Indonesian Energy Updates: Policy and Investment Opportunities Edition #1 - October 2013. Highlight: Solar PV and Assessment on the New MEMR Decree

China  1,3  Bi  

India  1,2  Bi  

US  310  Mn  

Indonesia 242 Mn Brazil

Consultancy Division Energy Nusantara Indonesia's Leading Energy Network Divisions: Consultancy, Capacity Building, Strategic Partnership, Business Networking, MICE

Inquiries Phone: +62-21-8307426, +62-898-8807956 Email: info@energynusantara.com FB Group & Page: Energy Nusantara Twitter & LinkedIn: energynusantara Website: www.energynusantara.com

Head Office

Indonesia Stock Exchange Building Tower II 17th Fl

Jl. Jend. Sudirman Kav. 52-23 Jakarta 12190, Indonesia

International Offices in France and Germany

Oil and Gas (up-mid-downstream value chain) including Unconventional on CBM, Hydrate and Shale Gas; Coal, Mining and Mineral; Renewable Energy on Geothermal, Solar PV, Wind, Bio, Waste, Hydro, and Nuclear; Electricity Power

# Publication in Slides

- Consultancy division portfolio - Indonesia and its energy sector strategic role in global portfolio - Indonesian energy regulation and policy direction towards energy mix target in 2025 - Key energy stakeholders in Indonesia - Indonesian energy sector overview: oil & gas, coal, mineral, renewable energy and electricity Power # Video of floating storage and regasification unit (FSRU) visit [8 mins] # Conclusion and Remarks

Outline

Disclaimer This presentation has been prepared by PT Komunitas Energi Nusantara (the “EN”) independently and is circulated for the purpose of general information only. It is not intended for the specific person who may receive this report. The information in this report has been obtained from sources which we deem reliable. No warranty (expressed or implied) is made to the accuracy or completeness of the information. All opinions and estimations included in this report constitute our judgment as of this date and are subject to change without prior notice. We disclaim any responsibility or liability which may be brought against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this report and neither the EN and/or its respective employees and/or agents accepts liability for any errors, omissions, negligent or otherwise, in this report and any inaccuracy herein or omission here from which might otherwise arise.

Energy Nusantara

Consultancy

Capacity Building

MICE Strategic Partnership

Business Networking

Consultancy Division of Energy Nusantara There are all 5 Divisions: Consultancy, Capacity Building, Business Networking, Strategic Partnership and MICE (Meeting, Incentive, Convention, Exhibition)

Portfolio Activities Explanation

Monthly Publication on Indonesian Energy Updates

Energy Nusantara published monthly publication on "Indonesian Energy Updates: Policy and Investment Opportunities" which covers energy spectrum in Indonesia: Oil and Gas (up-mid-downstream value chain) including Unconventional on CBM, Hydrate and Shale Gas; Coal, Mining and Mineral; Renewable Energy on Geothermal, Solar PV, Wind, Bio, Waste, Hydro, and Nuclear; Electricity Power. Access to this publication is complimentary to its members.

Investor Roadshow Provided analysis and presentation on Indonesian Energy Sector for clients on Investor Roadshow in August 2013 in Singapore. The clients are BNP Paribas, J.P. Morgan, Nomura, Meryl Lynch, Pine Bridge, GE Asset Management, Morgan Stanley, GIC and Invesco Investment Banking

Business Development Performed business development on Pertamina's field acquisition in Republic of Yemen

Engineering Conducted engineering activity on the evaluation of Plan of Development (POD) SKKMIGAS (formerly BPMIGAS) : •  ENI Muara Bakau BV in Jangkrik field, South Kalimantan •  Tately NV in Budi Field Musi Banyuasin, South Sumatra

Social Community and Economic Study

Conducted social community and economic study with local multiplier impact analysis on POD and Plan of Further Development (POFD) of PSC Companies at: •  Tropik Energi Pandan (TEP) in Musi Rawas Field, South

Sumatra •  Medco E&P Indonesia in Musi Banyuasi Block, South Sumatra •  PetroChina International Jabung Ltd in Tanjung Jabung Timur

Field, Jambi •  Pertamina EP in Rantau Field - North Sumatra, Tapian Timur

Field/ Kutai Barat Field - Central Kalimantan and Talang Jimar Field - South Sumatra

Quality and HSE Management System

Quality, safety, health & environment management system (ISO 9001, ISO 14001, OHSAS 18001, ISO/TS 16949)

Political Risk, Stakeholder Engagement

Performed political risk and analysis, stakeholder engagement, government policy and corporate development

Feasibility Study and Financing

Conducted feasibility study and financing of Solar PV Project, engaged with potential investors.

Energy Nusantara through its Consultancy Division providing wide range of services starting from guidance on how to do energy business in Indonesia, partnership for training and capacity building, and give support to business partners who are looking for strategic partners and investment in Indonesia.

Head Office Indonesia Stock Exchange Building, Tower II 17th Fl Jl. Jend. Sudirman Kav. 52-23 Jakarta 12190, Indonesia International Offices in France and Germany Phone: +62-21-8307426, +62-898-8807956 Email: info@energynusantara.com Website: www.energynusantara.com

Source: *Estimation 2010, DEN 2010-2025, **BAU EBTKE Source: Energy Nusantara, Bank Indonesia, Pertamina, MEMR 2013, McKinsey, IEA, FGE - FACTS Global Energy

Indonesia - in a nutshell. Key player in global power

China  1,3  Bi  

India  1,2  Bi  

US  310  Mn  

Indonesia 242 Mn

Archipelago Country Indonesia is the biggest archipelago country in the world with 13,667 islands, its 5 main islands are Sumatra, Kalimantan, Java, Sulawesi and Papua. 70% of its territory are ocean. For comparison, Philippines is the 2nd largest with approximately 7000ish islands Top 5 Population Indonesia is the 4th most populous nation in the world, with 60% is under the age of 39 providing a dynamic workforce G-20 Countries Currently 16th largest economy, Indonesia is projected to be 7th largest in the world by 2030 Stable GDP Growth Indonesia is one of the most stable consistent growth countries with average GDP growth of around 6 - 6.5 %

Brazil

-Exports contribute the smallest portion of GDP growth, while consumption reached above 60% portion. -The driver of the growth is not from its large labor population size, but the improved labor productivity -Over the last decade, 61% of growth came from improved productivity, versus 39% resulting from the increased number of labor input itself -Indonesia is ranked number 25 on macroeconomic stability in 2012, up from rank 89 in 2007 -Energy is Indonesia’s backbone and engine of economic growth with oil and gas is the prominent part

GDP = US$ 700B with its estimated growth at 6.5%

Energy Supply Security; Utilization & Pricing

Energy Conservation

Energy Demand, growing by population & current industry age

Increasing National Capacity In Oil And Gas Industry

ECONOMY & ENERGY

§  Maintain oil production level of 1 Million BOPD

§  50% national operatorship §  Security of domestic fuel & industrial

feedstock §  91% local content (goods and services) §  99% skilled national workforce §  Achieving oil and gas safety, zero

accidents, zero failure, and achievement of zero flares, and zero waste

INDONESIA ENERGY TARGETS FOR 2025 5 %

9 %

5 %

2 %

Growth/ year

Indonesia Energy Demand 2025 Million ton oil equivalent, per year

2010

Growth 2010-2025

Others.1 24

Natural Gas 38

Coal 75

Oil 63

Surplus/Defisit Million ton oil equivalent

38

63

79

65

55

128

24

7529 104

33 7128(~30 bcm)

42(~50 bcm)

109(~210 Mt)

113

-86(~1.7 Mmbpd)

-18(~0.4 Mmbpd)

Decreasing on Gas export for domestic demand Securing oil supply is important ~70% oil is imported in 2025 vs. ~25% currently.

1) Solar, wind, hydro, geothermal, nuclear, fire wood, manure, biomass (rice residue, sugar, rubber, palm, agribusiness cogeneration). Mton = Million tons; Bcm = Billion cubic meter. Mmbpd = Million barrel of oil per day.

PESTLE: Political, Economic, Sociological, Technological on Indonesia’s Macro Situation

Nationalism spirit Regional Autonomy Election year 2014

G 20 Countries High GDP Growth of 7-8%/ year

Job Creation Land Acquisition Manpower availability to match job qualification

Deepwater in offshore in frontier area in the eastern part

Oil and Gas Law Amendment Geothermal Law Amendment Energy Mix Policy

Climate Change

PORTER’s Five Forces Model Analysis on Energy sector in Indonesia

Overseas buyer for Fossil Energy and Domestic for all energy types Asia Pacific as the highest economic growth region in high demand for energy

[LOW]

Competition among PSCs Major oil and gas companies

[STRONG]

Qualified and proven EPC contractor Equipment and service availability Advanced and proprietary technology

[STRONG]

High investment and operation, skilled man power, technology Procedures and Licensing

[STRONG]

Oil and gas Vs cheaper coal, development of renewable energy and unconventional resources

[LOW]

Source: Energy Nusantara, BP Statistical Review 2013, IEA 2012

Energy outlook 2030. Gas will likely dominate with global resources exceed 250 years of current production. Indonesia is among top 3 both reserve and production of oil and gas in Asia Pacific and is currently also the biggest thermal coal exporter country, thus Indonesia is strategically plays important role in the region and global power

Asia Pacific Countries

Gas Oil

Reserve (TCF)

Production (BCFD)

Reserve (Bil BO)

Production (MBOPD)

Australia 132 (1) 4.7 (4) 3.9 (5) 458 (5) China 109 10.3 15.5 4158 Indonesia 103 (3) 6.9 (2) 4.7 (3) 918 (2) Malaysia 46 6.3 4.5 657 India 47 3.9 5.6 894

Source: *Estimation 2010, DEN 2010-2025, **BAU EBTKE Source: Energy Nusantara, MP3EI

Masterplan acceleration and expansion of economic development 2011-2025 (MP3EI)

Energy Security: National Interest Vs Foreign Threat. Indonesia has 10 bordering countries: India, Thailand, Malaysia, Singapore, Vietnam, Phillippine, Palau, PNG, Australia and Timor Leste. Just slightly north of Indonesia’s natuna sea, there is a territorial disputed area over the ownership of Spratly islands among China, Brunei, Malaysia, Philippines, Taiwan and Vietnam. The trigger was the giant oil discovery in 1968 in the area with estimation of the reserve is 4th largest in the world

Law No 30 / 2007, Oil and Gas Law No. 22/ 2001 Energy Diversification Presidential Regulation No. 5 / 2006 National Energy Policy (17% from Renewable Energy) Vision 25/25 – Ministry of Energy and Mineral Resources (MEMR) and National Energy Council

to achieve 25% from renewable energy in 2025

NRE

Gas Coal

Oil 21.9 % 26.38 %

47 %

4.8 %

2010 2015 2020 2025

ENERGY CONSERVATION (33,85%)

ENER

GY

DIVER

SIFICATIO

N

25 %

22 %

30 %

23 % 41.7 %

20,6 %

34.6 %

3.1 % 4300 Million BOE

2852 Million BOE

1066 Million BOE

3200 Million BOE

20 %

30 %

33 %

17 %

MEMR VISION 25/25

BAU

PRIMARY ENERGY MIX 2010

Policy Direction Goals

Source: *Estimation 2010, DEN 2010-2025, **BAU EBTKE

PRIMARY ENERGY MIX 2025

Oil20%

Coal  33%

Natural  Gas30% Biofuels

5%

Geothermal5%

Solar,  Wind,  Biomass,  Nuclear,  Hydro

5%Liquified  Coal

2%

Renewable  Energy17%

Primary  Energy  Mix  (2025)

•  Reduce of oil’s role in energy mix •  Fulfillment of domestic energy needs •  Price subsidy become direct subsidy •  Electrification ratio 93% in 2025 •  Energy Elasticity less than 1 in 2025 •  New & Renewable Energy can be developed optimally Energy Law No. 30/ 2007

v  Diversification : Towards Renewable Energy v  Conservation : Efficient Energy Use v  Intensification : Exploitation of Energy Sources to increase resources Geothermal Law No. 27/ 2003 Oil and Gas Law No. 22/ 2001

Source: Energy Nusantara, Pertamina, MEMR 2013

Indonesian Energy Regulation and Policy Direction. Except for oil, others are projected to increase in energy mix target in 2025. Oil and gas milestone timeline: oil and gas law no. 22/ 2001 resulting SKKMigas and BPHMigas

Regulation Hierarchy 1. Undang Undang 2 .Peraturan Pemerintah 3. Peraturan Presiden 4. Instruksi Presiden 5. Keputusan Presiden 6. Peraturan Menteri 7. Instruksi Menteri 8. etc

Indonesian Key Energy Stakeholders

PRESIDENT 2004-2009, 2009-2014

BPHMIGAS Ministry of State Enterprise (BUMN)

•  Govt. Liaison for oil & gas

•  Determine policy on oil & gas activities

•  Award PSC

•  Undertake / supervise on SOE, PERTAMINA, PGN

Ditjen Oil and Gas SKKMigas

Downstream

§  Refinery, marketing, pipelines, distribution and logistic.

§  This includes tariff, supply regulation and price

Upstream - E & P §  Manage exploration

acreage §  Manage PSC §  Manage sales of

Govt. oil & gas portion

§  Report to Minister on upstream activities

Johannes Widjanarko (act)

Ministry of Energy & Mineral Resources (ESDM)

Jero Wacik

Andy Noorsaman Sommeng Dahlan Iskan

Susilo Bambang Yudhoyono

Edy Hermantoro

Ditjen Electricity

Energy Commission (DPR RI Komisi VII) Party (Fraksi) 1. Fraksi Partai Demokrat 2. Fraksi Partai Golongan Karya 3. Fraksi Partai Demokrasi Indonesia Perjuangan (F-PDIP) 4. Fraksi Partai Keadilan Sejahtera 5. Fraksi Partai Amanat Nasional 6. Fraksi Partai Persatuan Pembangunan 7. Fraksi Partai Kebangkitan Bangsa 8. Fraksi Partai Gerakan Indonesia Raya (F-Gerindra) 9. Fraksi Partai Hati Nurani Rakyat (F-Hanura)

Marzuki Ali

Partners (Mitra Kerja) Departemen Energi dan Sumber Daya Mineral Menteri Negara Lingkungan Hidup Menteri Negara Riset dan Teknologi Badan Tenaga Nuklir (BAPETAN) Badan Koordinasi Survei dan Pemetaan Nasional (BAKOSURTANAL) Lembaga Penerbangan dan Antariksa Nasional (LAPAN) Badan Pengatur Kegiatan Hilir Migas (BPH Migas) SKK Migas Dewan Energi Nasional (DEN) PP IPTEK Lembaga EIKJMEN Badan Pengkajian dan Penerapan Teknologi (BPPT) Dewan Riset Nasional Lembaga Ilmu Pengetahuan Indonesia (LIPI) Badan Tenaga Nuklir (BATAN) Badan Pengawas Tenaga Nuklir (BAPETAN)

Chairman: President, Vice Chairman: Vice President Executive Chairman: Minister of EMR Members (15): 7 Ministers: Keuangan, Perencanaan Pembangunan Nasional/ Ketua Bappenas, Perhubungan, Pertanian, Perindustrian, Ristek, LH 8 Unsur Pemangku Kepentingan: Industri, Akademisi, Konsumen, Teknologi, LH

Ditjen New, Renewable Energy and Energy

Conservation Ditjen Mineral and Coal

Nur Pamudji Karen Agustiawan Hendi PS

National Energy Council (DEN)

Association

Ministry of Energy and Mineral Resources (ESDM) Republic of Indonesia

Source: ESDM

Fossil energy share and subsidy. Ironically as we import crude and refined product, in high crude price in 2008 the energy subsidy also hit the country all time record.

Jan-

98

May

-98

Sep

-98

Jan-

99

May

-99

Sep

-99

Jan-

00

May

-00

Sep

-00

Jan-

01

May

-01

Sep

-01

Jan-

02

May

-02

Sep

-02

Jan-

03

May

-03

Sep

-03

Jan-

04

May

-04

Sep

-04

Jan-

05

May

-05

Sep

-05

Jan-

06

May

-06

Sep

-06

Jan-

07

May

-07

Sep

-07

Jan-

08

May

-08

Sep

-08

Jan-

09

May

-09

Sep

-09

Jan-

10

May

-10

Oil and gas are getting more expensive and difficult to extract. Unconventional on CBM, Heavy Oil, Gas Shales and Gas Hydrates are progressing

Indonesia’s current reserve and production are concentrated in western part with the country's future is in the frontier area in the eastern part

Moving from the western to eastern part by expanding exploration activities in the eastern part of Indonesia Shifting from oil to gas, both in the upstream industry and its utilization: - Numerous Gas Development Projects - Stronger oil to gas substitution in many areas of utilizations, such as: electricity, industrial sector, and CNG - Turning gas allocation from export to domestic market, - Switching gas as the source of revenue to gas as the engine of economy.

Oil and gas production: historic and outlook. Gas is the trend with the increasing gas production outlook despite declining oil production trend

Source: SKKMigas

Outlook

0

500

1000

1500

2000

1966

19

67

1968

19

69

1970

19

71

1972

19

73

1974

19

75

1976

19

77

1978

19

79

1980

19

81

1982

19

83

1984

19

85

1986

19

87

1988

19

89

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

2014

20

15

2016

20

17

MB

OE

PD

Oil Gas PEAK 1977

Plateau stage

Decline 2-3%

*) Outlook per January 29th,2013

PEAK 1995

Indonesia’s fuel distribution is the most complex in the world. Pertamina as national energy company maintains the public service obligation (pso) providing fuel across the archipelago with the same consumer price

Source: Pertamina

MERAUKE

JAYAPURA

BITUNG

SABANG

KRUENG RAYA

LHOK SEUMAWE

UP. I - PKL. BRANDAN

LAB. DELI

UP. II - DUMAI

SIAK

MEULABOH

SIBOLGA

G. SITOLI

TT. TLK. KABUNG

BENGKULU

JAMBI

PANJANG

UP. III - PLAJU

P. NATUNA

P. BATAM

SEMARANG

SURABAYA

CAMPLONG

MENENG

TT. TLK MANGGIS

AMPENAN BIMA

BADUNG

REO

ENDE

WAINGAPU

MAUMERE

L. TUKA

KALABAHI

ATAPUPU

DILI

KUPANG

SAUMLAKI

DOBO TUAL

FAK - FAK

NABIRE

BIAK

SERUI

MANOKWARI

SORONG

BULA

MASOHI

NAMLEA

SANANA

PABUHA

UP. IV CILACAP

PONTIANAK

SINTANG

SAMPIT CILIK RIWUT

PKL.BUN P. PISANG

BANJARMASIN

BALIKPAPAN

SAMARINDA

TARAKAN

TOLI - TOLI

MOUTONG

DONGGALA

PARIGI

POSO

GORONTALO

KOLONDALE

PALOPO

TAHUNA

KOTA BARU

PARE - PARE

P. SAMBU

TT. TG. GEREM/MERAK

BONTANG

PLUMPANG UP.VI

BALONGAN

LUWUK

KENDARI

KOLEKA

RAHA

BAU -BAU

UJ. PANDANG

SUBUNG

TT. WAY AME

TOBELO

TERNATE

BANGGAI

KALBUT

IMPORT

T. SEMANGKA

KETERANGAN

: REFINERIES

: DISTRIBUTION PATTERN

: TERMINAL BACK LOADING

: DISCHARGE PORT IMPOR

: FUELS DEPOT

: TRANSIT TERMINAL

: FLOATING STORAGE

•  14 Transit Terminal & Instalasi

•  51 Terminal & Depo Utama •  85 Depo Darat & Laut

Lainnya •  5 STS & Jobber •  55 DPPU

Gas Utilization, Export Vs Domestic. Domestic being used and prioritized for oil and gas lifting, fertilizer, electricity and industry. In period of 2003-2012, the domestic use is increased 9% per yr CAGR.

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cumulative Volume (TCF) Gas Domestic Utilization

Fertilizer Electricity Industry

0

5

10

15

20

25

30

2005 2006 2007 2008 2009 2010 2011 2012

MTPA Indonesian LNG – Export Realization

Domestic USA China Taiwan South Korea Japan

Lifting, 4.7% Fertilizer,

8.1%

Electricity, 12.3%

Industry + CO2, 16.8%

Citygas, 0.003%

LNG Domestic,

0.4%

LNG Export, 40.0%

LPG, 3.7%

Gas Pipe Export, 13.9%

Gas in the form of LNG is a global traded commodity. Indonesia was #1, now is #3 biggest LNG exporting country after Qatar and Malaysia

Source: WoodMackenzie at World Gas Conference 2012

LNG exporting and importing countries and FSRU worldwide. FSRU West Java is #4 FSRU in operation, and it is the 1st in Asia Pacific. It starts operating in mid 2012

Source: Energy Nusantara LNG Workshop 2013, Marine Service GMBH

1st FSRU in Asia Pacific, Value Chain and Ship to Ship Operation

LNG Carrier FSRU

Source: Energy Nusantara, Nusantara Regas

LNG Infrastructure in Eastern Indonesia. Mini LNG is the most effective solution considering the geographic challenges and low demand

•  Unlike in Java and Sumatra, construction of extensive gas transmission pipelines in eastern Indonesia is not feasible as the relatively low gas demand does not justify the high CAPEX

•  Gas pipeline networks are not well established in eastern Indonesia, LNG is the most strategic solution to balance the supply-demand gap in respect to geographical condition and distance between gas supply to demand points in Indonesia

•  Due to marginal demand in the range 3 to 30 MMSCFD in the eastern part of Indonesia, small scale LNG plant is the most suited and efficient way for gas distribution

There will be 8 mini LNG plants with each varies from 3-30 mmscfd capacity

                 Ferro  and  Associates    :    Fe,  Nickel,  Cobalt,  Chromit  ,  Mangan,  Molibdenum,            Titanium                                      

                 Precious  Metal                    :    Gold,  Silver,  PlaFnum                  Base  Metal                                  :    Zinc,  Cupper,  Tin,  Lead,  Mercury                                                              Light  and  Rare  metal    :    Bauxite,  Monasit

NO Commodity Resource

(Million    TON  ORE)

Reserve (Million  TON  ORE)

1 Copper                  4.925                4.161 2 Bauxite                        551                    180   3 Nickel                  2.633                    577   4 Pasir  Besi                  1.649                            5   5 LateriFc  Iron                1.462                    106 6 Primary  Iron                        563                        30   7 Sediment  Iron                            18  -­‐  

8 Mangan                            11                            4 9 Alluvial  Gold                  1.455                        17   10 Primary  Gold                  5.386              4.231 11 Silver                  3.406              4.104   12 Zinc                        577                            7   13 White  Lead                        354      0,7  

14 Lead                        363                        1,6

Source: Badan Geologi, 2010

Mineral resources and reserve map. Law no. 4/ 2009 stipulates on mineral and coal mininng

To increase added value, investors are expected to process any metal minerals into metal products in Indonesia, by establishing owned smelters or using others’. In five years since 2009, it is prohibited for companies or investors to export raw materials of mining commodities.

           Very  High  (  >  7100  kal/gr  )

                 

 Low  (  <  5100  kal/gr  )

Total  Resource 161.34  Billion  Ton*

Total  Reserve 28.17  Billion  Ton

*)    41  Billion  Ton  

   High  (  6100  -­‐  7100  kal/gr  )  Medium  (  5100  -­‐  6100  kal/gr  )

Coal resources and reserve map. Indonesia is the largest coal exporting country

Source: Badan Geologi, 2010

Source: Pertamina

Geothermal potential, Indonesia is currently 3rd biggest installed capacity after US and the Philippines (1/2)

Lahendong Operator : Pertamina Capacity : 20 MW

Dieng Operator : GeoDipa Capacity : 60 MW

Kamojang Operator : Pertamina Capacity : 140 MW

Gunung Salak Operator : Chevron Capacity : 375 MW

Wayang Windu Operator : Star Energy Capacity : 110 MW

Sibayak Operator : Pertamina Capacity : 2 MW

13,800 MW

9,250 MW

1,900 MW

2,000 MW

50 MW

Darajat Operator : Chevron Capacity :255 MW Exploration/ Development

Open Area

Geothermal potential, Indonsia is currently 3rd biggest installed capacity after US and the Philippines (2/2)

Source: Energy Nusantara, ESDM

Indonesia is relatively well exposed compared to other countries, with solar irradiation levels highest in Jawa, Sulawesi and Nusa Tenggara

1

Solar Module Solar System Electricity Solar Cell Wafer Polysilicon

Solar PV, the right time for project developer. Government also recently issued ministerial decree on this (1/5)

Project scope is to build 60 Megawatt peak solar cell plant & 30 Megawatt peak solar module plant Project scheme : JV with State Owned Enterprise

Target for commercialization in early 2015

Estimated solar irradiation map of Indonesia kWh/sqm/day Solar insolation map Peak sun hours January

July 4.75 – 4.90 4.90 – 5.25 5.25 – 7.50

POTENSI PASIR KUARSA

PROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARATPROPINSI. NUSATENGGARA BARAT

PROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALOPROPINSI. GORONTALO

PROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTAPROPINSI DAERAH ISTIMEWA YOGYAKARTA

PROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTENPROPINSI. BANTEN

PROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARAPROPINSI. MALUKU UTARA

PROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKUPROPINSI. MALUKU

PROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATANPROPINSI. KALIMANTAN SELATAN

PROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARATPROPINSI. KALIMANTAN BARAT

PROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAHPROPINSI IRIAN JAYA TENGAH

PROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALIPROPINSI. BALI

PROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAHPROPINSI. SULAWESI TENGAH

PROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARAPROPINSI. SUMATERA UTARA

PROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNGPROPINSI BANGKA BELITUNG

PROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARATPROPINSI. SUMATERA BARAT

PROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAHPROPINSI. KALIMANTAN TENGAH

PROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNGPROPINSI. LAMPUNG

PROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULUPROPINSI. BENGKULU PROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARAPROPINSI. SULAWESI TENGGARA

PROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARATPROPINSI SULAWESI BARAT

PROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAUPROPINSI. RIAU

PROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAUPROPINSI. KEPULAUAN RIAU

PROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMURPROPINSI KALIMANTAN TIMUR

PROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMURPROPINSII PAPUA TIMUR

PROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARATPROPINSI IRIAN JAYA BARAT

PROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAMPROPINSI. NANGGROU ACEH DARUSSALAM

PROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBIPROPINSI. JAMBI

PROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAHPROPINSI JAWA TENGAH

Indonesia has the potential for very large quartz sand (17,491 billion tons) that can be used as a main ingredient a silicon-based solar energy industry

Source: Pertamina

Solar PV Project Development Timeline and Business Scheme (2/5)

Source: Energy Nusantara

Solar PV Project Development Timeline and Business Scheme (3/5)

Source: Energy Nusantara

Solar Feed-in-Tariff at MEMR Decree 17/ 2013 (4/5)

Source: Fuadi Nasution – Energy Nusantara Industry Expert

Implication of MEMR Decree 17/ 2013 on Solar PV (5/5)

Source: Fuadi Nasution – Energy Nusantara Industry Expert

Chemicals

Hydro is high CAPEX but low opex

Source: Sampoerna ITB Energy Management 2007 Class Lecture Material

Favorable Wind Resource Area at East Nusa Tenggara

Wind Map West Timor and Sumba Islands

Current status : mapping the potential of wind energy

Wind energy highest potential in Indonesia is located in Nusa Tenggara Timur

Source: NREL

Wind  and  Solar  PV  Hybrid    ImplementaSon

Nuclear - Uranium, no progress as no political will and lack of public acceptance

Source: SBM ITB

Source Reduction & Reuse

Recycling / Composting Energy Recovery Treatment &

Disposal

Capacity 10MW Produce: 500kg/ day

From 6000T waste/ day, only2000T can be managed by GTJ

Potential to be developed Current System

Proposed technology systems Integrated Plasma Gasification Combined Cycle (IPGCC) Scope converts waste products into potential 120 MW electricity with bioavtur

Scheme JV with municipal waste management contractor in Jakarta and technology provider Commercialization target 2015

Waste to Energy

Source: Pertamina

2015

951

2014

544

2013

197 61

2011

20

on grid (MW)

Capacity Development of WTE in Indonesia

2012

Electricity Investment Scheme

PT PLN (Persero)

Government

Banking: International

and National

Electricity Consumer

Contractor (EPC)

Private Investor

(IPP)

Mechanism Auction

Legal Basis Presidential decree no. 80/ 2003 concerning guidance for government procurement of goods/ services jo presidential regulation no. 95/ 2007

Mechanism Auction, Direct Appointment, Direct Selection

Legal Basis PP No. 10/1989 jo PP No. 3/ 2005, PP No. 26/ 2006

Direct Appointment

a.  The sale of electric power from power generator using renewable, marginal gas, mine mouth coal and other local energy

b.  The purchase of excess electric power c.  Local electric power system in critical

condition of electric power supplly d.  Capacity extensions of electric power

generator in power generators which has been operating at the same location with cooperative state owned enterprise, private, NGO, individual acting as holder of IUKU

Direct Selection

a.  Developer apply for direct appointment in the system of PKUK or IUKU Holder more than one

b.  Capacity volume over by developer exceeds the additional needs of system capacity of PKUK or Holder of local IUKU

APBN

Auction

Revenue

Loan

Sale of electric power

2008 2009 2010 2011 2012 RAPBN-P 2013

RAPBN 2014

HSD 36% 25% 22% 22,95% 14,97% 10,87% 9,70% Gas 17% 25% 25% 21,00% 23,41% 22,45% 22,02% Coal 35% 39% 38% 44,06% 50,27% 55,15% 57,24% Hydro 9% 8% 12% 6,80% 6,39% 6,40% 6,09% Geothermal 3% 3% 3% 5,13% 4,85% 4,60% 4,43% Bio Diesel & Other RE 0% 0% 0% 0,07% 0,11% 0,52% 0,52%

Source: Energy Nusantara, MEMR 2013

% fr

om to

tal

prod

uctio

n (G

Wh)

Power Plant 2008 – 2014, coal is the biggest contribution

NAD 91,06%

Sumut 88,69%

Sumbar 78,72%

Riau   86,10%

Sumsel 74,50%

Bengkulu 79,88%

Babel 94,77%

Lampung 77,39%

Jakarta 99,99%

Banten 80,20%

Jabar 77,36%

Jateng 83,98%

Jambi 75,30%

DIY 81,43%

JaSm 77,15%

Bali 77,35%

NTB 62,86%

NTT 60,78%

Kalbar 76,37%

Kalsel 77,71%

KalSm 73,69%

Sulut 77,90%

Sulteng 70,40%

Sulsel 78,77%

Malut 79,74%

Maluku 75,92%

Papua 50,20%

Category  : >  60  %

41  -­‐  60  % 20  -­‐  40  %

Sulbar 75,01%

Kepri 84,50%

Sultra 66,93%

Papua  Barat 71,49%

Kalteng 80,41%

Gorontalo 66,03%

2006 2007 2008 2009 2010 2011 2012 2013 2014Rasio Elektrif ikasi

63% 64,3% 65,1% 65,8% 67,2% 72,95% 76,56% 79,3% 81,4%

RENCANAREALISASI (Tahun)

NTB 53,63%

NTT 53,42%

Papua 34,62%

Source: Energy Nusantara, PLN 2013

Electricity ratio target in 2013, with NTB, NTT and Papua are the lowest indicated with yellow and red colored box

2012

2012 2012

FSRU Visit Video: Stakeholders witnessed the operational of this facility (4th in the world) in Youtube: http://www.youtube.com/watch?v=VjGeAFY-8Fk [copyright of Energy Nusantara 2013]. Due to PDF file conversion, you can look for Energy Nusantara FSRU in the Youtube in order to view this 8 minutes FSRU visit video

FSRU West Java Nusantara Regas Pertamina (60%) and

PGN (40%) Start Operation in Mid 2012 Gov Budget Saving USD 700 Mil/yr

Indonesia plays strategic role in global context, as G-20 and high GDP growth country. It also posses abundant energy resources but in order to expedite resource monetization and meet the energy mix target in 2025 In Indonesia, there are quite a number of stakeholders overseeing energy sector. Need to minimize the overlapping roles by strengthening the existing one. Renewable energy implementation is still low due to lack of strong leadership, high interest in fossil energy and the energy pricing policy is not yet supporting B to B. In fossil energy, gas is the trend with the recent discovery and increasing production but infrastructure especially offshore marine is required to support this growing industry

Remarks

INDONESIA I

Thank You

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