Geothermal National Capacity Building : A Case Study of Industry Collaboration

1. Geothermal National Capacity Building : A Case Study of Industry Collaboration Mr. John Hansen Director, USAID Environment Office IIGCE 2014 June 5, 2014

2. Indonesia is at a crossroads in energy sector development...

3. On the one hand, demand for energy is growing rapidly… Limited access to modern energy is hampering access to prosperity-- electrification ratio in 2011 was at 73%*). GOI has set an ambitious target of increasing electrification ratio to 95% of the total number of house hold by year 2025. This will require an average of 1.3 million new connections annually. *) MEMR estimated figure in 2012 based on number of households electrified, including non-PLN consumers

4. Which is currently leading to an increased reliance on coal, gas, and renewable resources from oil… Energy and power supply dominated by fossil fuels (95% of total energy, 90% of electricity). Oil and natural gas (LNG) production are significant source of export earnings and foreign investment. Demand required to achieve projected GDP growth by 2030 may require a tripling or more of current production.

5. On the other hand, the GOI has set ambitious GHG mitigation goals…

6. In this environment, geothermal is a win-win • Current capacity ~ 1,200MW*) • Expected additional capacity in next 10 years ~ 6,300MW**) • Less than 3% of total potential But there are challenges: • Technology in upstream development ~ higher risk • Regulatory framework ~ tender mechanism, tariff setting, site permits • Access to financing ~ upfront pre-development • Adequate human resources capacity ~ engineers, earth scientists, operators, policymakers, etc. *) MEMR Statistics 2011 **) PLN Long Term Development Plan/RUPTL 2012-2021

7. Why a public-private partnership? • Uncertain regulatory environment • Exploration costs • Access to financing • Support transition to cleaner energy sector • Strengthen higher education, science, and technology • Significant US geothermal expertise Strengthen HR capacity of geothermal sector

8. Challenges in Human Resources Capacity Development • Quantity and Quality • 50 full time staff per 1,000MW* • Additional 300 geothermal engineers needed by 2021 • More so during development phase • Comparatively limited programs in Indonesian universities with respect to oil and gas exploration • In-house development by established geothermal companies (“existing pool”) • Limited number of experienced people ~ high movement from one company to others • Lack of research center with strong linkage to geothermal industry * estimation from Indonesia Geothermal Association and Ministry of Energy.

9. University Partnership on Geothermal Education Capacity Building (UP – Geothermal) • Implementing Partner: University of Southern California, with Bandung Institute of Technology and PT Star Energy • Period of Implementation: November 2011 – January 2015; • Objectives: • to build capacity for the geothermal educational program at ITB • to provide opportunities for US university to partner with Indonesian university in developing and expandinggeothermal education programs • direct industry input into education initiatives through private sector involvement

10. Activities to date Advisory Board Members: Dirjen EBTKE-ESDM, Star Energy, Pertamina Geothermal Energy, Indonesian Geothermal Association (“INAGA/API”), Chevron Geothermal Indonesia, Supreme Energy, Schlumberger, and Halliburton . Scholarship for Magister Geothermal Program at ITB: 20 students to date. Geothermal Seminars: Bandung, Padang (2012), Manado (2013), Surabaya, Aceh (2014) New Field Course: Geothermal Data Evaluation

11. Activities to date • Attendence of ITB faculty, staff and students in conferences, seminars, and workshops:API Renewable Energy Conference and Exhibition, GRC NZ Geothermal Workshop. • Training of Trainers: introduction to geothermal, detailed exploration for test site selection, environmental impacts & risk assessment, geothermal data evaluation

12. Each Partner Brings Different Resources • Curriculum/teaching • Program implementation • Technical expertise • Needs identification • Locations for field trips, internships • Employment for graduates • Financial resources • Program design expertise • Access to US university/industry expertise • Financial resources

13. Where Does the Partnership Go from Here? • UP has been a proof-of-concept • But the intersection between USAID’s and the industry’s interests are bigger than what’s been done thus far. • Summer 2014, INAGA, USAID, and the industry will be scoping out the next phase: • Including possibilities for non-degree training, training for regulators/financiers, research centers • We’re looking for partners!

14. For more information, please contact: USAID Indonesia: • Ashley King, Climate Integration Team Lead, aking@usaid.gov • RetnoSetianingsih, Energy Specialist,rsetianingsih@usaid.gov University of Southern California: • Fred Aminzadeh, Research Professor, fred.aminzadeh@usc.edu Indonesian University - InstitutTeknologi Bandung (ITB): • Nenny Miryani Saptadji, Head of Geothermal Graduate Program, nennys@tm.itb.ac.id Private Sector Support - Star Energy Ltd.: • SanusiSatar, Senior Representative Management, s.satar@starenergy.co.id TERIMA KASIH