This presentation discusses Indonesia's strategies for developing renewable energy, particularly geothermal power, through carbon markets. It notes that 15 geothermal projects are part of Indonesia's CDM pipeline, with 4 having produced CERs. Geothermal development provides clean energy and large emission reductions. Future carbon market roles could attract green investment and be used by financial institutions. Indonesia's strategy includes developing multilateral, bilateral, regional, and domestic carbon markets to produce carbon credits for mandatory and voluntary systems. Renewable energy like geothermal could be supported through new CDM, creditable NAMAs, voluntary markets, and bilateral offset credits.

1. Carbon Market Role
in Indonesia Renewable Energy Development:
Geothermal Case Study
Dicky Edwin Hindarto
Coordinator of Carbon Trade Mechanism Division
National Council on Climate Change of Indonesia
National Council on Climate Change of Indonesia

2. Presentation Structure
1. Why do we choose carbon market?
2. How is the current condition of
Indonesia geothermal projects in
carbon market?
3. Is the market only CDM?
4. What are Indonesia strategies on the
next carbon markets?
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3. How to finance green development in Indonesia?
Renewable Energy is a part of our green development plan in Indonesia
The financing needs are huge and in great variety; consequently require
a mix of market and non-market approaches
Market Non-market
Compliance market National budget
(CDM)
Private investment
Voluntary market
(VCM) Foreign public funding
Policies (e.g fiscal, banking
incentives and disincentives)
Future carbon markets Philanthropic contribution
(companies, NGOs)
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4. Indonesia carbon market status
Solar, 1 Afforestation, 1
 181 CDM projects received DNA Agriculture, 1
Cement, 1
approval (as of May 31st, 2012) , PFCs and SF6, 3 Reforestation, 1
EE households,
N2O, 3
including 5 PoAs. 76 of CDM 1
Biomass EE Industry, 7
projects are registered and 19 energy, 35
EE supply side, 7
projects have issued their CERs.
 24 of voluntary carbon market Methane
avoidance, 98
EE own
generation, 7
projects had been developed. Fossil fuel
switch, 10
Fugitive, 5
PFCs and SF6, 1 Solar, 1
Geothermal, 15
Coal bed/mine
N2O, 1 Cement, 1 methane, 2 Hydro, 27
Landfill gas, 12
EE Industry, 2 CDM projects in Indonesia
Biomass
energy, 12
EE supply side,
2  New carbon market projects are being
Methane Fossil fuel developed
avoidance, 35 switch, 3
 77 of REDD+ demonstration activities have
Fugitive, 1
developed.
Geothermal, 4
 Japan government have done 32 FS under the
Hydro, 6
Landfill gas, 7 Bilateral Offset Mechanism Proposal (3
CDM registered projects projects are geothermal)
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5. Geothermal projects in Indonesia carbon market (> 1500 MW)
Solar Biomass
0%
 15 geothermal projects are in our
energy
EE supply
Cement 2%
side
0% 3% Methane
CDM pipeline. Fugitive
avoidance
7%
29%
 1 project is developed under
voluntary carbon market scheme.
Geothermal
 4 projects have already produced
59%
CERs and VERs. Indonesia issued CER
Gunung Salak ‘94 Wayang Windu ‘99 Darajat ‘94 Kamojang ‘83
Reserve: 600 MW Reserve: 385 MW Reserve: 432 MW Reserve: 333 MW
Production: 375 MW Production: 227 MW Production: 255 MW Production: 200 MW
VER: 130.500 tCO2 CER: 709.535 tCO2 CER: 2.219.297 tCO2 CER: 92.691 tCO2
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National Council on Climate Change of Indonesia

6. Our experiences in geothermal development on carbon market
 The geothermals are green and clean projects.
 Most of the additionality criterias are fit to the
geothermal projects, but new geothermal electricity
ceiling price could affected some difficulties on
additionality test if it is developed under CDM.
 The emission reductions are relatively huge.
 Some of the new markets mechanisms initiatives that
currently still being developed are targeted to the
renewable energy development, including geothermal.
Geothermal development
under new market mechanism
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7. Geothermal development impacts on emission reduction
Java-Madura-Bali electricity grid
emission factors
Emission factor (ton CO2eq. / MWh)
Year
Ex-post Ex-ante
2007 0,851 -
2008 0,804 -
Kalimantan and Sulawesi electricity
2009 0,713 0,725
grid emission factor 2010
Emission factor (ton CO2eq. /
Electricity grid MWh)
Ex-post Ex-ante
East Kalimantan 0.715 0.742
West Kalimantan 0.786 0.775
Central and South Kalimantan 1.280 1.273
Geothermal North and Central Sulawesi and Gorontalo 0.121 0.161
impacts South, South East, and West Sulawesi 0.267 0.269
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8. Future carbon market roles on RE projects
 Other revenue flow from carbon
market for operational and
maintenance
 Reduce financial and technical risks
 To attract “green investment”
+
 To be used for banking and financial
institution purposes
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9. Indonesia new carbon markets development strategy
• Currently still being negotiated
• Robust, and maybe still
Multilateral complicated
carbon market • Environmantal integrity and
sustainable development criteria
issues
• Directly between Indonesia and
Bilateral and some developed countries
• International carbon offset
regional carbon • Japan and Australia have
market already expressed their
interests
Renewable • Could be mandatory or
Energy voluntary based
Domestic carbon • National boundary
market • Simple and robust
• Could be used for NAMAs
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National Council on Climate Change of Indonesia

10. Indonesia future carbon market frame work
International Carbon Markets
Direct link with other International
Linking via offset
domestic market Crediting
mechanism
mechanism Mechanism
DOMESTIC MARKET MECHANISMS
that based on voluntary market system
REGIONAL AND
(e.g. Emissions trading scheme or sectoral trading) BILATERAL MARKET
Indonesia will prepare standard, policies, and that based on regional and
market instrument. bilateral agreement and domestic
CARBON CREDIT SUPPLIER emission reduction policies
Indonesia will produce carbon credit for (e.g. NAMA or sectoral crediting)
mandatory and voluntary based market system for
international market.
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11. Where do we put RE and geothermal in future carbon markets?
New
CDM
Other
Creditable
New NAMAs
Markets Renewable
Energy
BOCM VCM
 Traditionally, RE, particularly geothermal, still can be developed under CDM. There are some countries that still
want to continue CDM post 2012.
 Renewable Energy could be one of the main target in Creditable NAMAs.
 VCM can be used for “non additionality” RE projects, particularly geothermal.
 Some countries are eager to invest the RE projects using BOCM scenario (3 geothermal FS have been done).
 One or two other new markets mechanism still being developed and, geothermal is one of the main target.
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12. Terima kasih
Thank you
National Council on Climate Change of Indonesia