By:

Dr. Ir. Djadjang Sukarna Secretary of Directorate General of New Renewable Energy and Energy Conservation

Presented at:

Innovation by Industrial-academic Collaboration

Jakarta, June 12th 2012

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

2012

Directorate General

NREEC

OUTLINE

I. Current Condition

II. Energy Policies and Strategies

III. Roadmap of New Renewable Energy

2010 - 2015

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Directorate General

NREEC

CONDITION OF 2011

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1. Public access to energy (modern) is still limited:

a. Electrification ratio (2011) is 72.95%

(27.05% of households not yet electrified);

b. Less of development of energy

infrastructure particularly in rural / remote

areas and outer islands.

2. The average of growth rate of energy

consumption is 7% per year ;

3. High dependence on fossil energy while it

reserves are more limited;

4. Utilization of renewable energy and

implementation of Energy Conservation is not

optimal;

5. Linkage to environmental issues:

a. Mitigation of climate change;

b. Carbon trading;

c. National commitment to reducing

emissions 26% by 2020;

2011 Total Energy Mix

1176 million BOE

Share of Non Fossil Energy 5%

NRE 5%

Coal 24%

Gas 24%

Oil 47%

2012

Directorate General

NREEC

ENERGY RESERVES AND PRODUCTION

NO NON FOSSIL ENERGY RESOURCES INSTALLED CAPACITY RATIO IC/R

(%)

1 2 3 4 5 = 4/3

1 Hydro 75.670 MW 6.654,29 MW 8,8%

2 Geothermal 29.038 MW 1.226 MW 4,2%

3 Mini/Micro Hydro 769,69 MW 228,983 MW 29,75%

4 Biomass 49.810 MW 1.618,40 MW 3,25 %

5 Solar Energy 4,80 kWh/m2/day 22,45 MW -

6 Wind Energy 3 6 m/s 1,87 MW -

7 Uranium 3.000 MW *) 30 MW **) 1.00

*) only in Kalan West Kalimantan

**) non energy, only for research

NO FOSSIL ENERGY RESERVES PRODUCTION

PER YEAR

RESERVE TO PRODUCTION

RATIO

1 2 3 4 5 = 4/3

1 Oil 4.0 billion barel 347 million barel 11 years

2 Gas 104.71 TSCF 3212 BSCF 32 years

3 Coal 28 billion ton 329 million ton 85 years

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Directorate General

NREEC

POLICY DIRECTION

Busin

ess

as u

su

al

Pre

sid

ent

Regula

tion

5 / 2

006

NRE

Gas

Oil

Oil

24%

24 %

47%

5 %

NRE

Gas

Coal

Oil

2011 2015 2020

2025

ENERGY

CONSERVATION

(15.6%)

EN

ER

GY

DIV

ER

SIF

ICA

TIO

N

25 %

32%

23%

20%

2785

Million BOE

1176

Million BOE

3200

Million BOE

20%

30%

33%

17%

2419

Million BOE

1649

Million BOE

20,6%

34.6%

41.7%

3,1%

3298

Million BOE Vis

ion

25

/25

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2012

Directorate General

NREEC

1. Energy Conservation to improve efficiency in energy utilization

from up-stream up to down-stream (Demand Side) i.e industrial,

transportation, household and commercial sector

2. Energy Diversification to increase new renewable energy share

in national energy mix (Supply Side) as below

New Energy

a. Liquefied Coal,

b. Coal Bed Methane,

c. Gasified Coal,

d. Nuclear,

e. Hydrogen,

f. Other Methanes.

Renewable Energy

a. Geothermal,

b. Bioenergy,

c. Hydro,

d. Solar,

e. Wind,

f. Ocean.

POLICIES

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2012

Directorate General

NREEC

STRATEGY FRAMEWORK Energy diversification: to increase the utilization of new renewable energy.

Geothermal power plants Biodiesel Municipal solid waste power plants

Energy conservation: to have the sectors of household, commercial, industry, and transportation use the energy efficiently.

Mandatory energy management for energy user > 6000 TOE/years Labelization of energy efficiency products Sosialization of energy efficiency

Transformation Energy management : to change the paradigm of energy management with orientation to use more NRE, also to develop small scale NRE with local resources.

Development of Self Suficient Energy Village (Desa Mandiri Energi, DME) Micro and pyco Hydro Powers Solar Energy (Photo Voltaic) Home System (100 W) Bio Digester

POLICY INSTRUMENTS Fiscal

Fiscal incentive for NRE development Pricing for new renewable energy (Feed-in Tariff/FIT) Renewable Portfolio Standard (RPS)

STRATEGY FRAMEWORK AND POLICY INSTRUMENTS

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Directorate General

NREEC

Energy Sources 2011 2012 2013 2014 2015

Biofuel (fuel), Million KL 0,4 1,4 2,6 6,4 11,8

Biomass Waste (electricity), MW 520 541 700 1.072 1.287

Geothermal (electricity), MW 1.226 1.341 1.344 1.719 3.516

Hydro (electricity), MW 5.915 5.915 5.915 6.128 7.488

Ocean Power (electricity), MW 0,002 0,022 0,082 0,642 2,202

Solar Power (electricity), MW 24 35 103 228 773

Wind and other RE (electricity), MW 3 18 86 304 737

CUMULATIVE CAPACITY

FUEL AND POWER PLAN FROM NRE 2011 2015

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2012

Directorate General

NREEC

No Development 2010 2011 2012 2013 2014 2015

Geothermal Development

1. Added Capacity (MW) 37 115 3 375 1.797

2. Installed Capacity (MW) 1.189 1.226 1.341 1.344 1.719 3.516

GEOTHERMAL POWER PLANT DEVELOPMENT

2010 2015

Note:

- CF Geothermal Power Plant = 90%

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2012

Directorate General

NREEC

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No Development 2010 2011 2012 2013 2014 2015

Waste Biomass Development

1. Added Capacity (MW) 21 159 172 415

2. Installed Capacity (MW) 500 520 541 700 1.072 1.287

WASTE BIOMASS POWER PLANT DEVELOPMENT

2010 - 2015

Note:

- CF Waste Biomass = 70%

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2012

Directorate General

NREEC

BIOFUEL DEVELOPMENT

2010 - 2015

No Development 2010 2011 2012 2013 2014 2015

Biofuel Development

1. Added Production (Million KL) -- 0,9 1,2 3,8 5,4

2. Production of Biofuel (Million KL) 0,4 1,4 2,6 6,4 11,8

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2012

Directorate General

NREEC

HYDRO POWER PLANT DEVELOPMENT

2010 - 2015

No Development 2010 2011 2012 2013 2014 2015

Hydro Development

1. Added Capacity (MW) 204 -- -- 213 1.360

2. Installed Capacity (MW) 5.711 5.915 5.915 5.915 6.128 7.488

Note:

- CF Hydro Power Plant = 40%

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2012

Directorate General

NREEC

No Development 2010 2011 2012 2013 2014 2015

Solar Development

1. Added Capacity (MW) 4 11 68 125 545

2. Installed Capacity (MW) 20 24 35 103 228 773

SOLAR POWER PLANT DEVELOPMENT

2010 - 2015

Note:

- CF Solar Power Plant = 40%

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2012

Directorate General

NREEC

No Development 2010 2011 2012 2013 2014 2015

Ocean Power Development

1. Added Capacity (MW) -- 0,02 0,06 0,56 1,56

2. Installed Capacity (MW) 0,002 0,002 0,022 0,082 0,642 2,202

OCEAN POWER PLANT DEVELOPMENT

2010 - 2015

Note:

- CF Ocean Power Plant = 60%

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2012

Directorate General

NREEC

No Development 2010 2011 2012 2013 2014 2015

Wind Power (and other RE) Development

1. Added Capacity (MW) 1 15 68 218 433

2. Installed Capacity (MW) 2 3 18 86 304 737

WIND POWER PLANT DEVELOPMENT (AND OTHER RE)

2010 - 2015

Note:

- CF Wind Power Plant = 40%

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2012

Directorate General

NREEC

Pricing Policy

Ministerial Regulation of Minister of Energy and Mineral Resources No. 02/2011 on geothermal price structure. The MR gives Ceiling price US $ 9,7 cents/kWh from

geothermal power plant.

Fiscal incentives for geothermal development (based on Government Regulation No. 62/2008 jo No. 1/2007;

Ministerial Regulation of Minister of Finance No. 177/PMK.011/2007 on Exemption from import duty on Import of Goods for Upstream Oil and Gas and Geothermal

Ministerial Regulation of Minister of Finance No. 22/PMK.011/2011 on Government-borne value added tax on Import of Goods For Upstream Oil And Gas

Exploration And Geothermal Operations :

- 30% of corporate income tax;

- 10% of added-value tax paid by the GoI;

- Custom duties exemption for geothermal developer;

- 25% per year depreciation for 8 years with double declining balance method;

and

- Investment tax credit 5% per year for 6 years.

Currently the mechanism of Feed in Tariff for each GWA is being developed by the GoI in order to make geothermal business more attractive to investors.

GOVERNMENT POLICIES TO SCALE UP GEOTHERMAL

DEVELOPMENT IN INDONESIA

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2012

Directorate General

NREEC

MINISTRY OF FINANCE REGULATION NUMBER 21/PMK.011/2010 Regulation of tax and customs facility for renewable energy resources utilization activities

Income Tax

FINANCIAL INSTRUMENTS

SUPPORT

Value Added

Tax

Reduced net income for 30% of total investment

accelerated depreciation Imposition

of Income Tax on dividend p

aid

to Foreign Taxable at 10%

compensation for losses in certain circumstances

Exemptions of VAT for

Taxable Goods,

machinery and

equipment for RE

utilization (not

included spare parts)

Regulated in State

Annual Budget

Law and its

implementing

regulations

Import Duty Tax Borne by

Government

Exemptions for Import Duty

of

Goods and Machinery for development and

capital investment

Capital Goods Imports for construction and

development of electricity

industry

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2012

Directorate General

NREEC

MINISTRY OF FINANCE REGULATION NUMBER 130/PMK.011/2011 Concerning on Provision of Exemption Facilities or Reduction of Income Tax

can get facilities:

EXEMPTION OR REDUCTION OF

CORPORATE INCOME TAX

Minister of Finance may provide facilities Corporate Income Tax exemption or reduction for a period EXCEED

predetermined period of time

REDUCTION OF CORPORATE INCOME TAX

50% of Income Tax Payable for 2 tax yearh

After the end of Corporate Income Tax exemption facility

EXEMPTION OF CORPORATE INCOME TAX

5 - 10 tax year

CORPORATE

TAXPAYERS

PIONEER INDUSTRIES

Having a new investment plan min. IDR 1 trillion

Placing funds in the Indonesian banking min 10% from the total capital investment plan

Existed as ENTITY INDONESIA

Industry of Basic Metals Manufacutre Industry of Oil Refining and / or Basic Organic

Chemicals sourced from Oil and Natural Gas

Industry of Machinery INDUSTRY OF RENEWABLE RESOURCES FIELD Industry of Communications Equipment

PIONEER INDUSTRIES

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*) The facility can be utilized if:

1. Had executed the entire capital investment

2. Has been produced commercially

2012

Directorate General

NREEC

PRICING FOR NEW RENEWABLE ENERGY

FEED-IN TARIFF

Declared : Biomass, Biogas and Municipal Solid Waste

(Ministerial Decree No. 4/2012)

Ready to declare : Geothermal and Hydro

Under review : Solar and Wind

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Directorate General

NREEC

Concerning On Electricity Price Purchased by PT. PLN from Small Scale and Medium Scale Renewable Energy

Electricity Generation or Excess Power

Note : *) Based on Act No. 18 Year 2008 concerning to Waste Management.

F as an incentive factor based on the region where the power plant installed, as follows:

Jawa, Bali, and Sumatera region : F = 1

Kalimantan, Sulawesi , NTB and NTT region : F = 1,2

Maluku and Papua region : F = 1,3

No. Energy Capacity Electricity Tariff Note

Medium Voltage

1. Biomassa until 10 MW Rp. 975,- / kWh X F

2. Biogas until 10 MW Rp. 975,- / kWh X F Non Municipal Solid Waste

3. Municipal Solid Waste (MSW) until 10 MW Rp. 1050,- / kWh Zero waste *)

4. Municipal Solid Waste (MSW) until 10 MW Rp. 850,- / kWh Landfill *)

Low Voltage

1 Biomassa until 10 MW Rp. 1.325,- / kWh X F

2 Biogas until 10 MW Rp. 1.325,- / kWh X F Non Municipal Solid Waste

3 Municipal Solid Waste (MSW) until 10 MW Rp. 1.398,- / kWh Zero waste *)

4 Municipal Solid Waste (MSW) until 10 MW Rp. 1.198,- / kWh Landfill *)

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MINISTER OF ENERGY AND MINERAL RESOURCES DECREE

NUMBER 4 YEAR 2012

2012

Directorate General

NREEC

Go Green Indonesia ! green energy, future energy

Jalan Jenderal Gatot Subroto, Kav. 49 Jakarta 12950; Telp: 021-52904235; 5250575; Faks: 021-25529106; 25529212

Email: bahan@ebtke.esdm.go.id ; bahan_ebtke@yahoo.com

MINISTRY OF ENERGY AND MINERAL RESOURCES REPUBLIC OF INDONESIA

DIRECTORATE GENERAL OF NEW, RENEWABLE ENERGY, AND ENERGY CONSERVATION

Thank You

www.ebtke.esdm.go.id

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