Ministry of Energy and Mineral Resources Directorate General of Electricity Republic of Indonesia

Electricity Investment Opportunity In Indonesia Economic Development Corridors

Presented at

The 12th

Indonesia Japan Energy Round Table Tokyo, October 17, 17, 2011

ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT (MP3EI) 2011-2025

The Illustration of Indonesias Economic Transformation Acceleration

POSTURE OF INDONESIA ECONOMIC CORRIDOR (EC)

1) Sumatra EC as a Center for Production and Processing of Natural Resources and As Nations 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 EC as a Center for Development of Food, Fisheries, Energy, and National Mining

The development of Economic Corridors requires a large amount of electricity supply. Under MP3EI, the additional electricity supply needed in Indonesia by the year 2025 is projected to reach about 90,000 MW. Of these, most of the electricity will be used to support the construction and development of major economic activities in the corridor.

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 ).
(CO2 ~ 370 mill. Ton)

2009

2025 (BaU)
(CO2 ~ 1,150 mill. Ton)

2025 (Optimized)
(as Presidential Regulation No. 5/2006)

(CO2 ~ 950 mill. Ton)

Optimization of Energy Management

NATIONAL ENERGY SUPPLY MIX

Hydro 2.5% Coal 26.6% Gas 22.1%

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%

Oil 47.5%

ENERGY MIX - 2010

Electricity growth about 6.7% Energy utilization is not efficient Utilization of renewable energy is not optimal.

Indonesian Power Sector Infrastructure (Current Status)

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

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

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

POWER GENERATION CURRENT CONDITION

Power Generation by Owner

Total installed capacity is about 35,313 MW, which consist of those owned by PLNs (27,849 MW), IPPs (6,331 MW) and PPUs (1,133 MW).
Power Generation by Type

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

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.
Note: CFPP : Coal Fired Power Plant CCPP : Combine Cycle Power Plant DPP : Diesel Power Plant HEPP : Hydro Electric Power Plant GTPP : Gas Turbine Power Plant GeoPP : Geothermal Power Plant MHPP GEPP WTPP : Mini Hydro Power Plant : Gas Engine Power Plant : Wind Turbine Power Plant CGPP= Coal Gasification Power Plant

FUEL ENERGY DIVERSIFICATION POLICY (Constraints and Opportunities)

CONSTRAINTS: Energy demand is still high and increasing Location of energy supply is far away from energy demand location Dependence on oil is still high Development of new and renewable energy is not optimal yet Energy utilization efficiency is still low.

OPPORTUNITIES: Oil resources availability will be limited and expensive Strong government commitment to encourage the utilization of new and renewable energy Renewable energy potential is big and scattered Energy saving potential is still significant Availability of advanced technology.

ENERGY MIX FOR POWER GENERATION

100% 80%

60%

40%

20%

0% Oil Bio Diesel Hydro Geothermal Gas Coal

2005 39% 0% 10% 3% 16% 33%

2006 37% 0% 8% 3% 15% 37%

2007 27% 0% 8% 3% 19% 43%

2008 36% 0% 9% 3% 17% 35%

2009 25% 0% 8% 3% 25% 39%

2010 22% 0% 12% 3% 25% 38%

2011 19% 0.08% 7% 2% 26% 46%

2012 8.11% 0.50% 6.77% 2.17% 25.78% 56.66%

2013 7% 0.5% 6% 2% 25% 59%

2014 5% 0.5% 6% 3% 26% 60%

2015 4% 0.5% 6% 3% 27% 59%

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.

POWER GENERATION DEVELOPMENT PLANNING

Total power generation that will be developed from 2011 -2019 is about of 55.8 GW or in average 6.2 GW p.a PLN will develop about of 57% of the total capacity and the rest (43%) will be developed by IPP/private Diesel Power Plant will still be developed, but only dedicated to isolated/remote area.

INVESTMENT REQUIREMENT 2011 2019

(in million USD)

Infrastructure

2011

2012 6,542 1,204 1,165 501 189 184 9,786

2013

2014

2015

2016

2017

2018 4,816 155 537 545 218 247 6,518

2019 5,211 235 512 511 195 254 6,918

TOTAL 61,587 5,185 6,919 4,604 1,826 1,937 82,058

Generation 12,798 Transmission 1,081 Substation 1,291 Distribution System MV-Medium Voltage 568 LV-Low Voltage 187 Distribution Substation 198 TOTAL 16,122

7,978 12,790 4,504 534 808 750 793 916 639 425 449 581 192 203 217 194 193 221 10,116 15,359 6,913

2,934 4,014 321 97 638 428 486 538 206 219 210 236 4,795 5,532

TARGET OF ENERGY MIX FOR POWER GENERATION

2011 2019
Hydro 5% Gas 21%
Coal 46%

Hydro 7%

Gas 26%

Geothermal 2%

Geothermal 13%
Oil 19%

Coal 58%

Oil 3%

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

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 MW 10.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)

1 2

30 4 5 26 3 7 29 6 25 31 34

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)

8 9

28 27 35 32 10 33 13 14 36

37

11 12 15

16

20 19 18 22 21 24 23

17

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

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

STATUS FAST TRACK PROGRAM 10,000 MW PHASE I AS TODAY

CFPP 2 PAPUA (2 x 10 MW) - Jayapura CFPP 2 SUMUT ( 2 x 220 MW) - Pangkalan Susu CFPP 2 JABAR (3 x 350 MW) - Palabuhan Ratu CFPP MALUKU UTARA (2 x 7 MW) - Tidore CFPP 1 JATIM (2 x 315 MW) - Pacitan CFPP SULSEL (2 x 50 MW) - Barru CFPP LAMPUNG (2 x 100 MW) - Tarahan Baru CFPP 1 NTT (2 x 7 MW) - Ende CFPP SULTRA (2 x 10 MW) - Kendari CFPP KEPRI (2 x 7 MW) - Tanjung Balai Karimun CFPP 1 JABAR (3 x 330 MW) - Indramayu CFPP 1 JATENG (2 x 315 MW) - Rembang CFPP 3 BABEL (2 x 30 MW) - Bangka Baru CFPP 2 JATIM (1 x 660 MW) - Paiton CFPP KALSEL ( 2 x 65 MW) - Asam-asam CFPP 2 SULUT (2 x 25 MW) - Amurang CFPP 3 BANTEN (3 x 315 MW) - Lontar CFPP 1 BANTEN (1 x 625 MW) - Suralaya CFPP 2 BANTEN (2 x 300 MW) - Labuan

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

STATUS FAST TRACK PROGRAM 10,000 MW PHASE I AS TODAY

CFPP 1 PAPUA (2 x 7 MW) - Timika CFPP RIAU (2 x 110 MW) - Tenayan CFPP 2 RIAU (2 x 7 MW) - Selat Panjang CFPP 1 RIAU (2 x 10 MW) - Bengkalis CFPP KALTIM (2 x 100 MW) - Teluk Balikpapan CFPP 1 KALTENG (2 x 60 MW) - Pulang Pisau CFPP 2 KALBAR (2 x 27,5 MW) - Bengkayang CFPP 2 JATENG (1 x 660 MW) - Adipala CFPP MALUKU (2 x 15 MW) - Ambon CFPP 1 KALBAR (2 x 50 MW) - Parit Baru CFPP 3 JATIM (2 x 350 MW) - Tanjung Awar-Awar CFPP 2 NTB (2 x 25 MW) - Lombok CFPP GORONTALO (2 x 25 MW) - Anggrek CFPP 1 NTB (2 x 10 MW) - Bima CFPP 2 NTT (2 x 16,5 MW) - Kupang CFPP 4 BABEL (2 x 16,5 MW) - Belitung CFPP SUMBAR (2 x 112 MW) - Teluk Sirih CFPP NAD (2 x 110 MW) - Nagan Raya CFPP 2 PAPUA (2 x 10 MW) - Jayapura

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FAST TRACK PROGRAM 10,000 MW PHASE II

TOTAL
SUMATERA
HEPP GeoPP CFPP CGPP TOTAL : 204 MW : 1.767 MW : 531 MW : 16 MW : 2.518 MW

KALIMANTAN
CFPP CGPP CCPP GTPP TOTAL : 612 MW : 8 MW : 120 MW : 100 MW : 840 MW

SULAWESI
GeoPP CFPP CGPP CCPP TOTAL : 145 MW : 360 MW : 24 MW : 240 MW : 769 MW

HEPP GeoPP CFPP CGPP GTPP CCPP TOTAL

: : : : : : :

1.204 3.967 3.303 88 100 860 9.522

MW MW MW MW MW MW MW

PAPUA
CFPP : 116 MW TOTAL : 116 MW

MALUKU
GeoPP : 35 MW CFPP : 14 MW CGPP : 24 MW TOTAL : 73 MW

NTB JAMALI
GeoPP CFPP CCPP HEPP TOTAL : : : : : 1.970 MW 1.600 MW 500 MW 1.000 MW 5.070 MW GeoPP : 40 MW CFPP : 70 MW TOTAL : 110 MW

NTT
CGPP : 16 MW GeoPP : 10 MW TOTAL : 26 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 MW PHASE II BASED ON IT DEVELOPER

PLN+IPP: 92 Project, 9,522 MW

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

PLN: 21 Project, 4,216 MW

HEPP GTPP : Hydro Electric Power Plant : Gas Turbine Power Plant

IPP: 71 Project, 5,306 MW

GeoPP : Geothermal Power Plant CGPP : Coal Gasification Power Plant

PROGRESS OF FAST TRACK PROGRAM 10,000 MW PHASE II

PLN (21 project, 4,216 MW): Prepare for F/S: 8 project (1,390 MW) Land Acquisition: 1 project (1,000 MW) Tender: 8 project (1,672 MW) Construction: 4 project (154 MW) IPP (71 project, 5,306 MW): PPA finished: 8 project (975 MW) Tender of Geothermal Mining Working Area (WKP) 20 project (1,905 MW) Tender: 42 project (2,226 MW) Terminate:1 project (200 MW)

INVESTMENT MECHANISM
Planning Planning The The Government Government issue issue the the National National Electricity Electricity General General Plan Plan RUKN RUKN The The Local Local Government Government issue issue the the Regional Regional Electricity Electricity General General Plan Plan RUKD RUKD Licensee Licensee provide provide the the Electricity Electricity Business Business Plan Plan RUPTL RUPTL RUKN, RUKN, RUKD RUKD and and RUPTL RUPTL will will be be reviewed reviewed every every year year (Rolling (Rolling Plan). Plan). Implementer Implementer Other Other State State Own Own Enterprise Enterprise (BUMN), (BUMN), Local Local Own Own Enterprise Enterprise (BUMD), (BUMD), Private Private and and Cooperative Cooperative BUMN BUMN given given the the first first priority priority

Procurement Procurement Process Process Bidding Bidding Direct Direct Selection Selection Direct Direct Appointee: Appointee: renewable renewable energy energy power power plant, plant, marginal marginal gas, gas, mine mine mounth mounth power power plant, plant, excess excess power, power, system system in in crisis crisis condition, condition, and and expansion expansion of of the the existing/installed existing/installed power power plant. plant. Financing Financing State State Funding Funding (APBN) (APBN) PLNs PLNs Funding Funding :: SLA, SLA, obligation, obligation, loan, loan, revenue revenue Private Private :: for for private private projects projects (IPP). (IPP).
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