01 - SICCR-TAC - Alternatives To Leuser Geothermal Development PDF

Support to Indonesia’s Climate Change Response
Technical Assistance Component (SICCR-TAC)
Alternatives to Leuser Geothermal

Development
March 2017
Indonesia - SICCR - TAC
Jakarta Office:
Manggala Wanabakti Building, Block 4, 5th Floor
Jl. Gatot Subroto, Senayan, Jakarta Pusat
T : +62-21 570 32 46 ext. 4016
F : +62-21 571 12 37
Banda Aceh Office:

Jl. Sudirman No. 21, Geuceu Iniem
Banda Aceh 23239
T : +62-651 630 27 82
Author:
Andre Susanto
Zulfan Herman
Teuku Faisal
Photo:
Phil Harman
Distributed by:
SICCR – TAC
Jakarta, March 2017
The European Union is made up of 27 Member States who have decided to gradually link together their
know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have built a
zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and
individual freedoms.
The European Union is committed to sharing its achievements and its values with countries and peoples
beyond its borders.
The European Commission is the EU’s executive body.
Implemented by: Consortium Partners:
Deutsche Gessellschaft
für Internationale
Zussamenarbeit (GIZ) GmbH
Alternatives to Leuser Geothermal
Development
The Support to Indonesia’s Climate Change Response –
GIZ International Services is implementing SICCR-TAC together with AHT and SNV under the auspices of
the Ministry of Environment and Forestry, represented by the Directorate General of Climate Change. The
Government of Aceh, represented by the Aceh Provincial Environment and Forestry Office, is the main local
stakeholder.
The project has a large number of existing and potential partners. The consortium will works with the provincial
and district authorities in Aceh, other public bodies, as well as private sector actors, local communities,
universities and NGOs.
The focus of the project is on building the capacity of the Government of Aceh in its effort towards low-
carbon/low-emission economic development in the Land Use, Land Use Change and Forestry sector.
One of the project’s main activities is strengthening Forest Management Units (FMU) as local units for
sustainable forest management in Aceh. The project promotes strategic alliances and sharing of lessons
learned on implementation of the REDD+ and climate change mitigation and adaptation strategies.
The project supports capacity development of the Ministry of Environment and Forestry’s Directorate General
of Climate Change at the central level, and to its regional offices (Balai PPI), particularly targeting the Balai PPI
Palembang, which covers the Province of Aceh.
This project is implemented by GIZ International Services, AHT and SNV. The views expressed in this
document do not necessarily reflect the views of the European Commission.
Contents
1 Executive Summary 1
2 Introduction 2
3 Leuser National Park 3

3.1 Critically Endangered Species Habitats in Leuser 5
3.2 High Conservation Value Area of Leuser Ecosystem 6
3.3 Leuser Park Protection of Conservation Area in Aceh and Indonesian Spatial Plan 7
3.4 Loss of Hydrological Functions 10
4 Geothermal Development in Indonesia 12

4.1 Geothermal Development in Aceh 12
4.2 Geothermal Potential in Leuser 12
4.3 Other Geothermal Potential in Aceh 13
4.4 Geothermal Development Risks in Indonesia 13
5 Electricity Demand in the Aceh 15

5.1 Electricity Demand in Gayo Lues District 16
6 Other Renewable Energy Potential as Alternative 17

6.1 Solar PV Potential 17
6.2 Hydro Power Potential 18
6.3 Wind Power Potential 18
7 Conclusion 18
Annex 1 – Geothermal Development in Indonesia 20

1.1 Geothermal Development in Aceh 21
1.2 Geothermal Development Risks 22
1.3 Geothermal Potential In Leuser 24
1.4 Geothermal Potential in Aceh Beyond Leuser 25
Annex 2 – Aceh Electricity Demand 27

2.1 Gayo Lues District 27
2.2 PLN Branch in Gayo Lues District 33
2.3 Electricity Need in Gayo Lues District 35
2.4 Use of Microhydro Power in Gayo Lues District 35
2.5 Summary 37
2.6 Sources and References 37
Annex 3 – Alternative Renewable Energy Technologies Analysis 39

3.1 Solar PV Analysis 40
3.2 Wind Power Analysis 46
3.3 Hydropower Analysis 53
Alternatives to Leuser Geothermal Development iii

Figures
Figure 1: Results of the Survey that Involved the Project Developer 2
Figure 2: Leuser Ecosystem Map and Wildlife Distribution 4
Figure 3: Rhino Conservation Areas in Leuser Ecosystem from TFCA
(Tropical Forest Conservation Action) 5
Figure 4: Critically Endangered Species Habitats 6
Figure 5: Elephant Corridor, Conservation Areas and Leuser National Park 6
Figure 6: Aceh Spatial Plan 7
Figure 7: Ministry of Environment and Forestry’s Forest Area and Marine Conservation Plan 8
Figure 8: Erosion Rate 9
Figure 9: Loss of Hydrological Function Areas Due to Run Off Condition 11
Figure 10: MEMR Estimate of Geothermal Potential within Leuser 12
Figure 11: MEMR Estimate of Geothermal Potential within Aceh 13
Figure 12: Risk Curve for Geothermal Projects 14
Figure 13: MEMR Estimate of Geothermal Potential within Aceh
(PLN Electricity Supply Plan 2016-2025) 15
Figure 14: Distance from Potential Geothermal Site to the Nearest Population Centers and
to 150Kv Substations 16
Figure 15: Electricity Generation Cost (PLN Audited Report 2015) 17
Figure 16: Flowchart of Geothermal Development Process for Electricity 20
Figure 17: Aceh Various Mining Concession Area for Geothermal (WKP) 21
Figure 18: Jaboi Mining Concession Area for Geothermal 21
Figure 19: Seulawah Agam Mining Concession Area for Geothermal 22
Figure 20: Aceh’s Potential Energy Map (PLN Electricity Supply Business Plan 2016-2025) 24
Figure 21: Letter from the Governor of Aceh to the Various Ministries in Jakarta 25
Figure 22: MEMR Estimate of Geothermal Potential within Aceh 26
Figure 23: Gayo Lues District in the Central Highlands of Aceh 27
Figure 24: Administrative Map of Gayo Lues (source: BAPPEDA Gayo Lues) 28
Figure 25: Percentage Area by Subdistrict in Gayo Lues District 28
Figure 26: Distance from the District Capital by Subdistrict 29
Figure 27: Map of Electricity System and Power Plant Capacities in Aceh Province 34
Figure 28: Diesel Power Plant Rema 3 MW in Blangkejeren 35
Figure 29: A Microhydro in Gayo Lues, Pltmh Rerebe 36
Figure 30: Utilization of Electricity from Microhydro Power for Heating Patchouli Furnace in
Rerebe 36
Figure 31: SolarGIS Data – Global Horizontal Irradiation (Near Lhoksumawe) 40
Figure 32: SolarGIS Data – Global Horizontal Irradiation (Near Meulaboh) 40
Figure 33: DANIDA Wind Prospecting Database for Indonesia 46
Figure 34: 3TIER Global Wind Dataset 5km Resolution (Near Banda Aceh) 46
Figure 35: PLN Estimates of Various Potential Energy Sources Around Indonesia 53
iv Alternatives to Leuser Geothermal Development

Tables
Table 1: Geothermal Potential within Gayo Lues District 12
Table 2: Geothermal Potential within Aceh 13
Table 3: Project Development Approach for a 50MWe Geothermal Resource after
ESMAP (2012) and Deloitte (2008) with Anticipated Costs 14
Table 4: Castlerock Reassessment of Geothermal Work Area Potentials 22
Table 5: Population by Subdistrict in Gayo Lues District (2015) 29
Table 6: Number of Households in Gayo Lues Regency 30
Table 7: Land Use in Gayo Lues Regency 30
Table 8: Agricultural Production in Gayo Lues 31
Table 9: Plantation Area and Total Production by Commodity 32
Table 10: Livestock Types in Gayo Lues 32
Table 11: Critical Land Area Inside and Outside Forested Area 33
Table 12: Total Electricity Consumption and Revenue 34
Table 13: Installed Microhydros 37
Alternatives to Leuser Geothermal Development v

Abbreviations
Abbreviation Explanation
Balai Besar Taman Nasional Gunung Leuser (Leuser Mountain National

BBTNGL
Park High Council)
GoA Government of Aceh
GoI Government of Indonesia
IRR Internal Rate of Return
MEMR Ministry of Energy and Mining Resources
PLN Perusahaan Listrik Negara (Indonesia’s Electricity Utility Company)
PPA Power Purchase Agreement
SICCR-TAC Support to Indonesia Climate Change Response
TNGL Taman Nasional Gunung Leuser (Leuser Mountain National Park)
UNESCO United Nations Educational, Scientific and Cultural Organization
WKP Wilayah Kerja Pertambangan (Mining Working Area)
vi Alternatives to Leuser Geothermal Development

1. Executive Summary
Under perfect conditions it takes several years of project development and exploration phases before
any geothermal PPAs can be signed, let alone starting electricity production. Some estimates the cost
of developing and implementing a 50MWe geothermal power plant to be between US$3-4 million.
Geothermal projects have the high risks of exploration like oil and gas projects but the financial return is
low and slow like infrastructure projects.
Additional challenges are faced by the geothermal projects proposed by PT Hitay Panas Energi. The
location within the core zone of the Gunung Leuser National Park has significant risks such as:
 Too far from significant electrical load/demand centers
 Too far from the existing 150kV substations for transmission across Northern Sumatra
 Environmental and social assessment approval for lenders will be difficult to obtain
 Very high exploration risks
 Very high environmental impact due to the watershed status and disturbance of the designated
habitats and migration corridors of endangered species
 The zonation change, one of its kind for an energy project, will set up a precedent for other
zonation change claims in the future, threatening the integrity of the GLNP and, more broadly, of
the entire Leuser Ecosystem.
The proposed location of the geothermal plant, Kappi, is directly on top of the designated habitat areas of
Sumatran rhinoceroses, elephants, tigers and orangutans. The access roads and development impacts
that will be built due to the needs of the geothermal power plant will further disturb the designated
habitat areas of Sumatran tigers and rhinoceros. Connecting the power plant to the existing grid will also
have environmental impacts such as deforestation and species habitat fragmentation.
Aceh has an abundance of natural resources including renewable energy. Biomass, biogas and biofuel
power plants are easily developed pending further studies of the feedstock availability. Solar PV
is abundant especially in the north and south shores. Hydro power is also available due to Aceh’s
mountainous regions and the large amount of protected forests as catchment areas. While wind
resource is not as available as the other technologies, there is still a handful of opportunities to develop
wind projects in Aceh.
Using an industry standard software called RETScreen, alternative renewable energy projects are studied
for financial feasibility. Reliable GIS resources were used to predict the energy potential estimates and
determine the financial viability. Using typical values for project development and implementation in the
Aceh region, a 22MW wind project in a highly probable location was evaluated to yield a 13.1% IRR. A
22MW solar PV project was evaluated to yield a 15.9% IRR. The most appropriate technology is hydro
power where a 20MW hydro power project was evaluated to yield over 25% IRR. They are also located
where the resources are available to enable project developers to consider larger projects (>50MW) to
further reduce costs and increase IRR.
This study concludes that any geothermal project development within the core zone of the Gunung
Leuser National Park is unlikely to yield high profits without spending significant resources. It is much
easier to attempt to develop geothermal projects in Aceh outside of the park. Even more interesting
is that other alternative renewable energy technologies can provide attractive investment returns with
much less hassle and fewer social and environmental impacts.
Alternatives to Leuser Geothermal Development 1

2. Introduction
On the 17th of June, 2016 a meeting was held in Medan, North Sumatra to evaluate the rezoning of
Gunung Leuser Mountain National Park (GLNP). At this event, the GLNP authority asked for public
opinion on the rezoning of the National Park. Of note was the rezoning of the core zone area in the Kappi
area. Following the zoning laws, the final decision lies with the Ministry of Environment and Forestry.
However, in late 2016, the Aceh governor’s office stated its support for a plan by PT Hitay Panas Energi,
a Turkish energy company, to build a geothermal-energy plant. This plant is proposed to be in the
core conservation zone of the GLNP (and thus a key conservation area of the Leuser Ecosystem) with
total area of development at 5,017 hectares. This location is also the part of the protected national
park Taman Nasional Gunung Leuser (TNGL). In addition to being zoned as a national park within the
Indonesian legal system, the area is also a UNESCO designated World Heritage Site.
Figure 1: Results of the Survey that Involved the Project Developer
Aceh’s governor sent a letter to the Minister of Environment and Forestry to request the partial rezoning
of some of the core conservation zone within the GLNP to become a use/development zone. In addition,
the letter also requests that a permit be given to PT Hitay Panas Energi to explore geothermal potential
in the area.
Rezoning of the GLNP will affect the habitats of various endangered species such as Sumatran
rhinoceroses, elephants, orangutans and tigers. Other impacts to the environment include the loss
of hydrological functions and significant increase in erosion and sedimentation rates. The affected
2 Alternatives to Leuser Geothermal Development

areas will include the damage caused by additional infrastructures required to exploit the resource and
connect the power plant to the existing grid. New access roads and additional buildings will further
reduce the endangered species habitat and negatively affect wildlife migration patterns.
The location of the geothermal power plant in GLNP makes little sense as it is an isolated area of the
province. It is far from any electricity load centres such as cities and industrial parks. If the plan is to
connect to the Sumatra electrical transmission lines, it is even farther and there would be significant and
costly electrical losses due to the distance, without mentioning further environmental damages.
There are other geothermal fields within the province that have been identified by the Indonesian
government that are located outside the national park. These other locations are estimated to have
significantly more potential than the Leuser field. These locations are also closer to the electrical load
centres and the Sumatra electrical transmission lines.
In addition to having other geothermal fields located outside of the national park, the province of Aceh
also has other renewable energy resources. These other resources include solar, wind, hydro and various
types of bio-energy potential. Generally, these other technologies are quicker to deploy and provide
viable returns on investment.
3. Leuser National Park

Established as an Indonesian National park in 1980 (Pengumuman Menteri Pertanian No. 811/Kpts/Um/
II/1980), Leuser Mountain National Park was designated to be 792,675 hectares. A Minister of Forestry’s
decree in 1997 (Keputusan Menteri Kehutanan No. 276/Kpts-II/1997) appoints a total of 1,097,692
hectares as part of the Leuser Mountain National Park. In 2004, UNESCO designated the area as a
World Heritage Site.
This National Park is an important ecosystem for tropical rain forest due to a variety of reasons. It is
the last place on earth where Sumatran elephant, rhinoceros, tiger and orangutan are found within one
area.1 There are over 125 species of mammals within the ecosystem, and this represents one quarter of
Indonesia’s species of mammals.
The GNLP area is located within the Leuser Ecosystem area (Kawasan Ekosistem Leuser KEL) covering
a portion of 33% of the larger Leuser Ecosystem. The KEL has an important role as a buffer area of the
GNLP and the area is critical in protecting the National Park from external threats.
The KEL with an area of 2.6 million hectares lies within the Aceh and North Sumatra Province and is
the largest intact rainforest in the island of Sumatra, and a part of UNESCO World Heritage site as
Tropical Rainforest Heritage of Sumatera. The KEL is an exceptional ecosystem supporting biodiversity
of unique fauna and flora, established by the Presidential Decree No 3/1998. It is also designated, as a
National Strategic Area for its Environmental Protection Function in law no 26/2007, further detailed in
government regulation number 26/2008.
The purpose of the National Strategic Area for Environmental Protection Function is to protect and
increase the ecosystem functions, biodiversity and to protect landscape, and cultural heritage. However,
whereas the KEL has been established as a National Strategic Area with the national policy, it is not
acknowledged in the Aceh spatial plan Qanun no 19/2013. This exclusion of the KEL area from the Aceh
spatial plan has left the area open for development.
1 Leuser contains some of the best remaining habitat for the Sumatran varieties of elephant (Elephas maximus sumatrensis),
orangutan (Pongo abelii), rhinoceros (Dicerorhinus sumatrensis) and tiger (Panthera tigris sumatrae), all critically endangered
species.

Figure 2: Leuser Ecosystem Map and Wildlife Distribution

3.1. Critically Endangered Species Habitats in Leuser

The proposed area for geothermal development, Kappi, is identified as one of the established Sumatran
rhinoceros habitat according to Aceh Single Map studies conducted by the European Union. The habitat
is largely located inside the Leuser Ecosystem and it shows the importance of Leuser Ecosystem for
their protection.
Leuser Ecosystem contains 6 rhinoceros populations located in Beutong, Samarkilang, Kemiri, Bohorok,
Babah Rot, Menggamat-Meukek, Mamas, and Kappi. Kappi is special because it is the specific proposed
location for geothermal development. The established rhino habitat in Kappi is designated as an area of
100,000 hectares.
Kappi is very important because this area contains critically endangered species habitats. Critically
endangered species mean that these species are very close to extinction, and each individual is vital
as a potential progenitor of new populations. This area should be protected to make sure that the rhino
population is saved from extinction. The persistence of viable populations through habitat protection in
Kappi should be ensured as well.
Kappi is considered as high conservation value area because it is important for the carrying capacity and
population size of habitat required by the rhino species. The carrying capacity of a habitat is a result of its
condition and area. The ability of an area to meet requirements of a species for birth, reproduction and
survival is habitat quality. If a habitat decreases beyond a specific threshold, then an area may become
inadequate to support a viable population. This is especially the case for large mammals populations
like rhinos and elephants.
Figure 3: Rhino Conservation Areas in Leuser Ecosystem from TFCA (Tropical Forest Conservation Action)

In addition, Kappi is also the habitat of the other endangered species such as elephants, orangutans,
and tigers. The distribution of these critically endangered species could be seen in the Figure 2. Kappi is
also used by elephants as corridor for their movement and migrations. Therefore, physical intervention
such as the development of geothermal in this area could potentially disrupt the movement of this
umbrella species.
Figure 4: Critically Endangered Species Habitats Figure 5: Elephant Corridor, Conservation Areas and
Leuser National Park
3.2. High Conservation Value Area of Leuser Ecosystem

Kappi is a part of GLNP and Leuser ecosystem which is considered as an important part of Aceh large
natural landscapes with capacity to maintain natural ecological processes and dynamics according
to a study conducted by European Union. Intrusion into this area will result in disruption of its larger
landscape integrity. Even though only a small area will be changed for this geothermal development
(5,017 hectares), the potentially destructive impact to the whole bigger part of the Gunung Leuser
national park is high since the proposed area has the function of core conservation area.
The protection of large intact landscapes which have ecological integrity where the processes of natural
ecosystem have the ability to persist well into the future is very important. A key component of the
procedure is to recognize and protect the core areas of large landscapes, which are identified as interior
sections of remnant forest where natural ecological processes within remain undisturbed where it is
commonly associated with deforestation and fragmentation.
Core areas are identified as interior zones within the larger area, with more than 20,000 ha in size
surrounded by a forested buffer which has a minimum distance of 3 km from the edge of forest. Kappi
is identified as the core area of Leuser Ecosystem. Therefore, it is important that the GLNP management
authority has to guarantee that associated buffer zones and core areas are preserved and not fragmented
by non-forest conversion. This large natural landscape should be preserved to protect the ecosystems
natural diversity, as well as the natural biological and physical interactions among them and their
component species.

3.3. Leuser Park Protection of Conservation Area in Aceh and

Indonesian Spatial Plan
Gunung Leuser National Park is a protected conservation area designated as a national park and is thus
managed according to relevant Indonesian laws and institutions related to national parks. Protection
area are designated with the purpose of preserving specific landscape features such as ecological
functions, water resources, biodiversity, animals’ viable populations or a combination of features. These
areas are considered as HCV which aims to ensure that a conservation or protection area meets its
objective to be preserved. The conservation and protection areas of Aceh Province are regulated in Aceh
spatial plan issued by Qanun number 19 year 2013.
Figure 6: Aceh Spatial Plan

The other official government document that provide conservation and protection function was Ministry
of Environment and Forestry’s decree number 103 year 2015 about forest area and ocean conservation.
This forest area and ocean conservation of Ministry of Environment and Forestry can be seen in Figure 6.
To be utilized for geothermal development, firstly, the protection area status of Kappi should be removed
and turned into utilization area. Status and change of function should also change the related law and
regulations mentioned above.
Therefore, change of law and regulations procedure should be conducted. For example, the change of
status from protection to utilization area in spatial plan should follow spatial plan review mechanism
which could be done 5 years after it is approved. In addition, the approval of parliament is required in
order to change the Aceh spatial plan. Before change of status, studies should be conducted to make
sure that the core area function could be removed or not. Furthermore, the status of Kappi area as
conservation area is stated in National spatial plan in Law number 6 year 2007. Hence the change of the
status should also seek the approval of Indonesian national parliament.
Environmental impact assessment (AMDAL) should be conducted in the proposed area of geothermal
development according to Indonesia law and regulation. Before AMDAL can be conducted, the proposed
area should be cleared from protection and conservation status and the proposed area should have
principle license (izin prinsip) from the government.
Figure 7: Ministry of Environment and Forestry’s Forest Area and Marine Conservation Plan

Erosion and sedimentation have significant economic and ecological consequences at Aceh Province
landscape. Topsoil loss can be caused by surface erosion, which results in the productivity decrease of
the land. Morpho-erosion such as landslides or the ravines creation decreases the area of productive
land, costs economic infrastructure and rises the loads of sediment. Under natural conditions, soil
erosion rate is approximately equal to soil formation rate. In disturbed human factor environments,
erosion is accelerated and is extremely destructive, which has the consequence of high cost in time and
money to deal with it.
Among the main factors which cause erosion rates increase, those which can be fully managed by
humans are soil conservation practices and land cover changes. Forested land is much better than non-
forested land at decreasing erosion levels because of large part of the land is under a closed canopy,
the leaf litter on land surface and complex condition of understorey protecting the soil. Areas important
for erosion are forest or other areas where the surface risk of erosion is identified as very high. The
identification of this erosion potential area gives Aceh management authority the areas that must be
prioritized and protected with extreme caution to prevent erosion and sedimentation.
An erosion potential assessment is conducted using a modification of the Universal Soil Loss Equation
(USLE) formula as follows:
Erosion potential = R x K x LS x C x P
Where: LS = length of slope and slope factor.

R = rain erosivity factor, C = Vegetation and land cover index
K = soil erodibility P = Conservation practices
In the following analysis, P factor or Conservation practice was assumed at value 1 because of insufficient
of data availability.
Figure 8: Erosion Rate

According to the analysis, Gayo Lues district (Kappi is located in this district) has the highest number
of very high classification of erosion risk after Aceh Tengah with total area of 55,851 hectares. The
proposed geothermal project will add 5017 hectares of area to very high risk of erosion which will
potentially put Gayo Lues district as the highest district with high classification of erosion risk in Aceh
Province. Gayo Lues district has significant high classification area due to its high slope landscape
condition and sensitive soil type which cause high erodibility potential even though rain intensity is not
as high as western and southern parts of Aceh.
Kappi area which has high slope landscape, dense forest cover and sensitive soil type will be highly
vulnerable to erosion if this area was to be developed for geothermal construction, mainly due to the
forest cover clearance. Forest cover is an important factor to reduce erosion risk. Dense forest has
0.015 of vegetation and land cover index which is the highest index to prevent erosion. The change of
land cover from forest to others land use will significantly increase the risk of erosion.
3.4. Loss of Hydrological Functions

Loss of hydrological function is identified using the curve number method that is a versatile and widely
used procedure for the estimation of runoff. From the runoff resulted of spatial analysis, the volume of
the water could be determined therefore the changes in runoff volume in the span could be estimated
in time series needed. Based on the relationship of runoff characteristic which is the increasing volume
runoff from one period to another period influenced by the declining of infiltration capacity of land due to
the changes of land cover. The implication of this condition is the increasing risk of flood in rainy season
and drought in dry season.
Curve number method includes several important attributes of the watershed i.e. soils permeability,
antecedent soil water conditions and land use which are used in the analysis. Runoff curve number
method for direct runoff estimation from rainfall is well established in environmental impact analyses
and hydrologic engineering. Its popularity due to simplicity and responsiveness to the utilization of four
catchment attributes such as soil type, surface condition, land use/treatment, and antecedent condition.
The changes of cover in Kappi for geothermal development purpose will significantly increase the water
runoff in this area due to loss of hydrological function. The current condition of Kappi runoff potential
is low and infiltration rate high since it is covered with forest. The change of forest cover for geothermal
development will cause runoff potential to become high and infiltration rate low. The implication of an
area's hydrological function loss will be the increase of runoff volume during the rainy season which
could result in flooding. The area will also lose the capacity to conserve water which increases the
chance of drought risk during the dry season.

Figure 9: Loss of Hydrological Function Areas Due to Run Off Condition

4. Geothermal Development in Indonesia

Indonesian Law number 21/2014 specifies the new licenses required for geothermal activities that
separates it from mining activities. For electricity use, a Geothermal License (Izin Panas Bumi) will
be issued under the authority of the Central Government through the Ministry of Energy and Mineral
Resources.
4.1. Geothermal Development in Aceh

Currently in Aceh there are two Geothermal Business Concession Area (WKP) that have been established.
Jaboi and Seulawah Agam are the only two areas that can legally be developed for geothermal. Until the
Geothermal Business Concession Area is established, and then tendered, the regulation does not allow
any project developers to perform any exploration activities beyond initial survey. There are currently
three WKPs in Aceh that have already been issued and two of them have been awarded to the project
developers.
4.2. Geothermal Potential in Leuser

The latest published estimate on the geothermal potential was issued by PLN in 2016 in the electricity
supply business plan (RUPTL) 2016-2025. It only acknowledged one of the potential fields within the
Gayo Lues district. Gunung Kembar has a published estimate by PLN of approximately 92MWe but
the other geothermal potential locations total around 1.2GW are located outside of the National Park
boundaries.
Table 1: Geothermal Potential within Gayo Lues District
Gayo Lues District Geothermal Potential

Field name Potential Study Type
Dolok Perkirapan 25MW Speculative
Kembar Mountain 92MW Hypothesis
Kafi (Kappi) 25MW Speculative
TOTAL Potential within Leuser 142MW
Source: http://webmap.psdg.bgl.esdm.go.id
Figure 10: MEMR Estimate of Geothermal Potential within Leuser (Source: http://webmap.psdg.bgl.esdm.go.id)

With such a low potential of success in developing geothermal power within Leuser, other locations around
Aceh and outside GLNP are a much more attractive proposition. Especially when PLN’s projections of
the alternative locations within the Aceh province identifies over 1.2GW of geothermal potential.
4.3. Other Geothermal Potential in Aceh

Based on an older survey done by the Ministry of Energy and Mineral Resources, there are over 525MW
in potential geothermal fields outside of the Gayo Lues district. These fields are outside of protected
forest areas, and provide a much higher potential for success than the one proposed within Leuser.
Table 2: Geothermal Potential within Aceh
Other Aceh Geothermal Potential

District Name Total Potential
Aceh Tengah 300 MW
Bener Meriah 100 MW
Pidie 125 MW
TOTAL 525 MW
Source: http://webmap.psdg.bgl.esdm.go.id
Figure 11: MEMR Estimate of Geothermal Potential within Aceh (Source: http://webmap.psdg.bgl.esdm.go.id)
4.4. Geothermal Development Risks in Indonesia

The geothermal potential in Indonesia has been mapped by the Indonesian government in 2011 to be
over 29,000MW. But it is unclear how the estimates are derived. Without the basis for the estimates
made explicit, including assumptions to the technology pathway and exploration potentials, resource
estimates are of very limited value.
In 2010, Castlerock Consultants reassessed the more significant geothermal resources in Indonesian.
Of 51 Geothermal Business Areas examined, only 10 show no change, 20 show a decline, and 14 (27%
of the total number) show zero potential. The total potential of these fields is reduced from the initial
MEMR estimate of 4,554 MW to 2,774 MW (a 38% general reduction)

With the issuance of Ministry of Energy and Mineral Resources Regulation 12/2017, the threshold of
requirements to sign a PPA with PLN for geothermal power is significantly increased. Geothermal PPAs
can only be signed after the reserves are proven to exist and can support the electricity sale terms of
the PPA. Additionally, the PPA terms as regulated in another Ministry of Energy and Mineral Resources
Regulation 10/2017 dictate that geothermal power plant PPAs must be under a BOOT (Build, Own,
Operate, and Transfer) scheme.
In addition to estimates being overly optimistic by a significant amount, exploration of geothermal

resources carry a very high risk. A 2016 study from Stanford university estimates that the exploration
costs including test drilling range from US$13 million to US$28 million for a 50MWe geothermal resource.
Table 3: Project Development Approach for A 50Mwe Geothermal Resource after ESMAP (2012) and Deloitte (2008) with
Anticipated Costs
Project Costs
TASK ESMAP Deloitte This Paper
1 Preliminary Survey $ 2,000,000 $ 1,000,000 $ 2,000,000
2 Exploration $ 3,000,000 $ 8,000,000 $ 3,000,000
3 Test Drilling $ 18,000,000 $ 4,000,000 $ 23,200,000
4 Project Review & Planning $ 7,000,000 $ 7,000,000 $ 7,000,000
5 Filed Development $ 70,000,000 $ 37,000,000 $ 61,750,000
6 Construction $ 91,000,000 $ 91,000,000 $ 91,000,000
7 Startup & Commisioning $ 5,000,000 $ 5,000,000 $ 5,000,000
$ 196,000,000 $ 153,000,000 $ 192,950,000
Figure 12: Risk Curve for Geothermal Projects

(Source: https://pangea.stanford.edu/ERE/db/GeoConf/papers/SGW/2016/Nielson.pdf)

Developing a geothermal resource within the Gunung Leuser National Park has such a high cost of
exploration and a high risk of failure or significantly reduced realized potential. Comparing these risks
and costs with the significant value of Gunung Leuser National Park as a natural resource, especially in
its core conservation area, it is obvious that developing geothermal there has very little benefit but only
high environmental impacts.
5. Electricity Demand in the Aceh

The electricity grid system consists of the interconnection 150kV North Sumatra to Aceh transmission
line. Most of the electricity needed in Aceh comes from the 150kV transmission system rather than
electricity generated locally in Aceh. Only the northern shore is connected to this 150kV Northern
Sumatra Transmission Interconnection system. Most of Aceh’s electrical system still consists of the
20kV distribution grid system.
In 2016, Aceh’s power plant installed capacity is about 537MW including the 180MW Arun Peaker gas
plant. The Arun Peaker gas power plant is utilizing the remaining gas left from the Arun gas fields. It
has been reported that the Arun Peaker plant experience blackouts from time to time due to lack of gas
supply. With a peak load in 2016 for the whole province to be 494MW, the grid’s reserve margin is quite
limited. By 2025, PLN estimates that the peak load can reach 1,350MW based on an average economic
growth of 4.4%.
Figure 13: MEMR Estimate of Geothermal Potential within Aceh (PLN Electricity Supply Plan 2016-2025)

5.1. Electricity Demand in Gayo Lues District

The proposed geothermal resource would be within the Gayo Lues District with a population of about
88,000 people according to the 2015 census. This district is isolated from development in the region
due to its boundaries with protected forests. This include the construction of electricity connections to
PLN’s Northern Sumatra System.
PLN specifically mentioned that the district may not be connected to the main Northern Sumatra System
grid until 2026 or beyond. This means that there is still no possibility for the geothermal power plant
to sell its electricity beyond fulfilling the local electricity needs. Currently, the electrification ratio in this
district is over 95% and unless there is significant growth, local electricity demand is currently at 8.3MW.
The distance between the proposed geothermal development area within the Gunung Leuser National
Park and any potential electricity grid connecting to a larger demand system is quite far. To Blangkejeren
it is almost 25km straight line distance and to Blang Pidie it is over 50km straight line distance. These
distances are quite prohibitive for power plants due to the high cost of high voltage transmission lines
(150kV).
Figure 14: Distance from

Potential Geothermal
Site to the Nearest
Population Centers and
to 150Kv Substations

6. Other Renewable Energy Potential as Alternative

In addition to geothermal potential, the province of Aceh has other renewable energy sources that are
much more ready to be explored and implemented. Solar PV, hydro, bio energy, and wind are among
some of the more readily utilized sources of renewable energy. With the issuance of the Ministry of
Energy and Mineral Resources Regulation 12/2017, Aceh is one of the very few provinces that are still
attractive to developers.
This regulation provides a limit on most PPA tariffs for various renewable energy electricity purchases by
PLN. The limit is 85% from local electricity generation cost when it is higher than the national average
generation cost. According to PLN’s published generation cost from their audited report for the year
2015, Aceh has a generation cost of US$0.1418/kWh. This means that PPA tariffs for various renewable
energy projects in Indonesia is typically about US$0.12/kWh. For most technologies, this still provides
adequate margins for financial viability.
Figure 15: Electricity Generation Cost (PLN Audited Report 2015)
6.1. Solar PV Potential

Through an analysis using the RETScreen software, a pre-tax unleveraged IRR of a 22MW project
was calculated to be 15.9%. The parameters for this analysis is based on the capital and operational
expenses that are likely to be incurred for projects in the region. Larger projects (50MW and larger) can
take advantage of the economies of scale and lower its costs. It is expected that larger projects can
approach 20% pre-tax unleveraged IRR with a 15-20% reduction in capital expenses.

6.2. Hydro Power Potential

expenses that are likely to be incurred for projects in the region. In this case, the total project capital
expenses for the project is expected to be US$2.3 million. Larger projects (50MW and larger) can take
advantage of the economies of scale and lower its costs as well as increase its capacity factor. It is
expected that larger projects can approach 30% pre-tax unleveraged IRR with a 10% reduction in
capital expenses. In Aceh, a run-of-river hydro power types are much more suitable than a reservoir
type. Due to the abundance of existing natural resources, a lower impact run-of-river hydro projects
can support carbon reduction and climate change strategies without adding significant environmental
impacts.
6.3. Wind Power Potential

expenses that are likely to be incurred for projects in the region. Larger projects (50MW and larger) can
take advantage of the economies of scale and lower its costs. It is expected that larger projects can
approach 15% pre-tax unleveraged IRR with a 10% reduction in capital expenses.
7. Conclusion
Geothermal power development requires that the area be designated as a Geothermal Business Working
Area. There are also various environmental regulations that are quite rigorous issued by the Ministry
of Environment and Forestry that need to be met. Additional environmental and social assessments
are required with a much higher threshold of acceptance when borrowing money against the project.
Most project finance lenders require strict assessment requirements and often use the infamous IFC
requirements.
The difficulties of developing a geothermal power plant is further complicated with the high risks of
exploration. A typical 50MW geothermal power plant may cost between US$3 million to US$4 million per
MW for total project costs including exploration. The fixed costs of initial exploration surveys, feasibility
studies, project reviews, permits, and many other fixed costs can add up to over US$10million. With the
expected high project costs, even if the wells are producing and the capacity factor for the power plant
can reach over 80%, the risks of having a financially non profitable project are still high.
The fact that the proposed geothermal power plant is to be developed within the core zone of a protected
national forest/park will add more complexities, costs and time to the project development. The financial
viability of the geothermal power plant is further reduced by the fact that the largest estimate for the
resource potential is 140MW. The likelihood of the available geothermal potential to be proven at 140MW
is very small.
In the meantime, there are other alternative renewable energy power plant projects that provide a much
higher assurance of financial viability. The most promising of these technologies would be hydro power
plants. High potential capacity factor and a decent PPA feed in tariff allows this technology to achieve
pre-tax unleveraged IRR of over 27%. Other alternatives such as wind (13.1% IRR) and Solar PV (15.9%
IRR) are also feasible.

The proximity of the potential site locations for hydro, wind and solar PV to the 150kV transmission
line also provide the possibility that larger projects (>50MW) is possible with the alternative renewable
energy power plants. This will allow for a much higher revenue, lower costs, and these projects are
much easier to execute than geothermal inside of the core zone of a protected national forest.
It seems an easy choice to pick between developing geothermal projects inside of the core zone of a
protected national forest and other technologies that are proven and don’t rely on having to open access
to a UNESCO heritage site that also happens to be a protected forest in Indonesia.
There is no reason to develop a geothermal project in the Leuser National Park due to its environmental
impact alone. Loss of habitat, loss of catchment areas, and additional loss of trees are among the many
concerns if access to the core zone is opened. Renewable energy projects in Aceh should focus on
technologies such as hydro, Solar PV, or wind. Other technologies are also available depending on the
site location’s resources. Biomass and biogas, tidal and ocean current power, biofuel, and many others
are also highly feasible technologies.

Annex 1 – Geothermal Development in Indonesia

The issuance of the Geothermal license can only be obtained through the tender of the Geothermal
Business Area (WKP). The winner of the WKP can then be issued the Geothermal license required for
exploration and further development. Ministry of Energy and Mineral Resources issued a comprehensive
renewable energy regulation that include a feed in tariff for Geothermal PPAs with PLN.
MEMR regulation 12/2017 stipulates that if the local generation cost is higher than the national generation
cost then the tariff for the PLN electricity purchase from geothermal power plants is equal to the local
generation cost. But when the generation cost is equal to or below the national average, then a bilateral
agreement can be negotiated for the PPA tariff. In addition, geothermal power plant development and
PPA agreement since this regulation must be under the BOOT (Build, Own, Operate, Transfer) scheme.
Lastly, PLN is only allowed to purchase geothermal based electricity from developers who hold the
Geothermal Business Area license and have proven reserves after exploration.
Figure 16: Flowchart of Geothermal Development Process for Electricity

1.1 Geothermal Development in Aceh
Figure 17: Aceh Various Mining Concession Area for Geothermal (WKP)
Jaboi in Sabang belongs to PT Sabang Geothermal Energy and they have started drilling in February of
2017 for a 50MW geothermal power plant.
Figure 18: Jaboi Mining Concession Area for Geothermal
Pertamina Geothermal Energy holds the other Geothermal Business Concession Area (WKP). They
signed a Shareholders agreement with a local state owned company Perusahan Daearah Pembangunan
Aceh (PDPA/BUMD Aceh). The potential for this area is 160 MW.

Figure 19: Seulawah Agam Mining Concession Area for Geothermal
1.2 Geothermal Development Risks

In 2010, Castlerock Consultants reassessed the more significant geothermal resources in Indonesia.
From their analysis, some of the resource capacities were not only overestimated, but also tended to be
increased over time without new data or justification being available. (Ref: Castlerock Consulting, 2010.
Phase 1 Report: Review and analysis of prevailing geothermal policies, regulations and costs).
Of 51 Geothermal Business Areas examined, only 10 show no change, 20 show a decline, and 14 (27%
of the total number) show zero potential. The total potential of these fields is reduced from the initial
MEMR estimate of 4,554 MW to 2,774 MW. Any project developers who are expecting to develop
geothermal fields strictly based on the MEMR potential estimate should perform their own due diligence
before spending significant resources.
Table 4: Castlerock Reassessment of Geothermal Work Area Potentials
Castle- No Capacity Capacity No

GoI Change
rock Change Increase Decrease Potential
MWe MWe MWe [] [] [] []
1 Tangkuban Perahu 1, West Java 110 0 -110 1
2 Kamojang 5 & 6, West Java 100 60 -40 1
3 Ijen, East Java 110 0 -110 1
4 Iyang Argopuro,East Java 55 0 -55 1
5 Wilis/ Ngebel, East Java 165 39 -126 1
6 Rawa Dano (Kaldera Danau Banten) 110 217 107 1
7 Cibuni, West Java 10 59 49 1
8 Cisolok, Cisukarame, West Java 50 30 -20 1
9 Derajat, West Java 110 0 -110 1
10 Karaha Bodas,West Java 140 103 -37 1
11 Patuha, West Java 180 94 -86 1

Table 4 (Continued)
Castle- No Capacity Capacity No

GoI Change
rock Change Increase Decrease Potential
MWe MWe MWe [] [] [] []
12 Salak, West Java 40 0 -40 1
13 Tampomas, West Java 45 0 -45 1
14 Tangkuban Perahu 2, West Java 60 0 -60 1
15 Wayang Windu, West Java 240 180 -60 1
16 Baturaden, Central Java 220 0 -220 1
17 Dieng, Central Java 115 41 -74 1
18 Guci. Central Java 55 0 -55 1
19 Ungaran, Central Java 55 62 7 1
20 Seulawah Agam, North Sumatra 55 24 -31 1
21 Jaboi, North Sumatra 7 4 -3 1
Sarulla 1 (Namora I Langit), North
22 330 220 -110 1
Sumatra
23 Sarulla 2 (Silangkitang), North Sumatra 110 128 18 1
24 Sorik Marapi, North Sumatra 55 53 -2 1
25 Muaralaboh, West Sumatra 220 30 -190 1
26 Lumut Balai, South Sumatra 220 204 -16 1
27 Rantau Dadap, South Sumatra 220 172 -48 1
28 Rajabasa, South Sumatra 220 49 -171 1
29 Ulubelu 3 & 4, Lampung 110 146 36 1
30 Lahengdong 5 & 6, North Sulawesi 40 40 0 1
31 Bora, Central Sulawesi 5 0 -5 1
32 Merana, Masaingi, Central Sulawesi 20 0 -20 1
33 Hu’u, Sumbawa 20 20 0 1
34 Atadei, Lembata 5 5 0 1
35 Sokoria, Flores 5 5 0 1
36 Jailoho, North Maluku 10 10 0 1
37 Songa Wayaua, North Maluku 5 5 0 1
38 Sungai Penuh, Sumatra 110 66 -44 1
39 Hululais, Sumatra 110 137 27 1
40 Kotamubagu 1 & 2, Sulawesi 40 40 0 1
41 Kotamubagu 3 & 4, Sulawesi 40 34 -6 1
42 Sembalun, Flores 20 0 -20 1
43 Tulehu, Maluku 20 20 0 1
44 Suoh Sekincau, South Sumatra 230 219 -11 1
45 Sipoholon Ria, North Sumatra 75 0 -75 1
46 Bukit Kili, Sumatra 83 23 -60 1
47 Gunung Talang, Sumatra 36 0 -36 1
48 Suwawa, Sulawesi 110 14 -96 1
49 Bedugul, Bali 10 208 198 1
50 Ulumbu, Flores 10 10 0 1
51 Mataloko, Flores 3 3 0 1
Total 4,524 2,774 -1,750 10 7 20 14
GoI = Government of Indonesia, MWe= Megawatt electric
Source: Castlerock Consulting 2010. Phase 1 Report: Review and Analysis Prevailing Geothermal Policies, Regulations and Costs.
Jakarta: Ministry of Energy and Mineral Resources. Exhibit 4.1.

1.3 Geothermal Potential In Leuser

The geothermal development project proposed in Leuser is within the Gayo Lues district. Based on very
preliminary studies of Indonesia’s geothermal potential database published by the Ministry of Energy
and Mineral Resources’ Geological Studies, there are 3 geothermal potential locations within the Gayo
Lues District. The total hypothetical speculative potential as published by the Ministry of Energy and
Mineral Resources is about 140MW. Further studies need to be done to confirm the actual potential
reserve for the fields. These locations have not yet been designated as having a Geothermal Business
Area license to be tendered.
Figure 20: Aceh’s Potential Energy Map (PLN Electricity Supply Business Plan 2016-2025)
Referring to Castlerock’s study that evaluated the Indonesian government’s geothermal energy potential,
on average the estimates are too high by 38%. If this was to be applied to the geothermal potential
within the Gayo Lues district of 142MW, then the remaining potential is 89MW. In addition, Castlerock’s
study found that 27% of the locations studied across Indonesia has a likelihood of having zero value.
The study also found that the Indonesian geothermal potential locations have only a 14% chance to be
above the initial estimates. And the chance of the estimate to be below the initial value and even zero
is 67%.

Figure 21: Letter from the Governor of Aceh to Various Ministries in Jakarta
1.4 Geothermal Potential in Aceh Beyond Leuser

Aceh Tengah District by itself has over 300MW of estimated geothermal potential according to the
Indonesian government database. An additional 100MW of geothermal potential is also available located
within the adjacent district of Bener Meriah. The district of Pidie has a total geothermal power estimated
at 125MW. Most importantly none of the other geothermal fields are located within protected areas.
These other locations are well documented within the Ministry of Energy and Mineral Resources and can
be accessed publicly over the website of the geological division. While geothermal projects by nature
require a long project development phase, these other locations do not have the additional challenge
of having to open the access to a core zone area inside of an Indonesian national forest that has been
designated as a UNESCO World Heritage Site.
Additional geothermal resources have also been identified using newer data and more recent surveys.
These newer estimates have many other locations that are just as viable or more, with a higher potential.
Many of these other geothermal potential locations are also located in regions where it is much more
feasible due to the proximity to the Northern Sumatra Electricity Transmission System.

Figure 22: MEMR Estimate of Geothermal Potential within Aceh

(Source: http://www.modusaceh.co/)

Annex 2 – Aceh Electricity Demand

Aceh’s electrical system consists of the 150kV North Sumatra to Aceh transmission interconnection and
various isolated 20kV subsystems. There are also even smaller microgrids using low voltage systems and
distributed small power plants. Much of Aceh’s electricity is supplied through the 150kV transmission
interconnection covering Aceh’s eastern shores distributed through 10 substations. Aceh’s western
shores and central Aceh are still supplied with diesel power plants through 20kV isolated subsystems.
Through September of 2015, Aceh’s peak load reached 302MW with total generation capacity throughout
the province reaching 536MW. Having most of the generation capacity connected to the 150kV
transmission interconnection allows excess electricity to be exported to North Sumatra as needed.
Through 2025, it is expected that Aceh’s energy demand will be more than double to 5,719 GWh from
2,416 GWh in 2016. The peak load is also expected to increase to 977MW by 2025.
2.1 Gayo Lues District

The proposed geothermal field within the Gunung Leuser National Park is located within the Gayo Lues
district. Due to it's unique geographical situation, surrounded by protected and conservation forest, Gayo
Lues Regency became the most isolated district in Aceh. Access to Gayo Lues is only from Takengon
(north) and Kutacane (south), while the access from Lokop, Aceh Timur (north east) and Terangon (south
west) is still not reliable and much more difficult.
Four major rivers of Aceh start from the mountains in this district: Tamiang river; Alas-Singkil river; Tripa
river; and Jambo Aye river. Due to its situation on the highland and its mountainous landscape, Gayo
Lues also known as the Land of a Thousand Hills. Much of the Gayo Lues district, about 56.08 % of the
area, is located at an altitude of 1000-2000 meters above sea level (m asl), and 43.93% of its area is on
the slopes rated above 40% in the form of mountains.
Figure 23: Gayo Lues District in the Central Highlands of Aceh

2.1.1 Administrative and Demographic Aspects

Total area of the Gayo Lues District is 555 hectares consisting of 11 subdistricts, 25 settlements and 145
villages. The capital is Blangkejeren.
Figure 24: Administrative Map of Gayo Lues (source: BAPPEDA Gayo Lues)
Pining Subdistrict, has the biggest area (24%), while Putri Betung Subdistrict (where the Kappi
geothermal potential is located) has the second biggest area (18%). Pining Subdistrict is also where the
proposed large hydroelectric power plant is located (PLTA Tampur 428 MW).
Percentage area by subdistrict in Gayo Lues Regency:
Figure 25: Percentage Area by Subdistrict in Gayo Lues District (Source: BPS-Statistics of Gayo Lues)

The furthest subdistrict capital is Rerebe (capital of Tripe Jaya Subdistrict), as far as 55 km. While the
nearest one is Badak Bur Jumpe (capital of Dabun Gelang Subdistrict), 2 km from Blangkejeren. The
following scallable graph explain the distances of the subdistricts centres, perspective from Blangkejeren
as the district capital. It also reflects the situation of electricity grid installed by PLN in the area.
Figure 26: Distance from the District Capital by Subdistrict (Source: BPS-Statistics of Gayo Lues)
Estimated population of Gayo Lues Regency in mid-2015 (census) amounted to 87,881 people, made
up of 43,607 men and 44,274 women, with Blangkejeren as the most populated whith 26,990 of people.
Household estimates in mid 2015 as many as 21,603 households with an average member of the
household of 4 people.
Table 5: Population by Subdistrict in Gayo Lues District (2015)
Percentage of Population Density

Subdistrict Area (km2) Population
Total Population (Person/Km2)
1 Kuta Panjang 269,53 8,097 9.2 30.0
2 Blang Jerango 382,42 7,046 8.0 18.4
3 Blangkejeren 166,06 26,990 30.7 162.5
4 Putri Betung 996,86 7,297 8.3 7.3
5 Dabun Gelang 444,71 5,828 6.6 13.1
6 Blang Pegayon 272,18 5,634 6.4 20.7
7 Pining 1350,08 4,773 5.4 3.5
8 Rikit Gaib 264,08 4,169 4.7 15.8
9 Pantan Cuaca 295,07 3,844 4.4 13.0
10 Terangun 671,8 8,782 10.0 13.1
11 Tripe Jaya 437,13 5,421 6.2 12.4
Total 5 549.92 87,881 1000 100.0
Source: BPS-Statistics of Gayo Lues

The following table explains the growth of household number in the district. Since Gayo Lues is the
district with 99% electrification ratio, it also reflect the growth of PLN customers in the district.
Table 6: Number of Households in Gayo Lues Regency

Subdistrict Number of Number of Number of Estimated Estimated Rate of
Household Household Household of of Household
Household Household members
2011 2012 2013 2014 2015
1 Kuta Panjang 1,850 1,888 1,925 1,956 1,997 4.06

2 Blang Jerango 1,598 1,629 1,665 1,692 1,727 4.08
3 Blangkejeren 6,014 6,131 6,252 6,353 6,485 4.16
4 Putri Betung 1,703 1,735 1,773 1,802 1,839 3.97
5 Dabun Gelang 1,350 1,378 1,415 1,438 1,468 3.97
6 Blang Pegayon 1,209 1,235 1,268 1,288 1,315 4.28
7 Pining 1,084 1,106 1,129 1,147 1,171 4.07
8 Rikit Gaib 968 986 1,004 1,020 1,041 4.00
9 Pantan Cuaca 904 920 938 953 973 3.95
10 Terangun 2,009 2,042 2,084 2,118 2,162 4.06
11 Tripe Jaya 1,323 1,351 1,374 1,396 1,425 3.81
Total 20,012 20,401 20,872 21,163 21,603 4.07
Source: BPS-Statistics of Gayo Lues
2.1.2 Land Use and Production of Agricultural and Plantation

More than 85% of the area in Gayo Lues is forest (included protected forest, conservation forest, and
production forest). Due to its limited land-use for agriculture, livestock, and plantation, the communities
have been forced to optimize the land through intensification and diversification programs, to keep the
quantity and quality of the production.
Table 7: Land Use in Gayo Lues Regency
Land Use Area (Km2) Percent (%)

1 Protected Areas 3,953.54 76.73
a TNGL 2,035 36.34
b Forest Preserve 1,883.70 39.77
c Other Protected Area 34.46 0.61
2 Cultivation Area 1,596.37 23.27
a Production Forest 301.19 5.45
b Limited Production Forest 227.19 4.80
c Settlements 56.91 0.74
d Agriculture and Horticulture 40.37 3.83
e Transmigration 54.57 1.15
f Top Security Area and Airport 0.74 0.01
g Other Cultivation Area 904.9 7.29
Total 5,549.91 100
Source: BAPPEDA of Gayo Lues Regency

In Gayo Lues, Blangjerango Subdistrict has the highest paddy production, 14,211.6 ton. Blangkejeren
Subdistrict has the biggest paddy field area, 1,353 ha, while Dabun Gelang Subdistrict has the biggest
paddy productivity rate, 5.8 ton/ha. The following table shows all agricultural production in Gayo Lues. It
represent the volume of biomass potential in the region (paddy husk, coffee shell, leaves, etc).
Table 8: Agricultural Production in Gayo Lues
No Agriculture Area (Ha) Production (tons)
1 Paddy 14,380 67,886.90

2 Corn 2,762 14,729
3 Soya 15 13,4
4 Peanut 32 84
5 Cassava 18 400
6 Sweet potato 7 90
7 Long beans 19 38
8 Tomatoes 146 1,410
9 Large Chilli 512 6,240
10 Cayenne Pepper 350 3,420
11 Onion 246 1,225
12 Green beans 11 24
13 Egg plant 14 28
14 Cucumber 38 228
15 Durian 64 158
16 Pineapple 64 158
17 Banana 71 600
18 Orange 44 228
19 Papaya 8 40
20 Mango 25 200
Source: Agriculture, Livestock, and Fisheries Service of Gayo Lues Regency
In the plantation sector, lemongrass (serewangi), candlenut (kemiri), tobacco, cocoa, and coffee are the
main biomass contributor, as well as the most energy (firewood) absorber. The plantations are famous
for the high quality crops, and is the main GDP source for the region.

Table 9: Plantation Area and Total Production by Commodity
No Plantation Area (Ha) Production (Ton)

1 Rubber 155 17.50
2 Coconut 150 81.00
3 Coffee 1,961 1,488.50
4 Cocoa 3,088 1,185.60
5 Clove 0 4.00
6 Cane 125 37.40
7 Tobacco 620 1,948.00
8 Areca Nut 83 87.50
9 Candlenut 118 4,176.61
10 Sugar Palm 75 102.42
11 Patchouli 857 46.05
12 Lemongrass 14588 2,858.54
13 Ginger 143 261.00
Source: Forestry and Plantation Services of Gayo Lues
Furthermore, there are 216 lemongrass oil industry, 1,458 industrial mat, 231 industrial cakes, sugar red
industry 152, and 126 tailors using both bulk of firewood and electricity as the source of energy.
Supported by its hilly contours, with combination of many natural pine forest and wide pastures, the
cattle production of Gayo Lues has been successfully promoted, and it is now widely known for its
quality, both in Aceh as well as in the neighbouring provinces.
Farmers, especially the large-livestock farmers, release the cattle in the wide pasture in the morning,
and put it back in the cage/pen in the afternoon (It is called 'ngaro' in local terms). Several medium scale
cattle ranches are available for biogas development.
Table 10: Livestock Types in Gayo Lues
Type Number
1 Sheep 2,647
2 Goat 3,202
3 Cow 5,810
4 Buffalo 5,173
5 Horse 295
6 Broiler chiken 30,244
7 Local chiken 53,433
8 Duck 38,232
Source: Agriculture, Livestock, and Fisheries of Gayo Lues
It is important to notice that around two-thirds of Gayo Lues area are categorized as critical land
(potential, slightly, or extremely critical), both in the forest and outside forest area. With the biggest
'already potential critical' land is inside the forest area (almost 40% of of the district area). The promotion
of forestry-based biomass is challenging and need a comprehensive feasibility analysis. Total of Critical
Land Area Inside and Outside The Forest in Gayo Lues Regency is shown in the following table:

Table 11: Critical Land Area Inside and Outside Forested Area
In Forest Area Outside Forest Area

No Critical Class Land Total (Km2)
Area (Km2) Percent (%) Area (Km2) Percent (%)
1 Not Critical 1,835.42 33.07 15.42 0.28 1,850.84

2 Potential Critical 2,116.94 38.15 19.1 0.89 2,136.04
3 Slightly Critical 585.83 10.36 326.97 5.89 912.8
4 Critical 175.02 3.15 267.24 4.81 442.26
5 Extremely Critical 109.4 1.97 98.57 1.78 207.97
Total 5,549.91
Source: Agriculture, Livestock, and Fisheries Service of Gayo Lues Regency
2.2 PLN Branch in Gayo Lues District

For the district of Gayo Lues, PLN has set up a branch called Blangkejeren consisting of a diesel power
plant and a 20kV substation. Due to its extreme geographical situation, the electricity system in Gayo
Lues regency is completely separated from 'the high voltage interconnection (Sumbagut)' and other
Aceh districts.
PLN Blangkejeren branch is the main stakeholder in charge for the power system in the district, where
they manage the main grid (medium and low voltage) and series of diesel generators.The electrification
ratio in the regency is 99%.
The peak load is at 4.3 MW, and it is supplied by a 3 MW diesel generator (PLTD Rema) owned by an
Independent Power Producer, PT Bima Golden Powerindo, and a 2.4 MW diesel generator owned by
PLN itself. That means, in total there is a buffer or surplus of 1.1 MW electricity in the main grid.
Pertamina regularly transports the fuel from Lhokseumawe Fuel Station (Terminal Bahan Bakar Minyak)
to these generators.There are also several separated minigrids around the regency, mostly in the remote
villages, far from district capital. And all of those minigrid utilize microhydro as the electricity resources,
except one village (70 households) still using PV Home Systems.
PLTD Rema 3 MW is a power plant owned by PT Bima Golden Powerindo, an IPP with its niche in only
diesel power plant.
It is also worth considering, due to the change of supply system, most of diesel based IPP has been
shifted from the interconnection area (east coast and north area of Aceh) into the west, south, and
central of Aceh.
In Aceh, PT Bima Golden Powerindo right now also operates several other power plants:
• PLTD Setia Blang Pidie 5 MW
• PLTD Kuning Kutacane 2 MW
• PLTD Kota Fajar 5 MW
PLN Blangkejeren branch revenue in 2015 increased significantly compared to the previous year of 1,27
billion Rupiah. With the number of customers almost reaching 20,000 clients, excluded those 3,000
households in Putri Betung area.

Table 12: Total Electricity Consumption and Revenue
NO Consumer Costumer KWh Sold Revenue (IDR)

1 Social 538 146,012 63,678,548
2 Household 17,947 1,414,938 847,880,830
3 Business 422 134,235 168,913,363
4 Industry/Hotel 29 20,407 21,578,099
5 Government Building 162 50,360 63,615,535
6 Street-light 41 71,620 108,120,398
Total 19,139 1,837,572 1,273,786,773
Source: PT PLN (Persero) Branch Blangkejeren
Due to its demand growth in this region. PLN Aceh has already set several planning into the system. In
the future, it is expected the grid in the regency to be connected with interconnection system from 3
directions: Takengon, Kutacane, and Blang Pidie. A 174 kmc of 150 kV transmission line to be installed
from Takengon to Blangkejeren, started in 2017. Another 100 kmc of 150 kV transmission line also to be
installed from Kutacane to Blangkejeren in 2025. And another 148 kmc of 150 kV transmission line to
be installed from Blang Pidie to Blangkejeren also in 2025. Inside the current system, one substation of
150/20kV with capacity of 30 MVA/Bay is expected to be installed and operated this year (2017), with
possible scaling-up in 2025.
These developments will increase energy security and diversity in the region, by allowing electricity
supply from various new resources, among others:
 PLTA Peusangan I&II, 88 MW (COD 2018)  PLTA Kr Isep, 18 MW (COD 2019)
 PLTA Peusangan IV, 83MW (COD 2023)  PLTA Jambo Aye, 160 MW (COD 2025)
 PLTA Lawe Alas, 151 MW (COD 2025)  PLTA Tampur I&II, 428 MW (COD 2025)
Figure 27: Map of Electricity System and Power Plant Capacities in Aceh Province

2.3 Electricity Need in Gayo Lues District

Based on PLN data, Gayo Lues district’s electricity is served by PLN Blangkejeren branch with a diesel
power plant in Rema. This grid system is completely isolated from the main North Sumatra grid and
from other districts in Aceh. The total peak load of the district’s grid is 4.3MW supplied by a 3MW rental
diesel generator and a PLN owned 2.4MW diesel generator.
Figure 28: Diesel Power Plant Rema 3 MW in Blangkejeren
The rest of the population in the district is served by various minigrids utilizing microhydro power plants.
Mostly in even more remote areas, microhydro power provides a great solution for these communities.
Within the Gayo Lues district there are 16 microhydro power plants providing a total of 3.9MW of power.
What interesting is that half of these microhydro systems are in the Puri Betung Subdistrict. Here, there
is already 100% electrification ratio using microhydro power plants. This subdistrict is relevant because
the geothermal exploration area being proposed is within their boundary.
PLN, the community leaders and the local government work together to ensure that the microhydro power
plants are well managed and being maintained properly. There are regular technical training sessions
conducted by PLN branch at Blangkejeren to the microhydro technicians of the local cooperatives.
2.4 Use of Microhydro Power in Gayo Lues District

In 2002/2003, the electrification ratio in Gayo Lues was only 40%, and step by step by using microhydro,
it is already reaching 99%. Considering its constraints, it is one of the most successful districts in utilizing
hydro power. For this achievement, in 2012 the Government of Gayo Lues district was presented a
prestigious award, the 'Prabawa Energy' by the Ministry of Energy and Mineral Resources (ESDM),
represented by the Minister Mr. Ir. Jero Wacik, SE to the Regent Gayo Lues H. Ibn Hashim, S. Sos, MM
in Jakarta.

Figure 29: A Microhydro in Gayo Lues, PLTMH Rerebe
Some of the microhydro plants have been already standardized, connected, and synchronized into the
PLN grid in the region. It acts as PAD resources for the Gayo Lues Regency (estimation: 2 billion annually).
Some others are still independently managed by cooperatives in the villages, for both the technical
and financial aspects. PLN Blangkejeren branch regularly (3 monthly) provides technical training to the
technicians from cooperatives.
Abundance and cheap supplies of hydroelectricity in Gayo Lues villages result in energy utilizing
creativity. For example, in Rerebe, the farmers installed electricity element for heating in the patchouli
furnace, instead of using firewood.
Figure 30: Utilization of Electricity from Microhydro Power for Heating Patchouli Furnace in Rerebe
For the process of microhydro construction, the community needed 2 years to have each unit of
microhydro established. The first year is used for Detailed Engineering Design with budget from the
Gayo Lues Government, while the construction is executed in the second year. The current construction
funds are mainly provided by the Central Government using Special Autonomy Budget, and previously,
the fund came from the Tsunami Board, Aceh Reconstruction and Rehabilitation Boards (BRR).

The regency government plan to integrate all of microhydro systems, including its minigrid and
household consumers into PLN grid, in order to have a comprehensive organization and more regency
income (PAD). Furthermore, the utilization of geothermal in Kappi area is expected to add annual income
(both direct income and equalization fund) of 60 billion rupiah for the district government.
2.5 Summary
• The Gayo Lues Regency has 99% electricity ratio supplied by rented diesel generators, PLN
generators, solar PV, and microhydro.
• Peak demand is 4.3 MW, and maximum capacity installed is 5.4 MW, included 3 MW generated
by rented diesel generator. It is essential to find renewable alternative to replace this 3 MW.
• Several developments on electricity (power plant, transmission, substation) are already planned
for the region.
• Putri Betung Subdistrict, where the Kappi area is, has 100% electrification ratio, and it is 100%
supplied by microhydro.
• Abundant and cheap electricity from microhydro, has already begun to change the creativity of
electricity use, such as the utilization of electricity source (instead of firewood) for heating the
patchouli furnace (the first in Aceh).
2.6 Sources and References

• Interview with Head of Energy Department of Gayo Lues, Bpk Rasyidin Pohang, January 2017.
• Interview with the manager of PLN Blangkejeren branch, Bpk. Toni Setiawan, January 2017.
• Interview with Head of BAPPEDA Gayo Lues, Bpk Muhammad Ridwan.
• Interview with the manager of PLTMH Rerebe, Bpk Saidi Mustafa, January 2017.
• Data from PLN, Bappeda, BPS, Mining and Energy Service, Environment and Forestry Service,
and Agriculture Service
Table 13: Installed Microhydros
Installed
Max Power
Microhydros Capacity Location Villages serviced Note
(kW)
(kW)
PLTMH Rerebe 500 400 Rerebe Village, Rerebe Excess
(1998 dan 2000) Tripe Jaya Setu Power
Subdistrict Uyem Beriring
Buntul Musara
Kuala Jernih
Pantan Kela
Paya Kumer
Perlak
Pulo Gelime
PLTMH Ise-Ise 20 18 Ise-Ise Village, Ise-Ise Off-grid
(2000) Pantan Cuaca
Subdistrict
PLTMH Jamur 40 38 Jamur Gele Jamur Gele Off-grid
Gele I (2007) Village, Begade Empat
Putri Betung
Subdistrict

Table 13 (Continued)
Installed Max Power

Microhydros Location Villages serviced Note
Capacity (kW) (kW)
PLTMH Waih 400 380 Putri Betung Putri Betung Off-grid

Nuso (2008) Village, Gumpang
Putri Betung Gumpang Lempuh
Subdistrict Uning Pune
Ramung Musara
Pungke Jaya
PLTMH Marpunge 100 80 Marpunge Village, Marpunge Pintu Gayo Off-grid
(2008 dan 2012) Putri Betung Marpunge Gabungan
Subdistrict
PLTMH Tingkem 40 32 Tingkem Village, Tingkem Off-grid
(2009) Blang Jerango
Subdistrict
PLTMH Pepelah 40 32 Pepelah Village, Pepelah Off-grid
(2009) Pining Subdistrict
PLTMH Air Panas 100 80 Air Panas Village, Singah Mule Off-grid
(2010) Putri Betung
Subdistrict
PLTMH Kute 100 80 Kute Lengat Kute Lengat Sepakat Off-grid
Lengat (2011) Sepakat Village, Jeret Onom
Putri Betung
Subdistrict
PLTMH Waih 150 120 Waih Selah Excess
Selah (2012) Village, Power
Pantan Cuaca
Subdistrict
PLTMH Waih 500 400 Kute Lengat Excess
Marpunge (2013) Sepakat Village, Power
Putri Betung
Subdistrict
PLTMH Aih Kais 250 200 Putri Betung Meloak Sepakat Off-grid
(2013) Village, Meloak Aih Ilang
Putri Betung
Subdistrict
PLTMH Badak 60 50 Badak Uken Badak Proses
Uken (2014) Village, Sangir Excess
Dabun Gelang Power
Subdistrict
PLTMH Jamur 100 50 Putri Betung Off-grid
Gele II (2015) Subdistrict
PLTMH Nengar I 1000 800 Tripe Jaya Persiapan
(2015) Subdistrict Excess
Power
PLTMH Nengar II 500 400 Tripe Jaya Baru
(2016) Subdistrict selesai
dibangun
TA 2016
Total Daya 3900 3190
Source: Interview Pak Rasyidin Pohang (January 2017)

Annex 3 – Alternative Renewable Energy Technologies

Analysis
With solar PV panel costs decreasing sharply, utility scale solar PV projects can have a levelled cost of
energy below US$0.06/kWh even in Aceh. Many solar PV project developers can deliver utility scale
solar PV projects in regions similar to Aceh with a flat 25 year PPA tariff at US$0.12/kWh. This is below
Aceh’s average cost of electricity generation according to PLN’s audited financial report for 2015. Solar
PV PPAs at US$0.12/kWh in Aceh is very attractive to PLN and has a high likelihood to be accepted.
Hydro power plants also provide a great alternative to geothermal due to the mountainous geography
and various rivers throughout the province. In addition, due to the numerous protected forest areas
in Aceh, much of the catchment area is safe from development. Typical project costs for run of river
hydro power plants are between US$1.8 million to US$2.3 million per MW. With a 9% discount rate and
60% capacity factor, this means that a hydro power project has an LCOE between US$0.056/kWh to
US$0.071/kWh. With a maximum PPA tariff of US$0.12/kWh, there is sufficient margin for developers to
continue developing projects in Aceh.
There is only a small region in Northern Aceh near the city Banda Aceh where the wind potential is
sufficient for typical wind power projects. Fortunately, this region is near enough to Banda Aceh that it’s
very possible to have access to the 150kV transmission line that’s connected to PLN’s Northern Sumatra
Electricity System. Currently there are two large wind PPAs in Indonesia already signed and underway
for construction. Both PPAs were signed with generation tariffs well below Aceh’s threshold (as stated
in MEMR Regulation 12/2017) of US$0.12/kWh.
The three alternative renewable energy technologies were analyzed for financial feasibility by the latest
version of the industry standard software called RETScreen. To enable a fair comparison and easy to
understand analysis, the following assumptions were made:
• Unleveraged IRR calculation (100% equity)
• Electricity sale tariff equal to 85% of the region’s generation cost as reported by PLN in 2015
• Typical capital expenses and operation expenses for the technology localized to the Aceh
province
• Capacity factor for each technology is calculated using local conditions
• Similar power plant size (20-22MW) across the three technologies
It was found that with the abundance of high quality water resources in Aceh, hydro power plants are
the most financially beneficial with 27.2% IRR. They are dependent on the water flow and groundwater
availability. Hydro power plants are also risky to execute with a high risk of having cost overruns.
Wind power plants are also still quite feasible with 13% unleveraged IRR. Unfortunately, there is only
one highly feasible location based on the wind resource. This location is in the northern tip of Aceh, near
the city of Banda Aceh.
Solar PV power plants are also very feasible projects in Aceh. A typical unleveraged IRR of 15.9%
is easily achieved in the specific sites throughout Aceh with high irradiation. Of note is the locations
on the southern shores especially near Meulaboh. These areas are not yet connected to the 150kV
transmission lines and mostly have diesel power plants.

3.1 Solar PV Analysis

Aceh has quite a few locations throughout the province where the irradiation is high enough to make
utility scale projects financially viable. Both the northern and southern shores of Aceh provide many
locations with the Global Horizontal Irradiation above 1,800 kWh/m2 annually. The northern shore
locations already have a developed electricity grid system with 150kV lines connected to PLN’s Northern
Sumatra Transmission System.
Large utility scale power plants in the northern shores are the most attractive for project developers.
Its availability and connection to the Northern Sumatra Electrical Transmission System allows larger
projects at 50MW or larger. Connecting directly to the 150kV transmission system through the high
voltage substation allows large solar PV plants to be able to sell its electricity directly to the much larger
demand on the transmission system.
Figure 31: SolarGIS data – Global Horizontal Irradiation (Near Lhoksumawe)
Figure 32: SolarGIS data – Global Horizontal Irradiation (Near Meulaboh)

Power Plan
Photovoltaic
Photovoltaic
Capacity 22,000 kW
Electricity 35,449 MWh
Excutive Summary
This report was prepared using the RETScreen Clean Energy Management Software. The key findings
and recommendations of this analysis presented below:
Target
Electricity exported to grid Electricity exported revenue GHG emission reduction
MWh $ tCO2
Proposed case 37,584 4,510,066 28,360
The main result are as follows:

Cash flow - Comulative
100,000,000
80,000,000
Cumulative cash flows ($)
60,000,000
40,000,000
20,000,000
-20,000,000
-40,000,000
0 5 10 15 20 25
Year
Disclaimer: This report is distributed for informational purposes only and does not necessarily reflect the views of the government
of Canada nor constitute an endorsement of any commercial product or person. Neither Canada nor its ministers, officers,
employees or agents make any warranty in respect to this report or assumes any liability arising out of this report.

Location | Climate data

Location
Unit Climate data location Facility location
Name Indonesia - Meulaboh Indonesia - Aceh - Aceh Barat

o
Latitude N 4.1 4.2
o
Longitude E 96.1 96.1
Climate zone 1A - Very hot - Humid 1A - Very hot - Humid
Elevation m 841 24
GHG emission
GHG emission
40,000
35,000
30,000
GHG emission (tCO2)
25,000
20,000
15,000
10,000
5,000
0
Base case Proposed case
Gross annual GHG emission reduction (93%)

GHG equivalence
28,359,7 tCO2 is equivalent to 2,608.4

Hectares of forest absorbing carbon
GHG emission
Base case 30,494.3 tCO2
Proposed case 2,134.6 tCO2
Gross annual GHG emission reduction 28,359.7 tCO2
Financial viability
Financial parameters
Inflation rate % 0%
Project life yr 25
Cost | Saving | Revenue
Initial costs
Initial costs 100 % $ 22,000,000
Total initial costs 100 % $ 22,000,000
Annual costs and debt payments

O&M costs (savings) $ 550,000
Total annual costs $ 550,000
Annual saving and revenue

Electricity export revenue $ 4,127,687
Total Annual costs and debt payments $ 4,127,687
Financial viability
Pre-tax IRR - assets % 15.9%

Simple payback yr 6.1
Equity payback yr 6.1

Cash flow
Annual
10,000,000
5,000,000
-5,000,000
Pre-tax ($)
-10,000,000
-15,000,000
-20,000,000
-25,000,000
-30,000,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Year
Cumulative
cumulative
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
-10,000,000
-20,000,000
-30,000,000
-40,000,000
0 5 10 15 20 25
Year

Risk
Impact
Impact - Equity payback
Electricity export rate
Electricity exported to grid

Sorted by the Impact
Initial costs
Debt ratio
Debt term
Debt interest rate
O&M
-0.8 -0.6 -0.4 -0.2 0 -0.2 -0.4 -0.6 -08
Relative impact of parameter

(standard deviation)
Distribution
Distribution - Equity payback
10%
9%
8%
7%
Frequency
6%
5%
4%
3%
2%
1%
0%
1.8
1.9
2.1
2.2
2.4
2.5
2.6
2.8
2.9
3.1
3.2
3.4
3.5
3.6
3.8
3.9
4.1
4.2
4.4
4.5

3.2 Wind Power Analysis

While the wind potential for the province of Aceh is limited, there is one location that is very good. In
addition to having a good wind resource (average annual wind speeds of almost 7m/s), this location is
also very near to the city of Banda Aceh. Proximity to the city not only provide good access to high
electricity demand, but also a high possibility of being able to connect to the 150kV transmission system
serving the whole Northern Sumatra grid system.
Figure 33: DANIDA Wind Prospecting Database for Indonesia
Figure 34: 3TIER Global Wind Dataset 5km Resolution (Near Banda Aceh)
Power Plan
Wind turbine

Wind turbine
Capacity 22,000 kW
Excutive Summary
Target

MWh $ tCO2
Proposed case 50,563 5,056,272 38,153

250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
-50,000,000
-100,000,000
0 5 10 15 20 25 30
Year


Location
Name Indonesia - Banda Aceh Indonesia

o
Latitude N 5.6 5.6
o
Climate zone 0A - Extremely hot - Humid 1A - Extremely hot - Humid
Elevation m 172 311

GHG emission
GHG emission
60,000
50,000
GHG emission (tCO2)
40,000
30,000
20,000
10,000
0

GHG equivalence
38,153.1 tCO2 is equivalent to 3,509.1

GHG emission
Financial viability
Inflation rate % 0%
Project life yr 30
Initial costs
Initial costs 100 % $ 44,000,000


Financial viability
Pre-tax IRR - assets % 13.1%

Simple payback yr 7.4
Equity payback yr 7.4

Cash flow
Annual
20,000,000
10,000,000
-10,000,000
Pre-tax ($)
-20,000,000
-30,000,000
-40,000,000
-50,000,000
-60,000,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Year
Cumulative
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
-20,000,000
-40,000,000
-60,000,000
-80,000,000
0 5 10 15 20 25 30
Year

Risk
Impact

Initial costs
Debt term
Debt interest rate
O&M
Debt ratio
-0.8 -0.6 -0.4 -0.2 0 -0.2 -0.4 -0.6 -08

Distribution
12%
10%
8%
Frequency
6%
4%
2%
0%
5
5.4
5.9
6.4
6.8
7.3
7.7
8.2
8.6
9.1
9.5
10
.4
.9
.3
.8
.2
.7
.1
.6
10
10
11
11
12
12
13
13

3.3 Hydropower Analysis

Aceh has significant hydro potential due to its mountainous geography and the abundance of protected
forest as catchment areas. PLN recognizes this fact by identifying 18 large hydro potential sites and 68
mini hydro potential locations. In PLN’s electricity supply plan document, there is 1,784MW of hydro
power plants already identified to be built by 2025.
Some are in the planning stages but quite a few are already in construction and committed for
construction. These power plants are a mix of PLN owned and private developers as IPP arrangements
which 673MW are specified to be private IPP projects, 444MW are specified to be PLN owned projects
and the rest, 667MW are planned to be a future mix of private and PLN owned power plants.
Figure 35: PLN Estimates of Various Potential Energy Sources Around Indonesia

Power Plan
Hydro Power
Wind turbine
Capacity 20,000 kW
Excutive Summary
Target

MWh $ tCO2
Proposed case 105,120 10,512,000 79,320


250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
-50,000,000
-100,000,000
0 5 10 15 20 25 30
Year

Location

Name Indonesia - Banda Aceh Indonesia

o
Latitude N 5.2 5.6
o
Climate zone 0A - Very hot - Humid 1A - Very hot - Humid
Elevation m 4 17
GHG emission
GHG emission
120,000
100,000
GHG emission (tCO2)
80,000
60,000
40,000
20,000
0
GHG equivalence
79,320.4 tCO2 is equivalent to 7,295.4

GHG emission

Financial viability
Inflation rate % 0%
Project life yr 25
Initial costs
Initial costs 100 % $ 46,000,000


Financial viability
Pre-tax IRR - assets % 27,2%

Simple payback yr 3,7
Equity payback yr 3,7

Cash flow
Annual
30,000,000
20,000,000
10,000,000
-10,000,000
Pre-tax ($)
-20,000,000
-30,000,000
-40,000,000
-50,000,000
-60,000,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Year
Comulative
350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
-50,000,000
-100,000,000
0 5 10 15 20 25
Year

Risk
Impact

Initial costs
Debt ratio
Debt term
Debt interest rate
O&M
-0.8 -0.6 -0.4 -0.2 0 -0.2 -0.4 -0.6 -08

Distribution
9%
8%
7%
6%
Frequency
5%
4%
3%
2%
1%
0%
1.5
1.6
1.7
1.8
1.9
2
2.1
2.2
2.3
2.4
2.5
2.6
2.8
2.9
3
3.1
3.2
3.3
3.4
3.5

Support to Indonesia’s Climate Change Response
Implemented By: Contracts partners:
Deutsche Gessellschaft
für Internationale
Zussamenarbeit (GIZ) GmbH

01 - SICCR-TAC - Alternatives To Leuser Geothermal Development PDF

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

01 - SICCR-TAC - Alternatives To Leuser Geothermal Development PDF

Încărcat de

Drepturi de autor:

Formate disponibile

Support to Indonesia’s Climate Change Response

Technical Assistance Component (SICCR-TAC)

Alternatives to Leuser Geothermal

Banda Aceh Office:

Jakarta, March 2017

The European Commission is the EU’s executive body.

Implemented by: Consortium Partners:

3 Leuser National Park 3

4 Geothermal Development in Indonesia 12

5 Electricity Demand in the Aceh 15

6 Other Renewable Energy Potential as Alternative 17

Annex 1 – Geothermal Development in Indonesia 20

Annex 2 – Aceh Electricity Demand 27

Annex 3 – Alternative Renewable Energy Technologies Analysis 39

Alternatives to Leuser Geothermal Development iii

iv Alternatives to Leuser Geothermal Development

Alternatives to Leuser Geothermal Development v

Balai Besar Taman Nasional Gunung Leuser (Leuser Mountain National

GoA Government of Aceh

GoI Government of Indonesia

IRR Internal Rate of Return

MEMR Ministry of Energy and Mining Resources

PLN Perusahaan Listrik Negara (Indonesia’s Electricity Utility Company)

PPA Power Purchase Agreement

SICCR-TAC Support to Indonesia Climate Change Response

TNGL Taman Nasional Gunung Leuser (Leuser Mountain National Park)

UNESCO United Nations Educational, Scientific and Cultural Organization

WKP Wilayah Kerja Pertambangan (Mining Working Area)

vi Alternatives to Leuser Geothermal Development

Alternatives to Leuser Geothermal Development 1

Figure 1: Results of the Survey that Involved the Project Developer

2 Alternatives to Leuser Geothermal Development

3. Leuser National Park

Alternatives to Leuser Geothermal Development 3

Figure 2: Leuser Ecosystem Map and Wildlife Distribution

4 Alternatives to Leuser Geothermal Development

3.1. Critically Endangered Species Habitats in Leuser

Alternatives to Leuser Geothermal Development 5

3.2. High Conservation Value Area of Leuser Ecosystem

6 Alternatives to Leuser Geothermal Development

3.3. Leuser Park Protection of Conservation Area in Aceh and

Figure 6: Aceh Spatial Plan

Alternatives to Leuser Geothermal Development 7

8 Alternatives to Leuser Geothermal Development

Where: LS = length of slope and slope factor.

Figure 8: Erosion Rate

Alternatives to Leuser Geothermal Development 9

3.4. Loss of Hydrological Functions

10 Alternatives to Leuser Geothermal Development

Figure 9: Loss of Hydrological Function Areas Due to Run Off Condition

Alternatives to Leuser Geothermal Development 11

4. Geothermal Development in Indonesia

4.1. Geothermal Development in Aceh

4.2. Geothermal Potential in Leuser

Gayo Lues District Geothermal Potential

12 Alternatives to Leuser Geothermal Development

4.3. Other Geothermal Potential in Aceh

Table 2: Geothermal Potential within Aceh

Other Aceh Geothermal Potential

4.4. Geothermal Development Risks in Indonesia

Alternatives to Leuser Geothermal Development 13

In addition to estimates being overly optimistic by a significant amount, exploration of geothermal

Figure 12: Risk Curve for Geothermal Projects