GEOTHERMAL DEVELOPMENT IN INDONESIA

By: Sugiharto Harsoprayitno, M.Sc

Director of Geothermal Enterprise Supervision and Groundwater Management

DIRECTORATE GENERAL OF MINERAL, COAL AND GEOTHERMAL

MINISTRY OF ENERGY AND MINERAL RESOURCES

APEC EWG 38, BALI November 2009

OUTLINE

❑ Geothermal Policy

❑ Geothermal Development Plan

2

Geothermal Policy

■ 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

■ Selling Price: In US Dollar

■ 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 WKP holder will be granted as generally plan

operation

■ Selling Price : In Rupiah

Implementation of Geothermal Policies

Existing WKP New WKP

4

Government Regulations

I. Law No. 27/2003 on Geothermal

II. Government Regulation No. 59/2007 on Geothermal Business Activities

III.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

5

❑ Pre-Survey Assignment to Business Entities is given to accelerate geothermal development in green field (before determined as WKP)

❑ The Minister determines areas for Pre-Survey Assignment and offers them through medias and forums by Director General

❑ Business Entities propose Pre-Survey Assignment request to The Minister attn. Director General cc: Head of Geological Agency, governor and regent/mayor

❑ Application process uses first come first served system

❑ One Business Entity can get one area of Pre-Survey Assignment

❑ Pre-Survey Assignment has to be finished in one year (max)

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

6

MEMR Regulation No. 05/2009 * on The Guidelines for Electricity Purchasing Price by PT. PLN from Cooperation and

Other Business Entities

❑ In designing the electricity purchasing, PT. PLN is obligated to make their own estimated price based on type of generation, location, capacity quantities, capacity factor and also some assumptions such as: level of local content components, fuel price, exchange rate and other macro economic indicators

❑ PT. PLN request for approval of the electricity purchasing price to Minister of Energy and Mineral Resources

❑ The electricity purchasing price can be adjusted considering on macro economic indicators and based on agreement (Power Purchase Agreement)

* Under Reviewed

7

Government RegulationsIV. Tax facilities are provided in accordance with the Tax Regulations: ✓ Government Regulation No. 62/2008 jo No. 1/2007 on Income Tax

Facilities for Investment in Certain Business Fields and/or Certain Regions → 30% (thirty percent) net tax deduction of the total Investment, charged for 6 (six)

years for 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 Avoid Agreement

✓ MoF Decree No. 177/PMK.011/2007 on Custom Duties Exemption of Import Items for Upstream Activities in Oil & Gas and Geothermal & MoF Decree No. 242/PMK.011/2008 on Value Added Tax of Import Items Covered by Government for Upstream Exploration Activities in Oil & Gas and Geothermal on 2009 Budget

→ for the items haven’t been produced in Indonesia → for the items have been produced in Indonesia but they haven’t complied with

the specification needed or the amount is insufficient

Continued…

8

GEOTHERMAL WORKING AREA (WKP)

9

Geothermal Development Plan

Projection of Power Generation Capacity Needed

Assumption:

• Reverse Margin 30 %

(based on RUKN 2008 – 2027)

30,345 MW → Installed Capacity as of March 2009

11

● Geothermal potency 27 GW or equivalent to 219 Billions barrel

of oil

● Installed Capacity 1,179 MW (4.3% of whole potency)

● Geothermal Road Map Target 9,500 MW in 2025

Resource Potency

12

Geothermal Area Distribution Map

13Source : Geological Agency, MEMR (2008)

Geothermal Potential Distribution

LocationResources (MWe) Reserve (MWe) Installed Capacity

(MWe)Speculative Hypothetic Probable Possible Proven

Sumatera 4,973 2,121 5,845 15 380 12

Java 1,960 1,771 3,265 885 1,815 1,117

Bali-Nusa Tenggara 410 359 973 - 15 -

Sulawesi 875 32 959 150 78 50

Maluku 370 37 327 - - -

Kalimantan 45 - - - - -

Papua 50 - - - - -

Total 257 Locations8,683 4,320 11,369 1,050 2,288

Total : 1,17913,003 14,707

Total : 27,710

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Remarks:PGE : (Pertamina Geothermal Energy)CGS : (Chevron Geothermal Salak)CGI : (Chevron Geothermal Indonesia)SE : (Star Energy)GDE : (Geo Dipa Energy)

Existing Geothermal Production Areas

in MW

No. Location Province Developer Installed Capacity

1 Sibayak North Sumatera PGE 12

2 Salak Mt. West Java PGE-CGS 375

3 Wayang Windu West Java PGE-SE 227

4 Kamojang West Java PGE 200

5 Darajat West Java PGE-CGI 255

6 Dieng Central Java GDE 60

7 Lahendong North Sulawesi PGE 50

Total 1,179

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The Road Map of Geothermal Development 2006 – 2025

WKP : Geothermal Working Area

(Based on President Decree No. 5/2006 on National Energy Policy)

Current Condition

2006

852 MW (Production)

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

1.179 MW

2014

5.795 MW

Plus Crash Program Scenario Phase II

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AREA PLTU PLTGU PLTP PLTA TOTAL

JAVA - 1.200 2.137 1.000 4.337OUTSIDE JAVA 2.616 240 2.596 174 5.626

2.616 1.440 4.733 1.174 9.96326% 14% 48% 12% 100%

TOTAL

Geothermal Contribution on 10,000 MW Power Development Acceleration Program Phase II

Notes: PLTU : Coal Fired Power Plant PLTGU : Combine Cycle Power Plant PLTP : Geothermal Power Plant PLTA : Hydro Power Plant

17

in MW

Distribution Area for Geothermal Development Plan 2009 – 2014 (Based on 10,000 MW Power Development Acceleration Program Phase II)

4733 *

*) Total additional installed capacity 2009 - 2014

2009 2010 2011 2012 2013 2014Total Installed

CapacityTotal Installed

CapacityTotal Installed

CapacityTotal Installed

CapacityTotal Installed

CapacityTotal Installed

Capacity

1179 1249 1407 2380 3175 5795

Additional Installed Capacity

Additional Installed Capacity

Additional Installed Capacity

Additional Installed Capacity

Additional Installed Capacity

Additional Installed Capacity

117 70 158 973 795 2620

Distribution Area Distribution Area Distribution Area Distribution Area Distribution Area Distribution Area

Java - Bali Java - Bali Java - Bali Java - Bali Java - Bali Java - Bali

117 5 - 330 445 1240

Sumatera Sumatera Sumatera Sumatera Sumatera Sumatera

- 60 105 550 330 1240

Sulawesi Sulawesi Sulawesi Sulawesi Sulawesi Sulawesi

- - 45 70 - 80

Nusa Tenggara Nusa Tenggara Nusa Tenggara Nusa Tenggara Nusa Tenggara Nusa Tenggara

- 5 8 3 20 40

Maluku Maluku Maluku Maluku Maluku Maluku

- - - 20 - 20

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● save about 200,000 barrel oil per day (1 MW

equivalents to 42 barrel per day)

● reduce emission about 28,398,000 t CO2/Year (6,000 t CO2e/MW/Year)

With Developing 4733 MW Geothermal Power Plant until 2014, could:

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NO FIELD REGENCY PROVINCEDEVELOPMENT

TARGETS (MW)

STATUS OF TENDER

PROCESS

1 Seulawah agam Aceh Besar Nangroe Aceh Darusallam 160 Preparation2 Jailolo West Halmahera North Maluku 75 Finished3 Telaga Ngebel Ponorogo and Madiun East Java 120 On Going4 Ungaran Mt. Semarang and Kendal Central Java 100 On Going5 Tampomas Mt. Sumedang and Subang West Java 50 Finished6 Cisolok Cisukarame Sukabumi West Java 45 Finished7 Tangkuban Perahu Mt.Subang, Bandung and purwakarta West Java 100 Finished8 Jaboi Sabang Nangroe Aceh Darusallam 50 Finished9 Sokoria Ende East Nusa Tenggara 30 Finished10 Talang Mt. Solok West Sumatera 36 Preparation11 Blawan Ijen Bondowoso, Banyuwangi and SitubondoEast Java 270 On Going12 Hu'u Daha Dompu West Nusa Tenggara 65 Preparation13 Sipaholan Ria-ria Noth Tapanuli North Sumatera 75 On Going14 Bukit Kili Solok West Sumatera 83 Preparation15 Sorik Marapi Roburan Mandailing Natal North Sumatera 200 Preparation16 Marana Donggala Central Sulawesi 36 Preparation17 Songa Wayaua South Halmahera North Maluku 140 Preparation18 Atadei Lembata East Nusa Tenggara 40 Preparation19 Suwawa Bone Bolanga and Gorontalo Gorontalo 110 Preparation20 Kaldera Danau BantenSerang and Pandeglang Banten 115 Preparation21 Rajabasa Mt. South Lampung Lampung 91 Preparation22 Liki Pinangawan Muara Laboh, Solok Selatan West Sumatera 400 On Going

2391TOTAL

New Geothermal Working Areas (WKP) Offered Through Tender Process

(after Law No. 27/2003 on Geothermal) As of Sept 2009

The Result of WKP’s Tender

No. GWA Location The WinnerPrice

Rp/kWh

1 Tampomas Mt.Sumedang & Subang Regency, West Java Province

Consortium PT. Wijaya Karya - PT. Jasa Sarana - PT. Resources Jaya Teknik Management Indonesia

589.00

2 Cisolok – Cisukarame

Sukabumi Regency, West Java Province Jabar Halimun Geothermal 630.00

3 Tangkuban Perahu

Subang, Bandung & Purwakarta Regency, West Java Province

Tangkuban Perahu Geothermal Power 533.60

4 JailoloHalmahera Barat Regency, North Maluku Province

PT. Star Energy Investment 1,727.54

5 SokoriaEnde Regency, East Nusa Tenggara Province

Consortium PT. Bakrie Power Resources - PT. Energy Management Indonesia

1,250.69

6 JaboiSabang Regency, Nangro Aceh Darussalam Province

Consortium PT. Bukaka Teknik Utama - PT. Dian Sakti Energi - PT. Global Energi Aliansi

1,705.00

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Geothermal Pre-Survey Assignment in 2008

NO LOCATION COMPANY DESCRIPTION

1.Guci, Central Java Province

PT. Spring Energy SentosaFinished Assignment

(In process of determining WKP)

2.Baturaden, Central Java Province PT. Trinergy

Finished Assignment (In process of determining WKP)

3.Muara Laboh, West Sumatra Province PT. Supreme Energy

Determined as WKP Liki Pinangawan

4. Pematang Belirang, Lampung Province

PT. Supreme EnergyDetermined as

WKP Rajabasa Mt.5. Kalianda, Lampung

ProvincePT. Supreme Energy

6.Rantau Dedap, South Sumatra Province PT. Supreme Energy

Finished Assignment (In process of determining WKP)

22

Geothermal Pre-Survey Assignment in 2009

NO LOCATION COMPANY DESCRIPTION

1. Wai Ratai, Lampung PT. Optima Nusantara Energi

On Going

2. Simbolon-Samosir, North Sumatera

PT. Optima Nusantara Energi

On Going

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No. Location Regency Province

1111 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. Gn. Gede/Pangrango Bogor, Sukabumi, and Cianjur West Java

5. Malawa Maros, Pangkajene Kepulauan, Bone and Barru

South Sulawesi

6. Gn. Dua Saudara Bitung North Sulawesi

7. Sembalun Lombok Timur West Nusa Tenggara

8. Ulumbu Manggarai East Nusa Tenggara

9. Mataloko Ngada East Nusa Tenggara

Areas offered for Pre-Survey Assignment

MINISTRY OF ENERGY AND MINERAL RESOURCES REPUBLIC OF INDONESIA DIRECTORATE GENERAL OF MINERAL, COAL AND GEOTHERMAL

DIRECTORATE OF GEOTHERMAL ENTERPRISE SUPERVISION AND GROUND WATER MANAGEMENT Jl. Prof. Dr. Supomo, SH. No. 10 Jakarta 12870

Phone : +62 21 83702847 Fax.: +62 21 83785103 www.djmbp.esdm.go.id