The views expressed in this presentation are the views of the author and do not necessarily reflect the

views
or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its
Ministry of Energy and Mineral Resources, Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data
Republic of Indonesia included in this paper and accepts no responsibility for any consequences of their use. Terminology used
may not necessarily be consistent with ADB official terms.

Indonesian Energy Outlook and Priorities

in Achieving Equitable Energy and the Paris Agreement

Tokyo, 6-8 March, 2018

1
Indonesia Economic Outlook
Better than Global Trend DRIVING FACTORS
2016, Indonesia's economic growth has found a
factors driving growth
momentum of recovery, when the global trend is
Forecasts of Economic Growth still slowing

2017, the consistent structural reforms carried

out by the government has shown material
results reflected in 2017, with 5%-5.1%
economic growth

Outlook, economic growth will continue the

upward trend among others supported by a
Indonesia Global Developed Country Developing Country healthy domestic sector and government
support on activities that show productivity (e.g.
infrastructure)
Beside economic outlook, The GOI also got stable currency, low inflation rate
(3.61% yoy), improve external balance demonstrated by trade surplus
amounted to USD 11.8 billion, managable state budget deficit at 2.42% of Global economic risk
GDP, as well as gradually decreasing interest rate. remains to be wary so that the external sector is
Source : conducive and confidence is maintained
• WEO Oct 2017 & Ministry of Finance of The Republic of Indonesia
• Statistics Indonesia

2
Acknowledgments of Indonesian Reform
Improvement of creditworthiness, ease of doing business, trust to the government

Ease of Doing Business 2018 Investment Grade

In terms of sovereign credit ratings,
Moody’s S&P Fitch
Standard and Poor’s also upgraded
Up Indonesia position up from #91 to #72, and
Baa1 BBB+ BBB+ Indonesia’s rating from BB+ to BBB-;
became one of the Top Improvers. as such, the three world’s biggest
19 Currently Indonesia position higher than Baa2 BBB BBB rating agencies have lifted Indonesia’s
India, Brazil, and Phillipines status to Investment grade. Fitch
Ranks Baa3 BBB- BBB- ratings even increased Indonesia’s
rating one notch higher from BBB- to
Source : World Bank Source : Moody’s, S&P, Fitch BBB with a stable outlook.

Galup World Poll Global Competitiveness Index 2017-2018

Indonesia along with Switzerland have Indonesia Position #36.

Up
#1
gained The highest Public Trust level to The 9 of 12 pillars has improved for example:
Government 5 Institution, infrastructure, macroeconomic,
health and primary education, technological
Ranks readiness, business sophistication
Source : World Economic Forum

3
“Several Areas Still Shortage of 95.35%
Electrification Ratio(%)

Electricity Infrastructure”
Electrification ratio 2017

KALTIM
ACEH 99,99
97,68 JAMBI GORONTALO
KALTARA
SUMUT 93,68 84,78 86,56
99,90 Realization Target

KEPRI SULUT MALUT

KALBAR
RIAU 76,97 94,56 96,09
95,25 89,93 SULTENG
79,31
PABAR
95,70
PAPUA
BABEL
61,42
99,99
SULBAR
95,28

SUMBAR DKIJAKARTA
89,15 99,99
JATENG
96,30
KALTENG
KALSEL MALUKU
80,82 92,12 87,39
BENGKULU
96,49 SULSEL
SULTRA
99,12
81,54
INFORMASI
INFORMATION SUMSEL
> 70 88,38

50 -70 JABAR
JATIM
LAMPUNG
99,99 DIY
92,03 NTT
<50
91,96 NTB
99,99
BALI 84,11 59,85 Installed Capacity (MW)
BANTEN 97,12 2013 2014 2015 2016 2017
99,99

4
 #EquitableEnergy
Emphasize Social Wellfare, Condusive Bussiness Climate dan Economic Growth

Electrification Sustainability Investment & Bureaucracy

Fair Distribution
Ratio & Affordability Growth Reform
 Increasing Power  Targeted Subsidies  Renewable Energy  Mineral Added Value  Simplification of
Generation Capacity  Single Retail Fuel Utilization  PI 10% from oil & gas Permits
(35,000 MW) Price contract
 PPA Reform  Online System
 Rural Electrification  City Gas  Private Refinery
 Mine Mouth Power  Good Governance
 Electrifying 2,500  LPG’s Converter Kit Plant  Industrial Gas Price
Villages for fishery  PSC Gross Split  Beneficial Ownership
 1 Gas Refueling  Wellhead Power Plant
 Electricity Tariff of  Sunk Cost Refund -
Station Nozzle at PSC
NRE Each gas station

Sovereignty and Energy Resilient

5
 Simplification of Permits
Permits handled directly by Ministry of Energy and Mineral Resources
NEW RENEWABLE ENERGY
OIL & GAS MINERAL & COAL ELECTRICITY & ENERGY CONSERVATION
MR 29/2017 MR 34/2017 MR 12/2016 MR 12/2016

6 Permits 6 Permits 3 Certifications 3 Permits

Exploration Mining Permits
Exploration Special Mining Permits
 2 Permits Upstream Production Mining Permits 2 Recommendations 7 Non Permits
 4 Permits Downstream Production Special Mining Permits
Operation & Production Mining
Permits Specifically for Processing
& Refining
+ 4 Non Permits Business Permits for Mining
Services

Before Simplification: Before Simplification: Before Simplification: Before Simplification:

104 Permits 117 Permits 6 Permits 6 Permits

6
 Oil and Gas Blocks Tender in 2017

5 Oil and Gas Blocks

with Gross Split scheme
enthused by Investors
18 Conventional O&G Blocks Tender

14
13
10
8 8
5 5

0 0
In 2018 government will offering at
lease 41 Conventional Blocks and 3 2013 2014 2015 2016 2017

Unconventional Blocks Ditawarkan

Offered Laku
Signed

7
Investment for Refinery Development Open for Private Investor
Private
Refinery Permit BundlingEnterprises
with Retail (eligible to sell to end user)

8
8
Mineral Mining and Processing Opportunities
Mining Permits Re-Evaluation | Clean and Clear / TOTAL Mining Permit (known as IUPs)
10,643 10,339
9,370 IUP CnC
9,074

Total IUP
6,370 6,202 6,565
6,000

2014 2015 2016 2017

Since 2018 as many as 6,565 mining permits

have had legal status (almost 3,000 un-proper
mining permits freezed)
Government preparing mining working
concession bidding Opportunities:
1. Offering New Mineral Working Acreage
2. Mineral processing

9
 National Commitment in Global Climate Change
The GOI also committed to participate on global sustainable action as pledged by President Joko Widodo, at the
21st COP 2015 in Paris, known as Paris Agreement that is committed to reduce greenhouse gas emission in 2030
to 29% on its own efforts. With International support, the reduction of greenhouse gas emission is targeted up
to 41%.

President of The Republic of Indonesia:

“Emition mitigation in energy sector conducted in several
ways:
o Switch fuel subsidy into productive sector;
o Enhancement of renewable energy use about 23% of
total national energy consumption by 2025;
o Waste to energy management.

10
Utilization of Renewable Energy for Affordable Electricity Price and Environmental
Ministerial Regulation No. 50/2017
Implementation of Power Purchase * Types of Power Plan
General auction in accordance to the * Geothermal dan Municipal
RKAB: Rencana Kerja dan
provisions of the legislation Waste
Anggaran Power
Plan
Biaya Perusahaan  Solar  Biogas
 Wind  Municipal Waste
Hydro, Solar PV, Wind, Biomass,  Hydro  Geothermal
Through direct selection mechanism  Biomass  Ocean Currents
Ocean Currents, and Biogas Power
Plant

Power Purchase Price

▪Solar Indexing to generation cost in local system If the power generation cost in the local electricity
▪Wind
▪Biomass National average power generation cost
▪Municipal
Waste
system
> national average power generation cost
▪Biogas ▪Geothermal Maximum purchase price is 100%
Maximum purchase price is 85% of local power of local power generation cost
▪Ocean ▪Hydro
Current generation cost
National average power generation cost Based on agreement, if power generation cost in
Power Generation Cost based on the agreement Sumatera, Java, Bali or local electricity
(BtoB) system ≤ National Average power generation cost

11
 26.9 33.4
PLTSa 33.4
33.4
PLTBg
Attractiveness of Indonesian Renewable Energy Projects
23.9
22.9 26.9
33.4 26.9 PLTSa
19.2
PLTBm 26.9 23.9 PLTSa
18.9 PLTSa 22.9
17.9
17.9 26.9 23.9
23.9 PLTP
23.9 PLTBg PLTBg
22.9 23.9 26.9
22.9
26.9 PLTBg 22.9
PLTSa
22.9 18.9
18.9 19.2
PLTMH PLTBm PLTBm18.9
18.9 19.2
23.9 18.9 17.6 17.9
PLTBm
19.2 PLTBg 17.6 17.9 3
19.2
17.6 17.9 17.6
22.9
17.6 17.9 PLTA PLTP
2017 PLTP
PLTP PLTBm
18.9 19.2
13.1
13.1
PLTMH PLTP
PLTB 13.1
PLTMH68 PPA Signed ~
PLTMH
10.9 10.9
10.9 26.9
10.9
PLTA
PLTS PLTA 1,207 MWPLTA
PLTMH
PLTB
PLTSa Total
PLTB
23.9
22.9
PLTB
4.9 PLTA 4.9
Aceh Sulutenggo NTT Sumut Kaltim PLTS Papua
Kalbar 17.6 PLTB
17.9 PLTP 18.9 19.2
PLTS
33.4
33.4
PLTS
Total 33.4 RE Potential
Total
10.39 PLTS Total
13.1 Total Giga Watt (GW)
33.4
o 8.83
NTT
Maluku Sumut
NTB Kaltim
Riau Kalbar
Aceh Papua
10.9
Sulutenggo NTT Total
Sumut Kaltim 26.9
Kalbar Papua PLTSa
Babel MalukuNTT NTB Sumut
Riau Aceh Babel Papua
Sulutenggo Maluku Sumut
NTT NTB Riau
Kaltim Aceh
Kalbar Suluten
Papua
Riau Aceh
9.28
Sulutenggo
10.14
Kaltim Kalbar
22.9
23.9 26.9 PLTSa
PLTBg
MSW
26.9
lutenggo NTT Sumut Kaltim Kalbar 10.2
Papua 12.74 17.32
7.89 8,62 4.9 23.9 23.9 PLTBg
PLTBm
Biogas 23.9
4.9
17.6 12.43
17.9
18.9 19.2
8.67 10.83 22.9 14.72 22.9 22.9
PLTP
PLTBm
Biomass
BPP local=local price 1.3610.57 18.9 19.2
18.9 19.2
19.2 18.9 19.2
cent$/kWh 13.1 17.6
17.6 0.0817.9
0.08
17.6 17.9 17.9 17.6 17.9 PLTMH
PLTP
Geothermal
10.9
13.1 PLTA
100% BPP local Babel 13.1
Maluku
13.1
13.1 NTB 13.1
Riau Aceh Sulutenggo NTT Sumut PLTMH
Micro hydro
Kaltim Kalbar Pa
10.914.33Sulselrabar
10.9
10.9 10.9
Kalselteng PLTB
85% 4.9
BPP local PLTA
Hydro
12.18 9.04 PLTS
PLTB
PLTB
Wind

“
4.9
4.9 4.9 7.68 Total
4.9
There Maluku
are 209 GW RE Riau
potential “ PLTS
Solar
Babel NTB Aceh Sulutenggo NTT Sumut Kaltim Kalbar Papua
spreadBabel
out in 12 regionsNTB Total
Total
Maluku Riau Aceh Sulutenggo NTT Sumut 13.54Kaltim Kalbar Papua
(local BPP > average
Babel
Babel
BPP)
Maluku
Maluku
Babel
NTB
NTB
Maluku
Riau
Riau Aceh
Aceh
NTB
Sulutenggo
Riau
NTT Sumut
Aceh
17.52Kaltim
Sulutenggo
Kalbar11.51
NTT
Papua
Sumut Kaltim
13.68
11.63 14.89
12
70 Contracts
70 of
PPA New Renewable
Energi Baru Energy
Terbarukan 2017
Signed in 2017 Biogas
Never Happened
in previous years
Biomass

Solar
CONTRACTS Contracts Contracts is
has under
COD Construction
Geothermal

Hydro Status 19 February 2018

Minihydro

70 Contracts of New Renewable Energy Power Generator New Renewable Energy Power
Generation Progress (2014-2017) Contract
Signed in 2017

Contract
Contract Contract

13
Deployment of
Advance Renewable Technology

PLT Bayu (Wind Power) Sidrap Located in Sidereng Rappang Regency Next Progresive Renewable Energy
South Sulawesi Projects
(30x2,5 MW) Expected COD in First Quarter 2018
COD Target
First quarter 2018
PLTB Jeneponto
PPA Price : Capacity 60 MW
US$ 11.41 cent/kWh PLTB Sidrap II
Investment Capacity 50 MW
US$ 150 Million PLTB Tanah Laut
Avarage Wind Speed Capacity 70 MW
(85 m) 7+ m/s (25+ KPH)

PLTS Floating
Cirata
Capacity 200 MW

14
 Ministerial
Regulation No
38 Year 2016
ACCELERATION OF INDONESIAN RURAL ELECTRIFICATION
Electrification program up to Renewable Energy Usage
50 MW capacity are given to :
Underdeveloped rural areas
Rural Electrification Acceleration Program
Isolated rural areas
utilizes renewable energy (RE) as a
International border areas
Small populated islands
a source of electricity.

Determining The Business Areas :

Minister’s authority to determine which
business area to develop based on each
Governor’s proposal
Minister of Energy assigns companies that
already have Power Supply Business License
(IUPTL)
Governor proposes business area
Governor offers business area to companies
Governors issues Power Supply
Business License (IUPTL)
Procurement Mechanism
Investment
Based on governor’s proposal then
auctioned to corporations that
manage the business area
Assignment
Regional governments can assign
regional owned enterprise (BUMD) if
there are no interested investor
Tariff Mechanism
Subsidy
The government calculates the required
subsidy to be proposed to the
parliament (DPR)
Nonsubsidised with agreed tariff
Tariff is set by the Minister or Governor
based on their respective authority
Nonsubsidised with national’s tariff
PLN based tariff, regional government
can’t set the tariff

15
16