INDONESIA GEOTHERMAL DEVOPMENT:

Readiness of Private Sector to Develop Geothermal in Indonesia

By:
Prijandaru Effendi
President of
Indonesia Geothermal Association (Inaga-API)

Presented for :
Indoebtke

Jakarta, 24 November 2021

 Indonesia Energy Transition

• The Indonesia energy transition was designed to shift towards a more frugal energy system
based on decarbonized energy sources that are renewable, clean and safe

• As such, Government has Enacted Presidential Decree in 2014 as a National Energy blue
print for targeting the energy mix scenario in 2050 based on complimentary, not competition

• In that decree, Geothermal is targeted to share 7,2 GWH in 2025, 10 GWH in 2030 and 17
GWH in 2050. Indeed, it is a very ambitious target

• In addition, our President has made his Commitment to Paris Agreement to emission
reduction in 2030 to 29% on own efforts and to 41% with international supports. This is a
binding commitment

• Net zero emission is aimed in 2060 and still long way to go especially in meeting the share of
geothermal share as targeted

• The implementation of energy transition from fossil fuel to renewable energy would be a key
strategy of Indonesia energy development to support sustainable national development

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 Investment Opportunities

• Indonesia is blessed with abundance geothermal resources of 23,9 GWH with

Government’s ambitious development target
• Before pandemic, we made high growth energy consumption supported by high
economic growth. Normally country’s economic growth was in the range of 5-6%
annually and electricity growth was at 7-8% annually
• Strong Government Political will to develop Renewable Energy Resources :
Sustainability and Emission Reduction
• It requires a lot of investment to develop these resources. Most of these
investments will come from private investors – presenting enormous investment
opportunities.
• Great interest from Multi Lateral/Bilateral institutions and Commercial Banks for
Project Financing
• Relatively conducive investment climate; Political stability. We already conducted 4
times of direct presidential election and all were peaceful

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 Country Updates of Geothermal Development

• Current installed capacity at 2,175 MW and we are still expecting additional installed
capacity of 95 MW before end of year to make total installed capacity becomes 2,270
MW

• Currently, Government is finalizing a Presidential decree in attempt to accelerating

Geothermal development. It is Investor’s high expectation on the issuance of
Presidential Decree for Renewable Energy; hoping this decree provides strong support
to accelerate Indonesia geothermal development post pandemic

• Government drilling ‘de risking’ program has commenced. This is a program that is
intended to reduce exploration risk in order to make Geothermal tariff more
competitive

• The presence of Covid-19 pandemic delays the COD of some geothermal projects and
holding up new investment decision. We hope pandemic will be gone soon to let us
catch up what is left behind

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 Installed Capacity
Geothermal Power Total Capacity
No. Geothermal Working Area/ Location Developer/ Operator
Plant (MW)

1 Sibayak – Sinabung, NORT SUMATERA Sibayak PT. Pertamina Geothermal Energy 12

2 Cibeureum – Parabakti, WEST JAVA Salak Star Energy Geothermal Salak, Ltd 377

3 Wayang Windu Star Energy Geothermal Wayang Windu 227

Pangalengan, WEST JAVA
Patuha PT Geo Dipa Energi 55

Kamojang PT. Pertamina Geothermal Energy 235

4 Kamojang – Darajat, WEST JAVA
Star Energy Geothermal Darajat Indonesia,
Darajat 270
Ltd
5 Dataran Tinggi Dieng, CENTRAL JAVA Dieng PT. Geo Dipa Energi 60

6 Lahendong – Tompaso, NORTH SULAWESI Lahendong PT. Pertamina Geothermal Energy 120

7 Waypanas, LAMPUNG Ulubelu PT. Pertamina Geothermal Energy 220

8 Ulumbu, EAST NUSA TENGGARA Ulumbu PT. PLN (Persero) 10

9 Mataloko, EAST NUSA TENGGARA Mataloko PT. PLN (Persero) 2,5

10 Sibual-Buali, NORT SUMATERA Sarulla Sarulla Operation Ltd. 330

11 Karaha-Cakrabuana Karaha PT. Pertamina Geothermal Energy 30

12 Lumut Balai, South Sumatra Lumut Balai PT. Pertamina Geothermal Energy 55

13 Likipinangawan Muara Laboh Muara Laboh PT. Supreme Energy Muara Laboh 85

14 Sorik Marapi, North Sumatra Sorik Marapi I & 2 PT. Sorik Marapi Geothermal Power 87
TOTAL 2175.5
 GREEN RUPTL 2021-2030

• Asumsi :
– Increase renewable energy portion to 51%

– Increasing renewable portion will not trigger increase in BPP

– Asumsi demand increase at 3.5% per annum

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 GEOTHERMAL DEVELOPMENT ROAD MAP

16.524,0

13.423,0

10.002,0
9.442,0

8.602,0

7.767,0
7.242,0 7.357,0

5.474
4.666
3.471,0 4.426
2.776,0
3.086,0 3.853 3.976
2.396,0
3.563
2.243,5 2.278,5
1.858,5 2.023,5
1.643,5 2.552 2.693
1.189,0 1.226,0 1.336,0 1.343,5 1.403,5 1.438,5
2.064 2.118 2.254 2.362
1.694 1.884
1.439
1.189 1.189 1.226 1.336 1.344 1.404
870 808
290 450 240
0 37 110 7,5 60 35 205 165 140 180 161 136 108 190 141 123
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2040 2050

Target Kapasitas Under RUEN Incremental Actual Kapasitas Terpasang RUPTL 2021 - 2030 Incremental RUPTL
(MW) (MW) (MW) (MW) (MW)
 Is the Target Achievable?

• Let’s look the Progress that Indonesia makes so far

– Achieve the annual installed capacity growth average less than 100 MW. We started to utilize
geothermal in 1985 from Kamojang field, operated by PGE. It has been 36 years and current
installed capacity is 2,175 MW. It is so slow
– Government has awarded more than 20 Geothermal concessions (WKP) in the last 10 years
– Efforts have been made by Government to make geothermal development attractive. Lots of
incentives to help developers to improve its economics of the projects been given and some more
are coming
– Lots of space to catch up but not many developers are currently commencing the exploration
phase. Developers are in the position to wait the sweetener that my be offered in the upcoming
Presidential decree

• Challenge
– Tariff gap between buyer’s affordability and developer’s expected return. Buyer’s affordability is
based on its average production cost while developer’s expected return is based on economics of
the projects
– Government is still looking for best development scheme that results on frequent changes in
regulation; frequent changes in regulation creates uncertainties and risks to the investors
– Single Buyer – State Owned Utility Company and B to B negotiation. It requires patience,
determination and uncertainty when conducting negotiation
– Long lead development time. Average of project completion take around 10 years. Mostly due to
negotiation time, land acquisition and procuring permits. Lots of efforts made by Government to
accelerate the development time, especially for the permit approval process

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 Way Forward

• Equitable Tariff Resolution:

– Pricing policy that provide adequate return commensurate
with the investment risk and affordability. The presence
of Government to provide more incentives to improve the
economics of project and
– Technology breakthrough to reduce cost and risks.
Combination of both will result in more competitive selling
price from Geothermal energy
• Not to change regulations frequently to provide legal
certainty to the investors.
• Accelerated implementation of power wheeling scheme
• It requires a special effort and strong commitment from all
stakeholders to put Geothermal development progress back
on track and a success
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 Conclusion

• Under current condition, boosting up

the investment sector will significantly
contribute to the economic recovery
post Covid-19 pandemic
• Given economics viability, Geothermal
sector hereby declares its readiness to
boost the investment in Indonesia.

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