Ministry of Energy and Mineral ResourcesRepublic of Indonesia

Tokyo, November 29 2011

Electricity Investment OpportunityIn Indonesia Economic Development Corridors

Presented atSeminar of The Project for Promotion Clean Coal Technology

In Indonesia

ACCELERATION AND EXPANSION OF INDONESIAECONOMIC DEVELOPMENT (MP3EI) 2011-2025

The Illustration ofIndonesia’s Economic

TransformationAcceleration

POSTURE OF INDONESIA ECONOMIC CORRIDOR (EC)

The development of Economic Corridors requires a large amount of electricity supply. UnderMP3EI, the additional electricity supply needed in Indonesia by the year 2025 is projected to reachabout 90,000 MW. Of these, most of the electricity will be used to support the construction anddevelopment of major economic activities in the corridor.

1) Sumatra EC as a “Center for Production and Processing of Natural Resources and As Nation’s Energy Reserves”

2) Java EC as a “Driver for National Industry and Service Provision”

3) Kalimantan EC as a “Center for Production and Processing of National Mining and Energy Reserves”

4) Sulawesi EC as a “Center for Production and Processing of National Agricultural, Plantation, Fishery, Oil & Gas, and Mining”

5) Bali – Nusa Tenggara EC as a “Gateway for Tourism and National Food Support”

6) Papua – Kepulauan Maluku ECas a “Center for Development of Food, Fisheries, Energy, and National Mining”

NATIONAL ENERGY POLICY(Presidential Regulation No.5/2006)

Reduce oil share from energy mix More new and renewable energy sources (e.g. bio-fuel, geothermal, solar,

hydro, and wind power more than 17% in year 2025) Intensify energy diversification (fuel switching) Improve energy efficiency (energy elasticity < 1 ).

2025(Optimized)

2025(BaU)

Optimization of Energy Management

2009(CO2 ~ 370 mill. Ton)

(CO2 ~ 1,150 mill. Ton) (as Presidential Regulation No. 5/2006)(CO2 ~ 950 mill. Ton)

ENERGY MIX - 2010

NATIONAL ENERGY SUPPLY MIX

Oil47.5%

Coal26.6%

Gas22.1%

Hydro2.5% Geothermal

1.3%

National Energy Supply and Utilization System (SISPENNAS ) is heavily dependent on fossil fuel (96.2%), consist of: oil (47.5%), gas (22.1%) and coal (26.6%), which produce GHGs emission

Energy consumption is increasing (7% per year)

Energy is still subsidized by the government

Total electricity installed capacity only reached about 35 GW

Electrification ratio about 67.2%

Electricity growth about 6.7%

Energy utilization is not efficient

Utilization of renewable energy is not optimal.

SUMATERA : • Generation: 5.711 MW• 275 kV : 1.027 kms• 150 kV : 9.398 kms• 70 kV : 456 kms• MV : 73.700 kms• LV : 92.262 kms

JAMALI : • Generation: 25.606 MW• 500 kV : 5.099 kms• 150 kV : 13.505 kms• 70 kV : 3.757 kms• MV : 133.670 kms• LV : 219.084 kms

Nusa Tenggara:• Generation: 335 MW• 150 kV : 83 kms• MV : 7.676 kms• LV : 7.501 kms

KALIMANTAN : • Generation: 1.376 MW• 150 kV : 1.824 kms• 70 kV : 123 kms• MV : 23.907 kms• LV : 22.537 kms

SULAWESI : • Generation: 1.498 MW• 150 kV : 3.000 kms• 70 kV : 552 kms• MV : 24.361 kms• LV : 25.404 kms

MALUKU :• Generation: 216 MW• MV : 4.585 kms• LV : 2.364 kms

PAPUA : • Generation: 211 MW• MV : 2.074 kms• LV : 3.558 kms

: existing transmission

: plan transmission

: Generation

TOTAL • GENERATION INSTALL CAPACITY : 35.313 MW• PANJANG JARINGAN:- 500 KV : 5.099 kms- 275 KV : 1.027 kms - 150 KV : 27.810 kms- 70 KV : 4.888 kms- MV (Medium Voltage) : 270.214 kms- LV (Low Voltage) : 372.709 kms

Indonesian Power Sector Infrastructure(Current Status)

PLN, 79%

IPP, 18%PPU, 3%

HEPP, 11%

CFPP, 41%

GTPP, 10%

CCPP, 22%

GeoPP, 3%DPP, 12%

GEPP, 0.07%WTPP,0.001%

MHPP, 0.08%

Oil share in electricity production is still high, because:

DPP that should be operated in peak load period, is operating in base load period to fulfill the demand (mostly happened in Outside Java-Bali system)

Several CCPP and GTPP in the Java-Bali system are operating utilizing oil as primary energy because of lack of gas supply.

Total installed capacity is about 35,313 MW,which consist of those owned by PLN’s (27,849 MW),

IPP’s (6,331 MW) and PPU’s (1,133 MW).

POWER GENERATION CURRENT CONDITIONPower Generation by Owner

Power Generation by Type

Electricity Productionby Energy Mix

Power generation is still dominated by CFPP, then followed by CCPP, DPP, HEPP, GTPP, Geo PP, MHPP, GEPP and WTPP.

Oil22.36%

Hydro6.08%

Gas16.58%Coal

28.85%

Geothermal2.07%

IPP ( Non Oil)

24.05%

Note:CFPP : Coal Fired Power PlantCCPP : Combine Cycle Power PlantDPP : Diesel Power Plant

HEPP : Hydro Electric Power PlantGTPP : Gas Turbine Power PlantGeoPP : Geothermal Power Plant

MHPP : Mini Hydro Power PlantGEPP : Gas Engine Power PlantWTPP : Wind Turbine Power Plant

CGPP= Coal Gasification Power Plant

ENERGY MIX FOR POWER GENERATION

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Oil 39% 37% 27% 36% 25% 22% 19% 8.11% 7% 5% 4%Bio Diesel 0% 0% 0% 0% 0% 0% 0.08% 0.50% 0.5% 0.5% 0.5%Hydro 10% 8% 8% 9% 8% 12% 7% 6.77% 6% 6% 6%Geothermal 3% 3% 3% 3% 3% 3% 2% 2.17% 2% 3% 3%Gas 16% 15% 19% 17% 25% 25% 26% 25.78% 25% 26% 27%Coal 33% 37% 43% 35% 39% 38% 46% 56.66% 59% 60% 59%

0%

20%

40%

60%

80%

100%

Electricity efficiency effort is conducted through diversification of primary energy in power generation (supply side) by optimizing utilization of gas, replacement of HSD to MFO, increasing of coal utilization, and developing of renewable power generation

Oil utilization is dedicated to isolated/remote areas with a higher priority for renewable energy resources

Gas and coal given priority to reduce dependence on oil in power generation.

2011 2019

TARGET OF ENERGY MIX FOR POWER GENERATION

Coal46%

Oil19%

Geothermal2%

Gas26%

Hydro7%

Coal58%

Oil3%

Geothermal13%

Gas21%

Hydro5%

Electricity efficiency effort is conducted through diversification of primary energy in power generation (supply side) by optimizing utilization of gas, replacement of HSD to MFO, increasing coal utilization, and developing renewable power generation

Oil utilization is dedicated to isolated/remote areas with a higher priority for renewable energy resources

Gas and coal are given priority to reduce dependence on oil in power generation.

Fast Track Program 10,000 MW Phase I

1

Sumatera 10 Project (1.425 MW)1.CFPP NAD – Meulaboh (2x110 MW)2.CFPP SUMUT – Pangkalansusu (2x220 MW)3.CFPP SUMBAR – Teluk Sirih (2x112 MW)4.CFPP 1 RIAU - Bengkalis (2x10 MW)5.CFPP 2 RIAU – Selat Panjang (2x7 MW) *)6.CFPP KEP. RIAU -Tj. Balai Karimun (2x7 MW)7.CFPP RIAU - Tenayan (2x100 MW)8.CFPP 3 BANGKA – Bangka Baru (2x30 MW)9.CFPP 4 BANGKA – Belitung (2x16,5 MW10.CFPP LAMPUNG – Tj. Selaki (2x100 MW)

Jawa-Bali 10 Project (7.490 MW)11.CFPP 1 BANTEN – Suralaya (1x625 MW)12.CFPP 2 BANTEN - Labuan (2x300 MW)13.CFPP 3 BANTEN - Lontar (3x315 MW)14.CFPP 1 JABAR - Indramayu (3x330 MW)15.CFPP 2 JABAR – Pelabuhan Ratu (2x350 MW)16.CFPP 1 JATENG – Rembang (2x315 MW)17.CFPP 2 JATENG – Cilacap Baru (1x660 MW)18.CFPP 1JATIM – Pacitan (2x315 MW)19.CFPP 2 JATIM - Paiton (1x 660 MW)20. CFPP 3JATIM – Tj. Awar Awar (2x350 MW)

Nusa Tenggara 4 Project (117 MW)21.CFPP 1 NTB – Bima (2x10 MW)22.CFPP 2 NTB – Lombok (2x25 MW)23.CFPP 1 NTT – Ende (2x7 MW)24.CFPP 2 NTT – Kupang (2x16,5 MW)

Kalimantan 5 Project (605 MW)25.CFPP 1 KALBAR – Parit Baru (2x50 MW)26.CFPP 2 KALBAR – Bengkayan (2x27,5 MW) 27.CFPP 1 KALTENG – Pulang Pisau (2x60 MW)28.CFPP 1 KALSEL – Asam Asam (2x65 MW)29.CFPP KALTIM – Tl. Balikpapan (2x100 MW)

Sulawesi 4 Project (220 MW)30.CFPP SULUT – Amurang (2x25 MW)31.CFPP GORONTALO – Anggrek (2x25 MW)32.CFPP SULTRA– Kendari (2x10 MW)33.CFPP SULSEL – Barru (2x50 MW)

Maluku 2 Project (46 MW)34.CFPP MALUT - Tidore (2x8 MW)35.CFPP MALUKU – Ambon (2x15 MW)

Papua 2 Project (34 MW)36.CFPP 1 PAPUA - Timika (2x7 MW)37.CFPP 2 PAPUA – Jayapura (2x10 MW)

2

3

4

56

7

89

11

19

22 2123

24

26

25

2728

29

31

30

32

33

34

35

37

3610

13

1215

14

17

20

18

1611

*) Terminate

10,000 MW Fast Track Program Phase I in 2006, of which all power generation utilize coal as primary energy source. This program aims at replacing existing Diesel Power Plant with new Coal Fired Power Plant, as well as to fulfill the electricity demand growth. Through this program, the fuel cost saving is expected reach about Rp. 129 Trillion p.a

Fast Track Program 10,000 MW Phase II

SUMATERA

• HEPP : 204 MW• GeoPP : 1.767 MW• CFPP : 531 MW• CGPP : 16 MW

TOTAL : 2.518 MW

KALIMANTAN

• CFPP : 612 MW• CGPP : 8 MW• CCPP : 120 MW• GTPP : 100 MW

TOTAL : 840 MW

SULAWESI

• GeoPP : 145 MW• CFPP : 360 MW• CGPP : 24 MW• CCPP : 240 MW

TOTAL : 769 MW

MALUKU

• GeoPP : 35 MW• CFPP : 14 MW• CGPP : 24 MW

TOTAL : 73 MW

PAPUA

• CFPP : 116 MWTOTAL : 116 MW

NTT

• CGPP : 16 MW• GeoPP : 10 MW

TOTAL : 26 MW

NTB

• GeoPP : 40 MW• CFPP : 70 MW

TOTAL : 110 MW

JAMALI

• GeoPP : 1.970 MW• CFPP : 1.600 MW• CCPP : 500 MW• HEPP : 1.000 MW

TOTAL : 5.070 MW

TOTAL

• HEPP : 1.204 MW• GeoPP : 3.967 MW• CFPP : 3.303 MW• CGPP : 88 MW• GTPP : 100 MW• CCPP : 860 MW

TOTAL : 9.522 MW

10,000 MW Fast Track Program Phase II in 2010, which consist of various primary energy source, of which : Hydro : 12.6% Geothermal : 41.7% Coal : 35.6% Gas : 10.1%.

Composition of Fast Track Program 10,000 MWPhase II based on It Developer

PLN+IPP: 92 Project, 9,522 MW

PLN: 21 Project, 4,216 MW IPP: 71 Project, 5,306 MW

HEPP, 3 Project1,204 MW

12%

GTPP, 1 Project100 MW

1%

CCPP, 3 Project860 MW

9%

GeoPP, 43 Project

3,967 MW42%

CFPP, 31 Project3,303 MW

35%

CGPP, 11 Project88 MW

1%

HEPP, 2 Project

1,174 MW28%

GTPP, 1 Project

1002%

CCPP, 2 Project740 MW

18%

GeoPP, 6 Project340 MW

8%

CFPP, 9 Project

1,854 MW44%

CGPP, 1 Project8 MW0,2 %

HEPP, 1 Project30 MW

1%

CCPP, 1 Project120 MW

2%

GeoPP, 37 Project

3627 MW68%

CFPP, 22 Project

1,449 MW27%

CGPP, 10 Project80 MW

2%

Note:CFPP : Coal Fired Power PlantCCPP : Combine Cycle Power Plant

HEPP : Hydro Electric Power PlantGTPP : Gas Turbine Power Plant

GeoPP : Geothermal Power PlantCGPP : Coal Gasification Power Plant

INVESTMENT REQUIREMENT 2011 – 2015 *)

Infrastructure 2011 2012 2013 2014 2015 TOTALGeneration 12,798 6,542 7,978 12,790 4,504 44,612Transmission 1,081 1,204 534 808 750 4,377Substation 1,291 1,165 793 916 639 4,804Distribution System

MV-Medium Voltage 568 501 425 449 581 2,524LV-Low Voltage 187 189 192 203 217 988Distribution Substation 198 184 194 193 221 990

TOTAL 16,122 9,786 10,116 15,359 6,913 58,295

*) Source: Master Plan of Electricity Development 2011-2015

(in million USD)

INVESTMENT REQUIREMENT 2011 – 2019 *)

Infrastructure 2011 2012 2013 2014 2015 2016 2017 2018 2019 TOTALGeneration 12,798 6,542 7,978 12,790 4,504 2,934 4,014 4,816 5,211 61,587Transmission 1,081 1,204 534 808 750 321 97 155 235 5,185Substation 1,291 1,165 793 916 639 638 428 537 512 6,919Distribution System

MV-Medium Voltage 568 501 425 449 581 486 538 545 511 4,604LV-Low Voltage 187 189 192 203 217 206 219 218 195 1,826Distribution Substation 198 184 194 193 221 210 236 247 254 1,937

TOTAL 16,122 9,786 10,116 15,359 6,913 4,795 5,532 6,518 6,918 82,058

(in million USD)

*) Source: Master Plan of Electricity Development 2011-2015 & RUPTL PLN 2010-2019