermal Association GRC ANNUAL MEETING 2017 Salt Lake City, 1-4 October 2017

2 CURRENT ENERGY CONDITION A. High dependency on fuel. B. Indonesia energy mix 2015: oil (46%); coal (26%); gas (23%); nre (5%). C. Indonesia has been a net oil importer since Production (287 mboe); consumption (420 mboe); oil fuel import (195 mboe); crude oil import (121 mboe); refinery capacity of ± 1 million barrels per day. D. Energy consumption per capita is still low (5,4 mboe/cap); consumption of electricity (865 kwh/cap); electrification ratio (88.3%); power generation capacity (53 GW). E. Very high energy subsidies F. Energy is still used as an export commodity: Gas:+ 42%, exported Coal: + 82% exported G. Fuel operational reserves only for days and there are no reserves of energy buffer. H. The final energy elasticity is above 1 I. Supporting infrastructure has not been developed optimally J. The development of new and renewable energy is not optimal. Government Regulation number 79 of 2014 On National Energy Policy, target of the energy mix by 2025 : Oil : < 25%, Gas : > 22% NRE : > 23% Coal : > 30% Oil Gas Coal NRE ENERGY MIX % 0 26% 166 MTOE 23% 5%

3 INDONESIA ENERGY MIX Energy Role as the national capital development NRE on Energy Mix > 23% > 31% TARGET % Energy Supply > 400 MTOE > MTOE Power plants > 115 GW > 430 GW Energy Elasticity < 1 < 1 25% MTOE 31% Electricity /capita/years kwh kwh Electrification Ratio 100% 100% 20% 22% TARGET % MTOE 23% 26% 25% MTOE 23% 46% 5% NRE Crude Oil Natural Gas Coal

4 NEW AND RENEWABLE ENERGY TARGETS ,2 MTOE ELECTRICITY 45,2 GW % NRE mix 92,2 MTOE 23,0 MTOE Biofuel Biomass Biogas CBM 13,9* mio KL 8,4 mio ton 489,8 mio M3 46,0 MMSCFD 135 FOSSIL ENERGY FOSSIL POWER ENERGY PLANT POWER PLANT ,3 MTOE ELECTRICITY 167,7 GW NRE POWER PLANT % NRE mix 315,7 MTOE 79,4 MTOE Biofuel Biomass Biogas CBM 52,3* mio KL 22,7 Mio ton 1.958,9 mio M3 576,3 MMSCFD TYPE NRE % 19.4% 33.3% 36.6% 37.4% 37.8% FOSSIL % 80.6% 66.7% 63.4% 62.6% 62.2% Total

5 CURRENT PROGRESS OF GEOTHERMAL Geothermal Potential Resources MW Reserves MW Geologi Agency, December 2016 Intalled Capacity 1.698,5 MW 12 GPP on 10 GWA Utilization 9.3% from Geothermal reserves Geothermal Working area 70 GWA Existing 19 GWA New 51 GWA Electricity Production 4.78 GWh 41% from the target 11.6 GWh on 2017 (data on June 2017) Regulation Law No. 21/2014 : Geothermal GR No. 28/2016 : Amount and Procedure of Production Bonus GR No. 7/2017 : Indirect Use MREMR No. 21/2017 : Waste of Mud and Boreholes MREMR No. 23/2017 : Production Bonus MREMR No. 36/2017 : Preminaliry Survey and Preminaliry Survey Plus Exploration MREMR No.37/2017 : GWA Steam Production M Ton 41% from the target M Ton on 2017 (data on June 2017)

6 GEOTHERMAL POTENTIAL IN INDONESIA Potential Energy (Mwe) No Location Location Number Resource Reserve Installed Speculative Hypotetic Probable Possible Proven 1 Sumatera Java Bali Nusa Tenggara ,5 5 Kalimantan Sulawesi Maluku Papua Total ,5

7 RENEWABLE ENERGY DEVELOPMENT PLANT Geothermal 1.438, , , , , , , Hydro and Micro Hydro Bioenergy Solar Wind Other NRE Total Geothermal development target can be achieved required by: 1. Optimize geothermal potential in large fields especially in GWA managed by Pertamina 2. Electricity prices from geothermal are suitable with economy of field development; 3. Simplification of permit in geothermal sector 4. Fiscal incentives for geothermal development

8 TARGET AND MILESTONE OF GEOTHERMAL DEVELOPMENT 8.000, Capacity (MW) 7.000, , , , , , ,5 MW additional capacity from 1. GPP Ulubelu Unit 4 (55 MW) (COD 25 April 2017) 2. GPP Karaha Unit 1 (30 MW) 3. GPP Sorik Marapi (Modular, 20MW) 4. GPP Sarulla Unit 2 (110 MW) Additional Capacity (MW) 1.000, , Rencana Kapasitas Tambahan Kapasitas

9 GEOTHERMAL WORKING AREA STATUS 70 GWA (7.503 MW) PRODUCTION: 10 GWA (1.698 MW) Development plans (1.135 MW) EXPLORATION & EXPLOITATION: 26 GWA ( MW) Sungai Penuh Lumut Balai Hululais EXPLOITATION: 8 GWA (1.135 MW) Karaha Cakrabuana Cibuni Tabanan Tulehu Muaralaboh (145 MW) (285 MW) (340 MW) (50 MW) (10 MW) (65 MW) (20 MW) (220 MW) OPERATION: 10 GWA(1.698,5 MW) Development Plans (1.153 MW) PPA SIGNATURE 13 GWA (1.485 MW) 1. Gn. Rajabasa 2. Rantau Dedap 3. Blawan-Ijen 4. Gn.Ungaran EXPLORATION: 5. Telaga Ngebel 6. Baturaden 18 GWA (1.835 MW) 7. Guci 8. Kaldera Danau Banten LICENSEE PROCESS : 9. Cisolok Sukarame 1 GWA (110 MW) 10. Tampomas 11. Sorik Marapi 12. Jaboi 13. Sokoria 1. Seulawah Agam (110 MW) Sibayak Ulubelu Cibeureum Parabakti Pangalengan Kamojang Darajat Dieng Lahendong Tompaso Ulumbu Mataloko Sibual-Buali (12 MW) (220 MW) (377 MW) (282 MW) (505 MW) (60 MW) (120 MW) (10 MW) (2,5 MW) (110 MW) (220 MW) (220 MW) (110 MW) (55 MW) (165 MW) (180 MW) (55 MW) (110 MW) (45 MW) (45 MW) (240 MW) (10 MW) (30 MW) READY TO ASSIGNMENT / TENDER: 33 GWA (1.590 MW) 1. Gn. Talang - B. Kili 2. Gn. Lawu 3. Way. Ratai 4. Candi Umbul Telomoyo 5. Gn. Arjuno Welirang PPA SIGNATURE PROCESS: 5 GWA (330 MW) (20 MW) (110 MW) (55 MW) (55 MW) (110 MW)

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12 GEOTHERMAL DEVELOPMENT BREAKTROUGH Assignment on SOE PSA+ Exploration Incentive (Fiscal & Non Fiscal) Simplification of Licensing Government drilling & Geothermal Fund Optimizing of Potential Development in the Large Field

13 CHALLENGES Geothermal Location Within the Forest Area Social Matters issues Pricing Licensing Funding

14 CLOSING REMARKS Given that Indonesia retains the largest reserves of geothermal resources globally, which is currently only 5% being utilized, opportunity to invest is very sexy Through a National Energy Policy on targeting the Energy Mix by 2025, Government is seriously attempting to accelerate the geothermal development by simplifying and shortening bureaucratic of all permits and commercial process with the Buyer (PLN) Development of a pricing policy that is aimed to meet the expectation of developer, but still in a competitive range with PLN's production cost, is underway; it is aimed to combine pricing policy with fiscal incentives Indonesian Geothermal Association (INAGA) will always take an important role of geothermal development in Indonesia by cooperating in working relationships with all stake holders for the benefit of geothermal development In order to succeed in Indonesia; it requires good local knowledge, patience and determination

15 Source : Presidential Decree No.22/2017 : Energy Road Map Geological Agency, MEMR 2016 Directorat General NRCE, MEMR 2017 Handboof of Energy Indonesia, Pusdatin MEMR 2015