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Overlooked Challenges in Indonesian Geothermal Development. PT Supreme Energy June 5, 2014 IIGCE 2014 Jakarta Convention Center. The concessions are along the Great Sumatra Fault (GSF). PT Supreme Energy Muara Laboh PPA signing March 2, 2012.

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Presentation Transcript
slide1

Overlooked Challenges in Indonesian

Geothermal Development

PT Supreme Energy

June 5, 2014

IIGCE 2014

Jakarta Convention Center

slide2

The concessions are along

the Great Sumatra Fault (GSF)

slide3

PT Supreme Energy Muara Laboh

PPA signing March 2, 2012

  • PPA for Muara Laboh and Rajabasa were signed on March 2, 2012 with electricity tariff of :
  • Muara Laboh : US$ 0.094 per kWh
  • Rajabasa : US$ 0.095 per kWh
slide10

The concessions are along

the Great Sumatra Fault (GSF)

slide11

PT Supreme Energy Rantau Dedap

PPA signing November 12, 2012

PPA for Rantau Dedap was signed on November 12, 2012 with electricity tarif of US$ 0.0886 per kWh

slide17

Spud date for first well drilling

commenced on February 3, 2014

slide19

The concessions are along

the Great Sumatra Fault (GSF)

overlooked challenges in developing geothermal power plants in indonesia
Overlooked challenges in developing Geothermal Power plants in Indonesia

Standard challenges

  • Electricity tariff – New tariff
  • Government guarantee (BVGL) – MOF Template developed
  • Forestry permit – New Geothermal Law
  • Land Acquisition -
  • Community issues -

Overlooked challenges

  • Project Management capability for infrastructure development
  • Other Permits and Licenses
  • Subsurface engineering capabilities
  • Sufficient capital for exploration (Equity)

Develop harmonious relation with all local stakeholders (formal & informal leaders, Directly Affected Villagers) and work closely with security apparatus to utilize “soft power”

20

finding hot temperature system is related to well pad location
Finding hot temperature system is related to well pad location

Fumaroles

H2O,CO2,H2S

+2

In many cases, higher elevation has better chance compared to low elevation

Acid – SO4, Pools

Typical High Grade

Na–HCO3– SO4,

Springs

Steaming Ground

+1

Typical Marginal

NaCl Springs

condensation

Cap Rock

vapor zone

SL

200 oC

250 oC

km

dilution

-1

Lateral outflow of NaCl brine

300 oC

meteoric recharge

-2

upflow

+

+ +

+ +

+ + +

+ + + + +

+ + + + +

+ + + + +

+ + + + + +

+ + + + + + +

-3

-4

Magma Source

H2O,CO2,SO2, HCl

Volcanic Arc Geothermal System

crossing ravines and valleys in remote jungles needs special engineering and construction feat
Crossing ravines and valleys in remote jungles needs special engineering and construction feat

Typical Mechanically Stabilized Earth (MSE) wall to cross deep ravines

near geothermal system there are possibilities of soft soil condition geothermally altered clay
Near Geothermal system, there are possibilities of soft soil condition (Geothermally altered clay)

Various technology to improve soil condition needs to be implemented such as the use of Geogrid, Geotextile, Lime stabilizer, Clean set cements

building infrastructure for exploration program needs experienced project management capabilities
Building infrastructure for exploration program needs experienced project management capabilities
overlooked challenges in developing geothermal power plants in indonesia1
Overlooked challenges in developing Geothermal Power plants in Indonesia

Standard challenges

  • Electricity tariff – New tariff
  • Government guarantee (BVGL) – MOF Template developed
  • Forestry permit – New Geothermal Law
  • Land Acquisition -
  • Community issues -

Overlooked challenges

  • Project Management capability for infrastructure development
  • Other Permits and Licenses
  • Subsurface engineering capabilities
  • Sufficient capital for exploration (Equity)

Develop harmonious relation with all local stakeholders (formal & informal leaders, Directly Affected Villagers) and work closely with security apparatus to utilize “soft power”

26

number of permits and licenses for a geothermal investment
Number of Permits and Licenses for a Geothermal investment
  • General corporate : 14
  • Operational : 15
  • Land related : 3
  • Environmental related : 6
  • Manpower related : 6
  • Safety related : 12

Total : 56

current environmental regulation implements similar treatment as oil gas drilling cuttings
Current environmental regulation implements similar treatment as Oil & Gas drilling cuttings

Burn

Need coordination help between between Ministry of Energy and Mineral resources (Director General of EBTKE) with Ministry of Environment to differentiate between Oil & Gas drilling cuttings and Geothermal drilling cuttings

the needs of ebtke certification for all earth moving equipment
The needs of EBTKE certification for ALL earth moving equipment

To develop exploration drilling infrastructure needs about 50 to 70 Earth moving equipment. Each equipment currently has to be certified by Director General of EBTKE. Crane, Drilling rig and equipment certification are accepted but earth moving equipment needs reconsideration on the necessity of certification

overlooked challenges in developing geothermal power plants in indonesia2
Overlooked challenges in developing Geothermal Power plants in Indonesia

Standard challenges

  • Electricity tariff – New tariff
  • Government guarantee (BVGL) – MOF Template developed
  • Forestry permit – New Geothermal Law
  • Land Acquisition -
  • Community issues -

Overlooked challenges

  • Project Management capability for infrastructure development
  • Other Permits and Licenses
  • Subsurface engineering capabilities
  • Sufficient capital for exploration (Equity)

Develop harmonious relation with all local stakeholders (formal & informal leaders, Directly Affected Villagers) and work closely with security apparatus to utilize “soft power”

30

requirement for subsurface and drilling engineers in a geothermal development
Requirement for Subsurface and drilling engineers in a Geothermal development

Requirement for 1(one) exploration area for 24-hour continous drilling campaign :

  • Geologist, Geochemist, Geophysicist – 3 to 5 engineers
  • Numerical Modeler – 1 to 2 modeler
  • Well testing engineers – 2 to 3 engineers
  • Drilling managers & engineers – 3 to 5 engineers

Experienced engineers salary :

  • Subsurface engineers – US $ 5.000 to US $ 15.000 per month with transfer fee amounting to US $ 100.000
  • Drilling engineers – US $ 20.000 to US $ 25.000 per month

Limited engineers resulting in hijacking of employees

cooperation between government industry and university
Cooperation between Government, Industry, and University
  • Develop of a geothermal education capacity expansion roadmap
  • Provide grants for Masters and PhD Students
  • Conduct field trips
  • Offer “Distance Learning Courses”
  • Conduct monthly seminars on Geothermal energy
  • Develop short courses and workshops
  • Establish a technical program exchange 
proposed future cooperation program
Proposed future cooperation program
  • Generic engineers accelerated program (max 1 year)

- for 1 to 5 years experienced engineers

- Geologist, Numerical modeler, Well testing engineers,

Drilling engineers

  • Specialist engineers accelerated program (max 2 years)

- for 5 to 10 years experienced engineers

- Geophysicist, Geologist, Geochemist, Numerical modeler

overlooked challenges in developing geothermal power plants in indonesia3
Overlooked challenges in developing Geothermal Power plants in Indonesia

Standard challenges

  • Electricity tariff – New tariff
  • Government guarantee (BVGL) – MOF Template developed
  • Forestry permit – New Geothermal Law
  • Land Acquisition -
  • Community issues -

Overlooked challenges

  • Project Management capability for infrastructure development
  • Other Permits and Licenses
  • Subsurface engineering capabilities
  • Sufficient capital for exploration (Equity)

Develop harmonious relation with all local stakeholders (formal & informal leaders, Directly Affected Villagers) and work closely with security apparatus to utilize “soft power”

34

histogram of capacities of worldwide productive wells from 869 wells geothermex data
Histogram of capacities of worldwide productive wells from 869 wells – GeothermEx data

Better economics

required equity for geothermal exploration is about us 1 million per mw target
Required equity for Geothermal explorationis about US $ 1 million per MW target
  • For 60 MW Power plant Project financing :
  • Lender would need at least 50 % steam at well head
  • 30 MW steam means about 6(six) wells each at 5 MW
  • Exploration drilling for 6 wells x US $ 7 million $ 42 million
  • Civil infrastructure cost $ 20 million
  • Drilling casings, Master valves, Pump and Pipings $ 5 million
  • Required equity at least US $ 70 million
summary of challenges recent solutions and also proposed solutions
Summary of challengesRecent solutions and also Proposed solutions

Standard challenges

  • Electricity tariff – New tariff
  • Government guarantee (BVGL) – MOF Template developed
  • Forestry permit – New Geothermal Law
  • Land Acquisition -
  • Community issues -

Overlooked challenges

  • Project Management capability for infrastructure development – Prepare and recruit experienced Project management team
  • Other Permits and Licenses – Simplify un-necessary permits
  • Subsurface engineering capabilities – Accelerated education
  • Sufficient capital for exploration (Equity) – CTF fund

Develop harmonious relation with all local stakeholders (formal & informal leaders, Directly Affected Villagers) and work closely with security apparatus to utilize “soft power”

39

slide41

Thank you

for your attention