Geothermal Sector in Indonesia: Potential, Development, and Perspectives

Transcript

1 Market Study: Geothermal Sector in Indonesia: Potential, Development, and Perspectives Jakarta, 30 September 2008 Commisioned by: Federal Ministry of Economics and Technology

2 List of Abbreviations List of Abbreviations ADB: BAPPENAS: BI: BKPM: BOT: BPMIGAS BPP: CDM: CERs: CFU: CPI: DEG: DPD: DG: DGESGWM: DGEEU: DGMCG: DOE: ESC: GDP: GHG: GOI: GR: GWA: IOCs: IPP: Asian Development Bank Badan Perencanaan dan Pembangunan Nasional (National Development Planning Agency) Bank of Indonesia Badan Koordinasi Penanaman Modal (Investment Coordinating Board) Build-Operate-Transfer Badan Pelaksanaan Minyak dan Gas (Executive Agency for Upstream Oil and Gas Activity) Basic Production Cost Clean Development Mechanism Certified Emission Reductions Carbon Finance Unit Consumer Price Index Deutsche Investitions- und Entwicklungsgesellschaft (German Investment and Development Company) Dewan Perwakilan Daerah (Regional Representatives Assembly) Directorate General Directorate of Geothermal Enterprise Supervision and Ground Water Management Directorate General of Electricity and Energy Utilisation Directorate General Mineral, Coal, and Geothermal Designated Operational Entity Energy Sales Contract Growth Domestic Product Green House Gas Government of Indonesia Government Regulation Geothermal Working Area International Oil Companies Independent Power Producer IUT: Izin Usaha Tetap (Permanent Business License) IUP: Izin Usaha Penambangan (Geothermal Business Permit) JBIC: Japan Bank for International Cooperation JICA: Japan International Corporation Agency JOC: Joint Operation Contract KFW: Kreditanstalt fϋr Wiederaufbau (German Development Bank) LNG: Liquefied Natural Gas LPG: Liquefied Petroleum Gas MD: Ministerial Decree MEMR: Ministry of Energy and Mineral Resources MoF: Ministry of Finance NEP: National Energy Policy ODA: Official Development Assistance OPEC: Organisation of Petroleum Exporting Countries PD: (1) Democrat Party (2) Presidential Decree PDI-P: Partai Demokrasi Indonesia Perjuangan (Indonesia Democratic Party Struggle) PKS: Partai Keadilan Sejahtera (Prosperous Justice Party) PLN: Perusahaan Listrik Negara (State Electricity Company) PMA: Penanaman Modal Asing (Limited Liability Company, incorporated under Indonesian Law) PMDN: Domestic Investment Company PPA: Purchasing Power Agreement PSA: Production Sharing Agreement PT: Perseroan Terbatas (Limited Liability Company) VAT: Value Added Tax VERs: Verified Emission Reductions i

3 List of Units of Measurements List of Units of Measurement b/d: Barrel per Day bn: Billion BOE: Barrel of Oil Equivalent GW: Giga Watt GWh: Giga Watt Hour km: Kilometer kw: Kilo Watt kwh: Kilo Watt Hour m: Million MMSTB: Million Stock Tank Barrel MW: Mega Watt MWh: Mega Watt Hour trn cu ft: Trillion Cubic Feet TSCF: Trillion Standard Cubic Feet ii

4 Table of Contents TABLE OF CONTENTS List of Abbreviations... i List of Units of Measurement... ii TABLE OF CONTENTS... iii INTRODUCTION TO INDONESIA Political Overview Economic Overview Indonesia Germany Bilateral Trade Investment in Indonesia Industrial Sectors Infrastructure... 9 ENERGY SECTOR IN INDONESIA Energy and Electricity Supply Energy and Electricity Consumption Sector Organisation Oil Natural Gas Coal Electricity National Energy Policy (NEP) Central Actors Status of Renewable Energy Sources Hydro Power Wind Energy Biomass Solar Energy...25 DEVELOPMENT IN GEOTHERMAL SECTOR Introduction Drivers for Development of Geothermal Industry Clean Development Mechanism (CDM) Incentives Strategy for Implementing the Targeted Goal Potential Resources Government Policies and Regulations Law No. 27/2003 on Geothermal Government Regulation No. 5/2007 on Guidelines for Geothermal Preliminary Survey Assignment Government Regulation No. 59/2007 on Geothermal Business Activities MoF Regulation No. 177/PMK.011/2007 on Import Duty Exemption MoF Regulation No. 178/PMK.011/2007 on VAT borne by GOI Ministerial Decree No. 14/2008 on Geothermal Pricing Policy Contractual Arrangements Geothermal Business Permit or Ijin Usaha Penambangan (IUP) Barriers to Industry Development Field Development and Contractor Status Pertamina Unocal / Chevron Amoseas (a subsidiary of Chevron)...50 iii

5 Table of Contents PT GeoDipa Star Energy Bali Energy...53 FUTURE DEVELOPMENTS Overview of Geothermal Power Generation Development Project Brownfields and Greenfields Pipeline Projects Available Financing for Geothermal Projects DEG Loan Scheme KfW Loan Scheme Small-Scale Geothermal Potential Upcoming Exhibitions Related to Geothermal...60 CONCLUSION...58 KEY CONTACTS FOR GEOTHERMAL DEVELOPMENT...58 REFERENCES...69 APPENDICES... I I. National Energy Management Blueprint... II II. Clean Energy Policies in Indonesia... III III. Schematic Diagram of Geothermal Energy Utilization... V IV. World Geothermal Generation in VI V. World CO2 Emission...VII VI. Energy Subsidy in Indonesia...VIII VII. Indonesia Energy Balance Table IX For further information, kindly contact: German-Indonesian Chamber of Industry and Commerce (EKONID) Business Development Department Jl. H. Agus Salim No. 115 Jakarta Tel.: Fax: Internet: Contact person: Mr. Adnan Tripradipta adnan.tripradipta@ekonid.or.id This report is compiled from various publications including official data and statistics, newspapers, economic magazines, websites etc... Some information is based on interview with experts from the industry. EKONID is not responsible for any inaccuracy of data or information given by resource persons / institutions. iv