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Investment in Indonesia: What are         the upcoming opportunities ?                   Investment Opportunities in:     ...
Primary Objectives for Utilities by 2020 1. Increase Power Reliability          2.   Improve Energy Efficiency by minimizi...
Fuel Balance – Today and in 2020                                                 Solar, Other                             ...
Outlook for the Energy & Power IndustryTop 10 World Power & Energy Trends over the Next Decade   Major                    ...
Outlook for the Energy & Power IndustryTop 10 World Energy & Water Trends over the Next Decade   Major                    ...
Asia-Pacific is likely to witness the largest increase in theElectricity consumption owing to the economic development inc...
Oil & Gas Sector: Market Trends Dynamics of Oil Pricing                                                                  O...
Oil & Gas Sector: Market TrendsMajor Emerging Trends Key Trend 1: Strong Demand Driving Prices Up                         ...
Oil & Gas Sector: Market TrendsMajor Emerging Trends Key Trend 2: The development of marginal fields                      ...
Outlook for the Energy & Power IndustryGrowth of Unconventional GasOutlook for the Energy & Power Industry: Unconventional...
Table of Contents – Conventional Energy             1   Indonesia in the Global Context – Conventional EnergyContents     ...
Key Opportunities in Indonesia                             Commercial                   High Opportunity     Sector       ...
Opportunity Assessment – Energy Sector                                      Commercial                           High Oppo...
Key Drivers and Restraints                    High           High power demand                                          an...
Oil Energy Sector                                                                    1-2 Years   3-6 Years          7-10 Y...
Gas Energy Sector                                                                    1-2 Years   3-6 Years          7-10 Y...
Coal Energy Sector                                                                     1-2 Years   3-6 Years       7-10 Ye...
Table of Contents – Conventional Energy            1   Indonesia in the Global Context – Conventional EnergyContents      ...
Oil & Gas Sector – Opportunities across the valuechain                                    Upstream                        ...
Oil & Gas Sector: Unconventional Gas is set to emergeas a viable option            Coal Seam Gas          (CSG)/CBM to LNG...
Oil & Gas Sector: Exploration and Production       Continue to remain a massive investment area                           ...
Oil & Gas Sector: Offshore opportunitiesProspective FPSO Projects        Deepwater Potential: Tarakan basin; Papalan Basin...
Oil & Gas Sector : Floating Storage Re-gas Storage Units(FSRU) ProjectsLocation    : Belawan, North Sumatra    Location   ...
Coal Production and Consumption                Increasing prices and unreliability over global coal supply, and rapid indu...
Summary      New investments is the key to sustain Indonesia energy security.  1   Decreasing production of energy is happ...
Table of Contents – New and Renewable Energy           1       Indonesia in the Global Context – New and renewable energyC...
Indonesia Power Sector – An Overview                                                                    Installed Capacity...
Renewable Energy Potential in Indonesia Renewable Energy Type   Potential Resources          Installed Capacity          U...
Key Opportunities in Indonesia                                 Commercial                           High Opportunity      ...
Opportunity Assessment – Key Products                                                                                High ...
Geothermal Energy Sector                                                                           1-2 Years   3-6 Years  ...
Bioenergy Sector                                                                       1-2 Years   3-6 Years          7-10...
Hydropower Sector                                                                        1-2 Years   3-6 Years          7-...
CBM Sector                                                                       1-2 Years       3-6 Years          7-10 Y...
Solar Energy Sector                                                                       1-2 Years     3-6 Years         ...
Wind Energy Sector                                                                     1-2 Years     3-6 Years          7-...
Key Drivers and Restraints                    High           High power demand                                          an...
Table of Contents – New and Renewable Energy           1       Indonesia in the Global Context – New and renewable energyC...
Indonesia Power Sector – Opportunities across the value chain                         Generation               Transmissio...
Geothermal Power Generation Market AnalysisAround 276 geothermal prospects have been identified in Indonesia accounting fo...
Market Size and Potential for Geothermal EnergyIndonesia and the Philippines are well placed in terms of potential to furt...
Summary       The key in choosing investment in renewable energy sector will be eyeing   1       the government focus in p...
Thank You
About Frost & Sullivan About Frost & SullivanFrost & Sullivan, the Growth Partnership Company, enables clients to accelera...
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Investment in indonesia what are the upcoming opportunities. energy.27 july2011.jakarta

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Transcript of "Investment in indonesia what are the upcoming opportunities. energy.27 july2011.jakarta"

  1. 1. Investment in Indonesia: What are the upcoming opportunities ? Investment Opportunities in: ENERGYRajat Gupta, Consultant EPS PracticePradi Wigianto, Consultant EPS Practice
  2. 2. Primary Objectives for Utilities by 2020 1. Increase Power Reliability 2. Improve Energy Efficiency by minimizing interruptions in power by reducing waste in power delivery delivery and energy losses3. Accommodate Renewable Power 4. Preparing for Growing Power Load-Prevent congestion on the power linesand interruptions 2
  3. 3. Fuel Balance – Today and in 2020 Solar, Other Renewables 30000 7%er Solar, Other Windes 25000 Renewables 3% Hydro Wi Wind nd 20000 Nuclear N Hydro Nuclear Gas 15000 Gas Oil 10000 Oil Coal 5000 Coal 0 2010 2020 2 3
  4. 4. Outlook for the Energy & Power IndustryTop 10 World Power & Energy Trends over the Next Decade Major 2010 2015 2020 Trend Non-OECD countries World electrification Power Demand Low demand in West Surpass OECD China becomes reaches 80% Big expansion of Growth offset by boom in Middle East largest consumer electric/hybrid vehicles CCGT favourite generation technology Growth in World Gas demand peaks in OECD but New Age of keeps growing elsewhere pipeline network Natural Gas Massive boost in Shale gas boom in USA LNG availability Clean Coal Carbon Capture and Storage Ultrasupercritical technology Commercial CCS viability established Commercia- Pilot Plants becomes prevalent Worldly and large-scale development commences lisation Market Most power generation markets Growing trans-regional Towards a World Focus on emerging fully liberalised Liberalisation markets retail liberalisation power trading emissions trading system Solar and wind reach grid parity Renewables share in power generation Renewable Grid in some European markets 25% Worldwide and 30% in EU Parity Grid parity reached in majority of developed world 4
  5. 5. Outlook for the Energy & Power IndustryTop 10 World Energy & Water Trends over the Next Decade Major 2010 2015 2020 Trend Smart meters Smart meters reach Boosting breakthrough Expansion of virtual Smarter Grids taking off In US most consumers in for electric vehicles power plants and Europe developed world Green buildings become norm World coverage for energy- Energy World penetration of micro- in developed world Grid investments lead to efficient lighting Efficiency renewables and micro-CHP reduction in T&D losses Improved existing battery technologies emerge Grid-scale energy storage such as Energy Storage such as Li-ion, Nickel-Zinc, and Molten Salt pumped storage and CAES takes off Smart meters optimise consumer Demand Peak shaving through energy efficiency usage patterns and flatten peak demand Direct load control of smart Management and promotion of embedded generation appliances via remote management 5
  6. 6. Asia-Pacific is likely to witness the largest increase in theElectricity consumption owing to the economic development incountries such as China, India and so on. Regional Share of Electricity Consumption, 1990  Electricity consumption in China = 550 billion kWh in 1990  2008 = 2,200 billion kWh in 2008  Forecast to increase further to 6,000 billion kWh by 2030.  China’s share of the global market will increase by a staggering 15% from 5% in 1990 to 20% in 2030.  Other developing regions also up - rest of Asia’s up from 13% to 15%, Latin America’s Regional Share of Electricity Consumption, 2008 from 4% to 7% and India’s from 2% to 6%. Regional Share of Electricity Consumption, 2030 Source: Frost & Sullivan and EIA. 6
  7. 7. Oil & Gas Sector: Market Trends Dynamics of Oil Pricing Oil Price Forecast Scenarios • OPEC’s opinion is that oil supplies are constrained in the current situation 1 Unrest spreads to Saudi Arabia • Saudi Arabia is the main anchor for global oil supply $ 175/barrel and price stability 2US$/b Unrest in North Africa & Middle East (NA & ME) Continues Crude Oil Spot Price (all Countries) $ 125/barrel140 3 98 ME & NA unrest ends110 $ 100/barrel ME & NA unrest ends. Demand 480 falls in weak economies $ 75/barrel50 NA & ME Flare-up: Minimal Impact on Indonesia’s oil supply Indonesia sources most of its crude20 from Saudi Arabia and Singapore Indonesia maintains fuel stock for15 22 days Has agreement with neighboring 200 200 200 201 countries for oil supply incase 0 4 8 1 situation in the Middle East worsens 7
  8. 8. Oil & Gas Sector: Market TrendsMajor Emerging Trends Key Trend 1: Strong Demand Driving Prices Up Strong Demand from Asia Middle East & North Africa unrest impacts supply and Japan catastrophe to adds to speculation increase gas demand Indonesia Shallow-water & Mature Domestic Demand Versus Onshore Fields Import Commitments Depleting Crude oil prices increase driving up subsidy bill Need to increase exploration efforts and work mature fields harder 8
  9. 9. Oil & Gas Sector: Market TrendsMajor Emerging Trends Key Trend 2: The development of marginal fields There are around 6000 fields with reserves less than 5 trillion The gas reserves in relation to the size of the individual fields cubic feet (TCF). Most of them are considered stranded fields Stranded gas reserves refer to the natural gas, which have been discovered but cannot be developed due to their location disadvantage or negative economics of getting the natural gas delivered to the marketplace About 40% of global natural gas reserves are located far from the shores and are classified as stranded • Floating LNG Terminals (FLNG) can monetize stranded reserves held in over 2500 gas fields containing 0.1 to 5 trillion TCF Indonesia has identified 52 marginal fields (oil & gas) for development Source: Compiled by Frost & Sullivan 9
  10. 10. Outlook for the Energy & Power IndustryGrowth of Unconventional GasOutlook for the Energy & Power Industry: Unconventional Gas World Hotspot (World), 2010 Coal-Bed Methane (CBM) Potential, barrels of oil equivalent Shale Gas Potential, barrels of oil equivalent Canada Shale Gas 20bn+ Europe Shale Gas 90bn China CBM 75bn US CBM 15bn+ US Shale Gas 100bn China Shale Gas 50-100bn Indonesia CBM 75bn Australia CBM 40bn Latin America Shale Gas 50-100bn Source: Lambert Energy Advisory 10
  11. 11. Table of Contents – Conventional Energy 1 Indonesia in the Global Context – Conventional EnergyContents 2 Outlook for Opportunities in Indonesia – Conventional Energy
  12. 12. Key Opportunities in Indonesia Commercial High Opportunity Sector Growth Time Frame Viability Application Production, CBM, CTL Coal VERY HIGH VERY HIGH NOW and coal to gas Exploration, production Natural Gas VERY HIGH HIGH NOW FPSO and FSRU LNG plants LNG VERY HIGH HIGH NOW development, tankers Exploration and Oil HIGH VERY HIGH NOW production Source: Frost & Sullivan analysis. 12
  13. 13. Opportunity Assessment – Energy Sector Commercial High Opportunity Sector Growth Time Frame potential Application Electricity Power VERY HIGH HIGH NOW Gas and Coal infrastructure Gas Infrastructure HIGH HIGH Next 1 – 3 years FPSO, FLNG, FSRT and services Coal development HIGH HIGH NOW Low Calorie coal is rising Oil Infrastructure HIGH HIGH NOW Production equipment and services Pipeline HIGH HIGH NOW Intercity gas distribution network MODERATE to Brownfield services MODERATE NOW Old oilfields HIGH Fuel Infrastructure MODERATE MODERATE NOW Fuel station Refinery facilities MODERATE HIGH NOW LPG and fuel Drilling rigs MEDIUM HIGH Next 1 – 2 years Oil, Gas, CBM and geothermal A lot of Indonesian oil gas Decommissioning Low MODERATE Next 3 – 5 years field are old fields with Services aging rigs and equipment Source: Frost & Sullivan analysis. 13
  14. 14. Key Drivers and Restraints High High power demand and low Abundance of electrification ratio new energy and On going increase RE potential Large potential of energy price resources Indonesian highMarket Drivers fossil energy and demand from reserves economic and Impact international industry growth market Low LowMarket Restraints Land acquisition Need for more issues and long Impact expertise chain of Limited information and bureaucracy Investment issue awareness and subsidy Lack of scheme infrastructure High . Source: Frost & Sullivan analysis. 14
  15. 15. Oil Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 5.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High power demand• Industrial and automotive growth• Conventional sources Opportunities• Oil field exploration and production activities• Oil production service provider• Midstream and downstream sector Source: Frost & Sullivan analysis. 15
  16. 16. Gas Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 5.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High power demand• Industrial and automotive growth• Decrease in oil production Opportunities• Gas field exploration and production activities• Gas production service provider• CNG, LPG and LNG plant development Source: Frost & Sullivan analysis. 16
  17. 17. Coal Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 5.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High power demand• Industrial and automotive growth• Decrease in oil production Opportunities• Coal field exploration and production activities• Coal production service provider• Coal power plant development Source: Frost & Sullivan analysis. 17
  18. 18. Table of Contents – Conventional Energy 1 Indonesia in the Global Context – Conventional EnergyContents 2 Outlook for Opportunities in Indonesia – Conventional Energy
  19. 19. Oil & Gas Sector – Opportunities across the valuechain Upstream Downstream Exploration & Production Refining Distribution DevelopmentAction Items Step Up Increase Phase Out Rejuvenate Exploration Refining Subsidies Brown Fields Efforts Capacity Development Bring Strengthen of Marginal Projects Upgrade Domestic Gas Fields Onstream as Existing Network Scheduled Facilities Infrastructure • Investment in • Brownfield services • Refinery products Petroleum, CBM and • Decommissioning and services • Retail InfrastructureOpportunities Shale Gas acreages Services • Project investment for non-subsidised • Marginal field fuel development • Addition of gasoline retail stations • FPSO • FLNG • Marine Support • Gas Network Vessels Infrastructure Source: Compiled by Frost & Sullivan 19
  20. 20. Oil & Gas Sector: Unconventional Gas is set to emergeas a viable option Coal Seam Gas (CSG)/CBM to LNG Projects Environmental Impact Controversies Restraining Growth of the IndustryCommercial production of CBM is still at a nascent stage in Indonesia • The total CBM reserves in Indonesia is estimated to be 450 TCF • This is more than double its natural gas reserves and the worlds second largest CBM reserves after China. • At least 10 percent of these reserves can be extracted economicallyProduction Start-up in 2011; to be supplied to domestic power plants • By 2015, Indonesia’s total production of unconventional gas to reach 100 million cubic feet per day • By 2020, unconventional gas production to reach 500 million cubic feet per day • Unconventional gas and CBM are expected to account for 30.0 percent of Indonesia’s energy mix in 2025Shale Gas Exploitation is a Possibility • Indonesia is estimated to have shale gas reserves of 1000 TCF • Shale gas can be produced in Indonesia by 2018 provided right steps are taken for harnessing this energy resource. 20
  21. 21. Oil & Gas Sector: Exploration and Production Continue to remain a massive investment area Oil Proved Reserves 6.0 Thousand MillionTrillion Cubic 5.0 Meters 4.0 Barrels 3.0 2.0 1.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 • More gas provinces to increase proven natural gas • Falling Oil reserves Reserves • Unconventional gas to add • Oil projects are to reserves more complex • More investments in gas now projects Total Upstream Exploration & Production Expenditure in 1TCM=35.3TCF Indonesia for 2011 is forecast to be US$ 17 billion. 21
  22. 22. Oil & Gas Sector: Offshore opportunitiesProspective FPSO Projects Deepwater Potential: Tarakan basin; Papalan Basin Shallow Water• Terang/Sirasun FPSO (TSB), Thrust from Government for faster development of gas projects for• Pagerungan meeting domestic and export gas demand• Madura• Kakap Natuna• Bukit Tua Masela Block Deep Water 10 TCF Reserves; water• Gehem depth 300m to 1000m• Gendalo Inpex to invest $ 4.9 billion• INPEX Masela FLNG For floating LNG plant (2.5• Petramina FSRU mmtpa) with production start-up in 2016 East Kalimantan Makassar Strait Gehem, Gendalo, Gandang, Maha and Bangka fields Chevron to developing East Kalimantan deepwater fields, Gehem and Gendalo. Invest ment $ 7 to 8 billion. Plan Of Development approved Source: Planning Dept, Govt of Indonesia; Petroleum Geo-Services ; Compiled by Frost & Sullivan 22
  23. 23. Oil & Gas Sector : Floating Storage Re-gas Storage Units(FSRU) ProjectsLocation : Belawan, North Sumatra Location : Jakarta Bay, West JavaStart up plan : 2013-14 Start up plan : 2012Capacity : 3 MTPA Capacity : 3 MTPA Contractor : Golar LNG Energy Location : East Java Start up plan : 2013-14 Capacity : 2-4 MTPA 23
  24. 24. Coal Production and Consumption Increasing prices and unreliability over global coal supply, and rapid industrial growth of Indonesia have led to expansion in both local and export market for coal Coal Sector: Production, Consumption and Export, 2005-2010 300 • Over half of local consumption 250 would be due to power generation • Local coal companies are focusing 200 on low calorie coal which gainingMillion Tons 150 popularity in local market • Kalimantan (60%) and Sumatra 100 (38%) have the largest reserves • Significant opportunities exist in 50 Coal to Liquid (CTL), Coal Based Methane (CBM) and Coal to gas 0 apart from coal mining 2005 2006 2007 2008 2009 2010 Production Export Domestic Source : Indonesian MOE (ESDM) 24
  25. 25. Summary New investments is the key to sustain Indonesia energy security. 1 Decreasing production of energy is happening in Indonesia due to the decrease of investment. Growth opportunities are expected to be very high in the following sectors 2 – natural gas, LNG, and coal throughout the forecast period to meet the rapidly growing domestic energy needs and export market demand. Oil based power generating plants are likely to be replaced by energy 3 efficient gas fired or coal fired power plants based on sub/super critical technology in the long term. Unconventional gas especially CBM and shale gas will increasingly become 4 popular to satiate energy needs. 25
  26. 26. Table of Contents – New and Renewable Energy 1 Indonesia in the Global Context – New and renewable energyContents 2 Outlook for Opportunities in Indonesia – New and renewable energy
  27. 27. Indonesia Power Sector – An Overview Installed Capacity Forecast, 2010 and 2030 Installed Capacity Forecast, 2010 and 2030 Indonesia Indonesia 140 2010 2030 120Total Installed Capacity 100 40 110(GW) 80PT PLN Ownership 75.0% 60.0% 60IPP Ownership 25.0% 40.0% 40 20Demand (GW) 60 120 0 2010 2030 Total Installed Capacity (GW) Demand (GW) • Oil dominates the country’s energy mix. Oil reserves are depleting, although gas and coal reserves have been increasing. • Part of energy prices are still subsidized which burdens the state budget and interferes the development of alternative energy. • Electrification ratio was about 66.0% in 2008, increased to 72.0% in 2010 and is expected to reach 80.0% by 2014. • Total installed power capacity is 40,000 MW in 2010; nearly 75.0% percent of the country’s installed base is run buy PLN and its subsidiaries, IPP accounts the rest of 25.0%. Source: Frost & Sullivan analysis. 27
  28. 28. Renewable Energy Potential in Indonesia Renewable Energy Type Potential Resources Installed Capacity Underdeveloped Potential Geothermal 28534 MW 1189 MW 92.5% Hydro 75670 MW 5705.29 MW 95.80% Mini / Micro Hydro 769.69 MW 217.89 MW 71.70% Biomass 49810 MW 1618.40 MW 96.80% Solar 4.8 kWh / m2 / day 13.5 MWp 99% Wind 3 - 6 m/s 1.87 MW 99% Uranium 3000 MWt 30 MWt 100% Source: MOE ESDM, US Department of Commerce obtained from PLN 28
  29. 29. Key Opportunities in Indonesia Commercial High Opportunity Sector Relevance Time Frame Viability Application Biomass, Biogas and Bioenergy VERY HIGH HIGH NOW Biofuel Geothermal VERY HIGH HIGH NOW On grid applications Hydro Power VERY HIGH MODERATE NOW Large and Mini Hydro Municipal and Industrial Waste to Energy HIGH MODERATE Next 3-5 years waste to energy Rural offgrid Solar PV HIGH LOW Next 3-7 years applications Small capacity wind Wind Power MODERATE MODERATE Next 4-8 years farms and potential offshore Nuclear Power MODERATE LOW Next 15 - 20 years Utility scale power plant Source: Frost & Sullivan analysis. 29
  30. 30. Opportunity Assessment – Key Products High Opportunity Equipment Growth Commercial potential Time Frame Application Last mile meters especially inElectricity Meters VERY HIGH MODERATE NOW rural areas Will be mostly MV and LV Cable & Wire HIGH HIGH NOW cables Transformer needs for MV Transformer HIGH HIGH NOW groupCBM and Shale Gas Specialized production MODERATE HIGH Next 2 – 3 years development equipment Specialized tools and Geothermal MODERATE HIGH NOW equipment Boilers, heat exchangers, turbines and MODERATE HIGH NOW Rural offgrid applications related auxiliary equipment Drilling rigs MODERATE HIGH Next 1 – 2 years CBM and geothermal For renewable energy source Battery LOW MODERATE Next 3 – 7 years power production and EV car For renewable energy source Power Storage LOW MODERATE Next 3 – 7 years power production Solar Cell LOW MODERATE Next 2 – 5 years In rural marginal area Wind Blade LOW MODERATE Next 5 - 10 years In rural marginal area 30
  31. 31. Geothermal Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 3.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High demand new and renewable energy for national power security• Investment in geothermal exploration and production• The second biggest geothermal sourcing Opportunities• Geothermal field exploration and production activities• Geothermal production service provider• Geothermal power plant development Source: Frost & Sullivan analysis. 31
  32. 32. Bioenergy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 2.5 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High demand new and renewable energy for national power security• Investment in biofuel• Investment in biomass power production facilities• Petroleum reserves is depleting Opportunities• Biomass power electricity production development• Biofuel plant• Biofuel transportation technology• Biomass energy source production (e.g waste processing plant)• Biomass and biofuel tools and equipment Source: Frost & Sullivan analysis. 32
  33. 33. Hydropower Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 2.5 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High demand new and renewable energy for national power security• Investment in hydro and micro hydro power plant• The biggest power energy source potential in Indonesia Opportunities• Hydro power plant development• Equipment and service in hydro power plant• Micro hydro power plant is the most popular for hydro energy source Source: Frost & Sullivan analysis. 33
  34. 34. CBM Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 2.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• The third biggest resources in the world• Investment in CBM field production• New source of energy for Indonesia• Multi used as power source and LNG Opportunities• CBM field exploration and production activities• Starting of CBM production in 2012 will need CBM specialized tools and equipment• CBM production service provider• Additional LNG facilities to convert CBM to LNG Source: Frost & Sullivan analysis. 34
  35. 35. Solar Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 1.0 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High demand new and renewable energy for national power security• Investment in solar energy power source• High potential in solar source Opportunities• Solar PV equipment (solar cell, battery and power storage) producer and provider• Solar PV equipment service maintenance provider• Solar energy for power electricity investment Source: Frost & Sullivan analysis. 35
  36. 36. Wind Energy Sector 1-2 Years 3-6 Years 7-10 Years 2 3 High 1 4 Growth 0.5 Medium Growth 0 5 Growth Potential 2011 Low Growth Growth Factor• High demand new and renewable energy for national power security• High domestic demand for power electricity• Investment in wind energy power production Opportunities• Wind energy equipment (blade, battery and power storage) producer and provider• Wind energy equipment service maintenance provider• Wind energy for power electricity investment Source: Frost & Sullivan analysis. 36
  37. 37. Key Drivers and Restraints High High power demand and low Abundance of electrification ratio new energy and On going increase RE potential Large potential of energy price resources Indonesian highMarket Drivers fossil energy and demand from reserves economic and Impact international industry growth market Low LowMarket Restraints Land acquisition Need for more issues and long Impact expertise chain of Limited information and bureaucracy Investment issue awareness and subsidy Lack of scheme infrastructure High . Source: Frost & Sullivan analysis. 37
  38. 38. Table of Contents – New and Renewable Energy 1 Indonesia in the Global Context – New and renewable energyContents 2 Outlook for Opportunities in Indonesia – New and renewable energy
  39. 39. Indonesia Power Sector – Opportunities across the value chain Generation Transmission Distribution Increase Promote Diversify energy Action Items electrification fuel mix efficiency ratio Ensure long Increase Demand term power power supply management security reliability Customer satisfaction • Investment in renewable • Smart • Increase in T&D metering/Remote Opportunities energy • Geothermal and biomass infrastructure meter reading to be the key sourced of renewable energy • Grid automation • Upgrade and • Focus on coal based maintenance of • Utility process power generation existing network automation • Increase in coal mining • Hydro power • Distribution infrastructure Source: Compiled by Frost & Sullivan 39
  40. 40. Geothermal Power Generation Market AnalysisAround 276 geothermal prospects have been identified in Indonesia accounting for an estimatedtotal potential capacity of 28,803 MW. About 60.0% of the prospective locations are in Sumatraand Java islands Geothermal Energy Sector: Potential Geothermal Reserves, 2010 Indonesia • Geothermal reserves is estimated at 14,730 MWe with 2,288 MWe of proven reserves.Source: MOE (ESDM) 40
  41. 41. Market Size and Potential for Geothermal EnergyIndonesia and the Philippines are well placed in terms of potential to further growtheir geothermal capacities Top Geothermal Countries by Capacity & Pipeline Source : Emerging Energy Research 41
  42. 42. Summary The key in choosing investment in renewable energy sector will be eyeing 1 the government focus in power infrastructure New and renewable energy will start to developed as government put their 2 focus in this sector. Policies and incentives will boost the development of these energy sources. Feed in Tariff in power purchase agreement will become the most 3 important factor Geothermal and Biomass will be the key for short term investment. 4 Hydropower will included for midterm investment. Whilst Solar, Wind and other source of RE will be the longer term investment 42
  43. 43. Thank You
  44. 44. About Frost & Sullivan About Frost & SullivanFrost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth andachieve best-in-class positions in growth, innovation and leadership. The companys GrowthPartnership Service provides the CEO and the CEOs Growth Team with disciplined research andbest-practice models to drive the generation, evaluation, and implementation of powerfulgrowth strategies.Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies,emerging businesses and the investment community from more than 40 offices on sixcontinents. To join our Growth Partnership, please visit http://www.frost.comDewi NurainiCorporate Communications, Frost & SullivanPhone : (+6221) 571.0838 / 571.3246Email : dewi.nuraini@frost.com http://www.facebook.com/pages/Frost-Sullivan/ http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan http://twitter.com/FROST_ID 44
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