Energy and Mineral Resources for People’s Welfare Jakarta, September 16 th 2013 MINISTRY OF ENERGY AND MINERAL RESOURCES OF REPUBLIC OF INDONESIA DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION Alihuddin Sitompul Director of Various New Energy and Renewable Energy

Energy and Mineral Resources for People’s Welfare I.ENERGY POLICY3 II.NATIONAL PRIMARY ENERGY MIX TARGET4 III.NATIONAL ELECTRIFICATION RATIO IV.EFFORTS TO INCRESE NRE UTILIZATION8 V.UPDATE ON POLICY AND REGULATIONS10 VI.NRE DEVELOPMENT CHALLENGES15

Energy and Mineral Resources for People’s Welfare 1.ENERGY CONSERVATION: to increase energy efficiency on supply and demand side, e.g. industrial, transportation, household and commercial sector. 2.ENERGY DIVERSIFICATION: to increase the share of new and renewable energy use in the national primary energy mix. e.g.: RENEWABLE ENERGY a.Geothermal, b.Hydro, c.Bio-energy, d.Solar, e.Wind, f.Ocean wave and current. NEW ENERGY a.Liquified Coal b.Coal Bed Methane c.Gasified Coal d.Nuclear e.Hydrogen f.Others methane

Energy and Mineral Resources for People’s Welfare CURRENT CONDITION 2011 ENERGY ELASTICITY= 1,65 NON FOSSIL ENERGY SHARE  5% 2025 TARGET BY PRESIDENTIAL REGULATION NO. 5/2006 ENERGY ELASTICITY LESS THAN 1 IN 2025 OPTIMIZING NEW RENEWABLE ENERGY SOURCES Biofuel 5% Geothermal 5% Nuclear, Hydro, Solar, Wind, and Other NRE 5% Liquified Coal 2%

Energy and Mineral Resources for People’s Welfare NONEW & RENEWABLE ENERGYRESOURCESINSTALLED CAPACITY (IC) RATIO OF IC/RESOURCES (%) = 4/3 1Hydro75,000 MW 6, MW9.13% 2Geothermal29,164 MW1,341 MW 4.6 % 3Biomass49,810 MW1,644.1 MW 3.3% 4Solar4.80 kWh/m 2 /day27.23 MW - 5Wind3 – 6 m/s1.4 MW - 6Ocean49 GW ***) 0.01 MW ****) 0% 7Uranium3,000 MW *) 30 MW **) 0% *) Only in Kalan – West Borneo **) As a center of research, non-energy ***) Source: National Energy Council ****) BPPT’s Prototype NONOFOSSIL ENERGYRESOURCES PROVEN RESERVES (PR) RATIO OF PR/RESOURCES (%) PRODUCTION (PROD) RATIO OF PR/PROD (YEAR)*) = 4/36 7 = 4/6 1Oil (billion barel)7, , Gas (TSCF) Coal (billion ton) Coal Bed Methane (TSCF) Shale Gas (TSCF)

Energy and Mineral Resources for People’s Welfare NAD 90,96 % Sumut 86,70% Sumbar 76,14% Riau 85,09% Sumsel 73,97.% Bengkulu 79,37% Babel 94,13% Lampung 74,91% Jakarta 99,99% Banten 77,52% Jabar 76,03% Jateng 79,95% Jambi 70,37% DIY 77,26% Jatim 74,31% Bali 74,31% NTB 53,63% NTT 53,42% Kalbar 71,46% Kalsel 76,74% Kaltim 73,08% Sulut 76,22% Sulteng 66,83% Sulsel 76,29% Malut 74,12% Maluku 72,07% Papua 34,62% Category : > 60 % % % Sulbar 66,65% Kepri 83,56% Sultra 60,53% Papua Barat 67,88% Kaltim 73,32% Gorontalo 60,99% III. NATIONAL ELECTRIFICATION RATIO 2012

Energy and Mineral Resources for People’s Welfare No.ProvinceRegencyUnit Capacity (kW) 1RiauKuantan Singingi1100 2LampungLampung Barat175 3Sumatera SelatanBanyuasin1150 4Sumatera UtaraNias150 5Jawa TimurSumenep150 6Kalimantan TimurKutai Barat1100 7Nusa Tenggara TimurTimor Tengah Selatan130 8 Nusa Tenggara TimurSumba Tengah 150 9Nusa Tenggara Barat Sumbawa Papua BaratKaimana175 11PapuaMappi150 12PapuaKep. Yapen PapuaTolikara150 14PapuaTolikara150 15PapuaTolikara150 16PapuaTolikara150 17PapuaMamberamo raya PapuaMamberamo raya150 19PapuaMamberamo raya175 20PapuaMamberamo raya PapuaMamberamo raya1100 TOTAL

Energy and Mineral Resources for People’s Welfare 1.IMPROVING POLICY AND REGULATION  A few sub-sectors of renewable energy still has not been set. Therefore, GoI continues to improve the regulation on development and utilization of renewable energy, including the preparation of new renewable energy government regulations; 2.CREATING THE MARKET  through the supply and utilization of bio-fuel, obligating the National Electric Company (PT PLN) to purchase electricity, the application of Indonesian National Standard (SNI), etc; 3.SUBSIDY  Subsidy for bio-fuel has been allocated since Subsidies are provided to cover the difference between fuel prices and biofuel prices; distributed through PT Pertamina; 4.FEED-IN TARIFF  Be regulated through the Minister of Energy and Mineral Resources Regulation, which comprise the non-negotiable selling price of electricity generated from renewable energy purchased by National Electric Company. 5.INCENTIVES AND FACILITIES  Reduction of taxes and custom duties; simplicity of licensing procedures;  There will be no tendering process for RE power plant with capacity less than 10 MW (excluding for Solar PV Power Plant)

Energy and Mineral Resources for People’s Welfare 6.FUNDING AND OTHER FINANCIAL SUPPORT  Providing fund to improve modern energy acess in remote and isolated area 7.IMPROVING QUALITY AND QUANTITY OF HUMAN RESOURCES  Education and training in the field of renewable energy;  Socialization;  Improving NRE networks, supporting the establishment of organization/association (IKABI, METI, etc); 8.INCREASING RESEARCH IN THE FIELD OF NEW & RENEWABLE ENERGY  Scale up research cooperation;  Enhance type of research; 9.DEVELOPING COOPERATION WITH OTHER COUNTRIES AND INTERNATIONAL ORGANIZATION  Cooperation for capacity building;  Cooperation for technology transfer;  Lessons learned for the implementation of new renewable energy policies and programmes;  Acquire new renewable energy market (biofuel), and promote technology for NRE component.

Energy and Mineral Resources for People’s Welfare

1. CURRENT CONDITION  Geothermal Power Plant installed capacity: 1,341 MW 2. DEVELOPMENT PROGRAM  Improving coordination with permitting authorithy;  Harmonizing regulation in the field of geothermal;  Providing technical guidance, socialization and workshops in order to improve the quality of human resources  Accelerating the Phase II of 10,000 MW Program  Increasing investment in geothermal energy sub-sector with: Price of electricity (Feed-in Tariff); Auction of Geothermal Working Areas (GWA) under the authority of the Central Government (Mount Lawu and Ranau Lake); Development of 4 sites of geothermal project (exploration drilling) ; Promotion, dissemination of information and cooperation in geothermal side; NOAREA PRICE (cent US$/kWh) HIGH VOLTAGE MEDIUM VOLTAGE 1Sumatera1011,5 2Jawa, Madura and Bali1112,5 3South Sulawesi, West Sulawesi and Southeast Sulawesi 1213,5 4North Sulawesi, Central Sulawesi, and Gorontalo 1314,5 5West Nusa Tenggara and East Nusa Tenggara 1516,5 6Maluku and Papua1718,5 GEOTHERMAL FEED-IN TARIFF (MEMR Regulation No. 22/2012) ROAD MAP OF GEOTHERMAL DEVELOPMENT (As In Presidential Regulation NO. 5/2006 about National Energy Policy)

Energy and Mineral Resources for People’s Welfare 1. CURRENT CONDITION  Micro/Mini Hydro Power Plant installed capacity: 230 MW  Solar Power Plant installed capacity: MW 2. DEVELOPMENT PROGRAM  To encourage investment in Micro/Mini Hydro and Solar PV Power Plant by cooperatives, private and other business enterprises through the establishment of Feed- in Tariff for Micro/Mini Hydro and Solar PV;  Enhancing the capability of domestic manufacturer;  Improving capacity building and technical assistance;  Providing government fund (APBN) HYDRO POWER AND WIND POWER TARIFF (BASED ON MEMR REGULATION NO 4 YEAR 2012) Notes : National bidding process for Solar PV Quota will be announced by October 2013  Price for Mini and Micro Hydro will be revised to Rp. 656/kWh to Rp. 700 – Rp.850/kWh AREA Price for High Voltage (Rp/kWh) Price for Medium Voltage (Rp/kWh) Jawa and Bali6561,004 Sumatera and Sulawesi7871,205 Kalimantan, West and East Nusa Tenggara 8531,305 Maluku and Papua9841,506 Price (cent USD/kWh) Incentive for Local Module (cent USD/kWh) 2530 SOLAR POWER (PHOTOVOLTAIC) POWER TARIFF (BASED ON MEMR REGULATION NO 17 YEAR 2013)

Energy and Mineral Resources for People’s Welfare 1. CURRENT CONDITION  Bioenergy power plant (on-grid) installed capacity: 71 MW  Bioenergy power plant (off-grid) installed capacity: 612 MW 2. DEVELOPMENT PROGRAM  Appropriate price of electricity (Feed in Tariff);  Export management to secure the supply of biomass power plant feedstock;  Duty exemption of renewable energy equipment and simplification of the procedure ;  Coordination with local governments and stakeholders to increase understanding related to the utilization of waste into electricity to drive domestic product. BIOMASS, BIOGAS, AND MUNICIPAL SOLID WASTE FEED-IN TARIFF (MEMR REGULATION NO. 04 YEAR 2012) NO.ENERGYCAPACITYELECTRICITY BUYING PRICENOTES Miedium Voltage 1.BiomassUp to 10 MWRp. 975,- / kWh X F 2.BiogasUp to 10 MWRp. 975,- / kWh X FNon MSW 3. Municipal Solid Waste (MSW) Up to 10 MWRp. 1050,- / kWhZero waste 4. Municipal Solid Waste Up to 10 MWRp. 850,- / kWhLandfill Low Voltage 1BiomassUp to 10 MWRp ,- / kWh X F 2BiogasUp to 10 MWRp ,- / kWh X FNon MSW 3 Municipal Solid Waste (MSW) Up to 10 MWRp ,- / kWhZero waste 4 Municipal Solid Waste Up to 10 MWRp ,- / kWhLandfill Incentive Factor (F): Jawa, Bali, Sumatera: F = 1 Kalimantan, Sulawesi, West and East Nusa Tenggara: F = 1,2 Maluku and Papua: F = 1,3

Energy and Mineral Resources for People’s Welfare 1. CURRENT CONDITION  Wind Power Plant installed capacity : 1.4 MW  Ocean current/wave still in the stage of pilot project, a few small-scale pilot (10 kW) were built, e.g. at Baron Beach, East Nusa Tenggara Province. 2. DEVELOPMENT PROGRAM  Conducting feasibility study and pilot project for wind and ocean current/wave power in the potential area, e.g East Nusa Tenggara.  Increasing foreign partnership in terms of capacity building, technology transfer in the development of wind and ocean current/wave power.  Encouraging domestic industrial competitiveness to manufacture components of wind and ocean current/wave power.  Developing Feed-in Tariff for wind power.

Energy and Mineral Resources for People’s Welfare  PRODUCTION COST  The production cost is relatively higher than the conventional energy, means, it is difficult to compete with the conventional energy.  INVESTMENT  The investment cost is quite high. However, investment in new renewable energy industry is quite in demand by domestic investors.  Investment for upstream and downstream is not widely carried out in the country; most of the components are still imported.  TECHNOLOGY  Some technologies have been developed by domestic manufacturer, such as small to medium-scale power plant and biogas technology (non-electric).  Renewable energy technologies are still provided and dominated by foreign countries.  RAW MATERIAL AVAILABILITY  The potential of new renewable energy in Indonesia is very large. However, it still required integrated management in the supplying and processing raw materials, especially for bioenergy feedstock.  HUMAN RESOURCE  Quantity and quality of human resources in the field of renewable energy is still quite limited.  Communities’ acceptance for new renewable energy is still relatively low, since most of the people feel more comfortable using conventional energy.

Energy and Mineral Resources for People’s Welfare Pegangsaan Timur Street No. 1A Cikini, Jakarta 10320; Phone/Fax : MINISTRY OF ENERGY AND MINERAL RESOURCES DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION

Energy and Mineral Resources for People’s Welfare NORENEWABLE ENERGYSTRATEGIC ISSUE 1 GEOTHERMAL- 6 STRATEGIC ISSUES 1.Acceleration of geothermal development; 2.Revision of Laws No. 27 Year 2003 on Geothermal; 3.The second revision of Government Regulation No. 59/2007 jo. Government Regulation 70/2010 on Geothermal Working Activity; 4.Revision of MEMR Regulation No. 11/2009 on Implementation Guidelines for Geothermal Operations; 5.Total production of geothermal steam; 6.The number of non-tax revenues of the Geothermal. 2 BIOENERGY - 6 STRATEGIC ISSUES 1.Feed in Tariff (FIT) for utilization of Municipal Solid Waste for power plant; 2.Increase the utilization of Biofuels to be blended with PSO fuel; 3.Increase the utilization of Biofuels to be blended with non PSO fuel; 4.Increase the ability to supply bioenergy for domestic needs; 5.Increase the installed bioenergy power plant (on-grid); 6.Enhance the role of NREEC in regional development through the development of Self Sufficient Village Program (Desa Mandiri Energi)-based on biofuel. 3VARIOUS NEW AND RENEWABLE ENERGY - 6 STRATEGIC ISSUES 1.Increase national electrification ratio through the utilization of various new and renewable energy; 2.Development of Self Sufficient Village Program through the utilization of solar and hydro energy; 3.Encourage private sector participation in the utilization of wind, hydro and solar energy; 4.Harmonization of inter-sectoral policies related to renewable energy development; 5.Sustainability of NRE power plant; 6.Increase power plant capacity of various NRE.

Energy and Mineral Resources for People’s Welfare 1. Enhancing and accelerating investment climate through the new renewable energy partnership; 2. Knowledge and technology transfer in the field of new renewable energy and energy conservation ; 3. Enriching partnership in education and capacity building as well as technical assistance.