Butuh USD 7 Miliar Demi Kapasitas Listrik 1,8 GW, PGE Mau Gandeng Danantara

Summary

In this discussion, Pertamina Geothermal Energy (PGE) addresses challenges related to regulatory frameworks and tariff caps impacting geothermal projects. Despite constraints like project lifecycle length and tariff limits, PGE remains confident in overcoming obstacles through cost-reduction strategies, technological advancements, and a strong resource base. The conversation also highlights the potential for collaboration with Danantara, exploring opportunities for capital injection and co-investment to expand geothermal capacity and international ventures. PGE's commitment to contributing to Indonesia's energy independence and the role of green energy in the country's future are key themes throughout the dialogue.

Takeaways

• 😀 The main challenge faced by Pertamina Geothermal (PGU) is regulatory constraints, particularly in tariff capping as defined by Presidential Regulation 112 of 2022.
• 😀 Despite the tariff cap, Pertamina Geothermal remains confident about its operations, aiming to reach performance targets through cost-reduction initiatives.
• 😀 PGU has a substantial resource base of up to 3.2 GW, with an installed capacity of 672 MW, allowing for better cost management and more competitive pricing from service providers.
• 😀 The implementation of binary technology in power plants has successfully reduced the cost of electricity generation from 5 million per MW to 3 million per MW, improving project commerciality.
• 😀 The government’s roadmap for renewable energy development until 2060 emphasizes a significant role for green energy, including geothermal, aiming for 440 GW or 76% of the energy mix from green sources.
• 😀 Indonesia's geothermal potential remains underutilized, with only 10-11% of the 24 GW capacity being used, providing considerable room for growth.
• 😀 The 90% capacity factor of geothermal plants in Indonesia makes them highly reliable, supporting the government's goal of achieving energy independence and self-sufficiency.
• 😀 PGU's strategic growth objective is to expand its capacity to 1,130 MW or a total of 1,800 MW by 2033, requiring an investment of 6 to 7 billion USD.
• 😀 Pertamina Geothermal's current capital structure includes 700 million USD in cash, 650 million USD in debt, and 2 billion USD in equity, with a gearing ratio of 0.4.
• 😀 The company is exploring innovative financing structures and potential partnerships with Danantara to access a broader pool of investors and secure the necessary capital for expansion projects, including acquisitions and new business ventures.

Q & A

What are the key challenges that Pertamina Geothermal (PGE) faces in 2024, according to the script?

PGE faces regulatory challenges, particularly related to tariff caps as set by government regulations. These challenges are compounded by long project lifecycles and the need to balance profitability while meeting regulatory constraints.

How does PGE plan to address the regulatory challenges related to tariff caps?

PGE aims to address these challenges by improving operational efficiency, particularly through cost reduction initiatives. These include utilizing a large resource base and applying advanced technologies like binary technology to lower costs per megawatt.

What role does the PLN (National Electricity Company) play in the tariff issues mentioned?

PLN is the primary off-taker of electricity from PGE's geothermal plants. The tariff cap is set in a way that allows PLN to sell electricity to end users at a sustainable price, factoring in the availability factor.

How does PGE plan to improve the commerciality of its projects despite the tariff cap?

PGE focuses on reducing the cost per megawatt through efficient resource utilization and advanced technology. For example, binary technology can help reduce costs from $5 million to $3 million per megawatt, thus improving the project's commercial viability.

What is the strategic significance of Indonesia’s geothermal resources, according to the script?

Indonesia has significant geothermal potential, with 24 GW of untapped resources, of which only about 10-11% (approximately 2.6 GW) is currently utilized. The country’s geothermal resources are expected to play a key role in achieving energy independence and contributing to the government’s green energy goals.

What is the government’s roadmap for renewable energy, including geothermal, according to the script?

The government’s strategic roadmap aims to achieve a 440 GW contribution from green energy sources by 2060, making up about 76% of the total energy mix. This supports the promotion of geothermal and other renewable energy sources as a key part of the energy transition.

How does PGE’s resource base contribute to their confidence in achieving their performance targets?

PGE is confident in its ability to meet performance targets due to its substantial resource base. With 672 MW of installed capacity and resources totaling 3.2 GW, PGE can optimize drilling and service agreements to reduce costs and increase the commerciality of its projects.

What financial strategy is PGE using to support its growth plans?

PGE's financial strategy involves securing approximately $6-7 billion in capital to expand its capacity. This is necessary for achieving a total capacity of 1,800 MW by 2033. Currently, they have a cash position of $700 million and debt of $650 million, with equity at $2 billion.

How does PGE plan to raise the additional funds required for its expansion?

PGE plans to raise additional funds through equity injections, potentially involving co-investment with strategic investors or funding from Danantara. They also see potential in innovative financing structures and entering new markets.

What is the potential involvement of Danantara in supporting PGE’s projects?

Danantara can support PGE in several ways, including providing capital injections or directly investing in projects. Danantara could also help through co-investment schemes, particularly for large-scale projects or acquisitions, where capital requirements are substantial.