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GEOTHERMAL DEVELOPMENT IN INDONESIA By: Sugiharto Harsoprayitno, M.Sc Director of Geothermal Enterprise Supervision and Groundwater Management DIRECTORATE.

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Presentation on theme: "GEOTHERMAL DEVELOPMENT IN INDONESIA By: Sugiharto Harsoprayitno, M.Sc Director of Geothermal Enterprise Supervision and Groundwater Management DIRECTORATE."— Presentation transcript:

1 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

2 OUTLINE  Geothermal Policy  Geothermal Development Plan 2

3 Geothermal Policy

4 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 WKPNew WKP 4

5 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

6  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

7 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

8 Government Regulations IV. 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

9 GEOTHERMAL WORKING AREA (WKP) 9

10 Geothermal Development Plan

11 Projection of Power Generation Capacity Needed Assumption: Reverse Margin 30 % (based on RUKN 2008 – 2027) 30,345 MW → Installed Capacity as of March

12 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

13 Geothermal Area Distribution Map 13 Source : Geological Agency, MEMR (2008)

14 Geothermal Potential Distribution Location Resources (MWe)Reserve (MWe) Installed Capacity (MWe) SpeculativeHypotheticProbablePossibleProven Sumatera 4,9732,1215, Java 1,9601,7713, ,8151,117 Bali-Nusa Tenggara Sulawesi Maluku Kalimantan Papua Total 257 Locations 8,6834,32011,3691,0502,288 Total : 1,179 13,00314,707 Total : 27,710 14

15 Existing Geothermal Production Areas in MW No.LocationProvinceDeveloperInstalled Capacity 1SibayakNorth SumateraPGE 12 2Salak Mt.West JavaPGE-CGS 375 3Wayang WinduWest JavaPGE-SE 227 4KamojangWest JavaPGE 200 5DarajatWest JavaPGE-CGI 255 6DiengCentral JavaGDE 60 7LahendongNorth SulawesiPGE 50 Total1,179 15

16 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 MW ( Production) MW3442 MW4600 MW6000 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 MW MW Plus Crash Program Scenario Phase II 16

17 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

18 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

19 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: 19

20 New Geothermal Working Areas (WKP) Offered Through Tender Process (after Law No. 27/2003 on Geothermal) As of Sept 2009

21 The Result of WKP’s Tender 21

22 Geothermal Pre-Survey Assignment in 2008 NOLOCATIONCOMPANYDESCRIPTION 1. Guci, Central Java Province PT. Spring Energy Sentosa Finished 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 Energy Determined as WKP Rajabasa Mt. 5. Kalianda, Lampung Province PT. Supreme Energy 6. Rantau Dedap, South Sumatra Province PT. Supreme Energy Finished Assignment (In process of determining WKP) 22

23 Geothermal Pre-Survey Assignment in 2009 NOLOCATIONCOMPANYDESCRIPTION 1. Wai Ratai, Lampung PT. Optima Nusantara Energi On Going 2. Simbolon-Samosir, North Sumatera PT. Optima Nusantara Energi On Going 23 Areas offered for Pre-Survey Assignment

24 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 Phone : Fax.:


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