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: o Technology in upstream development ~ higher risk o Regulatory framework ~ tender mechanism, tariff setting, site permits o Access to financing ~ upfront pre-development o 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? Geothermal Industry USAID 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 o 50 full time staff per 1,000MW* o Additional 300 geothermal engineers needed by 2021 o 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 expanding geothermal 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 Universities (ITB/USC) USAID Geothermal Industry Needs identification Locations for field trips, internships Employment for graduates Financial resources Program design expertise Access to US university/industry expertise Financial resources Curriculum/teaching Program implementation Technical expertise

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  Retno Setianingsih, Energy Specialist, rsetianingsih@usaid.govrsetianingsih@usaid.gov University of Southern California:  Fred Aminzadeh, Research Professor, fred.aminzadeh@usc.edu fred.aminzadeh@usc.edu Indonesian University - Institut Teknologi Bandung (ITB):  Nenny Miryani Saptadji, Head of Geothermal Graduate Program, nennys@tm.itb.ac.id nennys@tm.itb.ac.id Private Sector Support - Star Energy Ltd.:  Sanusi Satar, Senior Representative Management, s.satar@starenergy.co.id s.satar@starenergy.co.id TERIMA KASIH