Site Survey Assistance ServicesDRAFT FINAL REPORT Bengkulu (2x100 MW) CFSPP IPP Project

CHAPTER 1 EXECUTIVE SUMMARY

1.1. Background

Energy has an important role to support regional development, especially to support another side development. So, energy development target is supplying enough energy with affordable prices of people purchasing power.

Along with the growth of regional development, demand for energy especially electrical will continue to rise. Soo in a few years ago, with the transition process rural communities to urban communities will increasing energy needs. In addition, rural economy society will increasingly enhanced, so energy needs also increased.

In order to meet the electricity needs in a few area without electricity or area with power shortage, need to build power plan. New power plan that will be developed is Coal Fired Steam Power Plant (CFPP) IPP (Independent Power Producer) with capacity (2x100 MW) in Bengkulu.

Development plan Steam Power Plan IPP Bengkulu (2x100 MW) according to government policy, for diversification of energy which leads to use energy non oil, such as hydropower, coal, gas, geothermal and another energy sources. Connection with the development plan of Steam Power Plan, Daelim conduct Site Location on 3 location selected.

1.2. Intents and Purposes

Intents and purposes of Preparation of this report are:

1. Feasibility level of technical, economy, and environment aspect.

2. Institutional scheme that linkage or cooperation of government, PT PLN (Persero), ESDM ministry, IPP and other parties.

3. Project Scheme

4. Financing scheme for development IPP Steam Power Plan

5. Risks arising about that development IPP Steam Power Plan

1.3. Executive Summary

This executive summary is the summary from result of Site Survey Assistance Services which include legal and regulatory framework aspect, study of electrical system, coal supply considerations, technology, location identification.

According to UU No.15 Tahun 1985, PLN is a state-owned enterprises is shaped Persero as the only PKUK. Because of limited funding from government or from PT PLN (Persero), then the government has issued a policy to invite private companies (IPPs) in the supply of electric power. Basically the Public Private Partnership (PPP) is a Public Private Partnership in Infrastructure provision is made through a Cooperation Agreement or the provision of Concession Permit

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Site Survey Assistance ServicesDRAFT FINAL REPORT Bengkulu (2x100 MW) CFSPP IPP Project

between the Minister / Head of Institution / Regional Head of the Business Entity, which includes the construction work to build or improve infrastructure and / or activities infrastructure management and / or maintenance of infrastructure in order to improve the usefulness of infrastructure, also known as Public-Private Partnership (PPP).

Electrification project in Indonesia are generally arranged in Undang-undang no 30 tahun 2009 and Peraturan Pemerintah No 10 tahun 1989 that have been changed by Peraturan Pemerintah No 3 tahun 2005 and Peraturan Pemerintah No 26 tahun 2006, about supplying and using electric power. Electricity supply business to be done by the government and coordinated by state-owned electric companies (SOEs) designated by the Government Regulation as the Holder of Electricity Business Authority (PKUK) to conduct the business of supplying electricity for public use. PT PLN (Persero) was formed through Peraturan Pemerintah No 23 tahun 1994 about deformation from Perusahaan Umum Listrik Negara to PT PLN (Persero). PT PLN (Persero) under MINISTRY PKUK established as stipulated by Government Regulation. Private and Cooperative possible for Electricity Business Permit granted to the public interest (IUKU) are arranged in a ministerial decision. Electricity Business Permit for its own sake (IUKS) can only be given in an area of Business Holder of Electricity Business Authority or local Business Electricity Business Permit Holder for Public Interest, if the Holder of Electricity Business Permit or a General Electricity Business Permit Holder has not yet been able to provide electricity to the quality and reliability is good or not able to reach all its business areas. In November 2005, government issued a regulation about PPP that is Peraturan Presiden nomor 67 tahun 2005 that regulate the cooperation between government with private company for acceleration infrastructure development including power plant, transmission, and distribution. PT PLN (Persero) as PKUK allowed to cooperate with the Holder of Electricity Business Permit For the Public Interest (PIUKU) including the IPPs with the approval of the Ministry of Energy and Mineral Resources. Regulation of PPP in the PLN role as purchasers of electricity (off-taker) and PLN represent the government as PKUK making contracts with IPPs. In this IPP project, PLN is possible to ask for government support.

Electrical system in the mainland of Bengkulu province in late 2013 has about 123 MW peak load generation capabilities are very limited. Electrical system is supplied by several types of plants, namely hydropower, geothermal power plants and diesel are routed through the transmission system 70 kV and 150 kV substations with 23 (GI). Installed capacity of the entire GI is 675 MW.

Systems of Bengkulu which is projected to grow of electricity sales in the last 5 years was 12.3% per year, where sales in 2008 amounted of 342 GWh was increased to 568 GWh up to September 2013 to Bengkulu system has high growth potential, and to anticipate delays in completion of projects PLN / IPP.

According the information from the Ministry of Energy and Mines Resources, the energy sources available in Bengkulu to generate electrical energy consists of hydropower and geothermal with an estimated potential of 400 MW from hydropower and 500 MW from geothermal power plants. In addition there are coal deposit of 120 million tons.

Generation technology that best suits the conditions of 2x100 MW power plant is selected by reviewing the various aspects. For large-scale coal-fired units, there are two common types of combustion technology on the market, namely: circulating Fluidized Bed Boiler and Coal Boiler Pulveriser. With the characteristics of the coal sulfur content which medium, then the necessary attention to SO2 emissions. On the PC boiler SO2 emission reduction equipment required or Flue gas desulfurization (FGD), while in the CFB boiler limestone injection is required.

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Site Survey Assistance ServicesDRAFT FINAL REPORT Bengkulu (2x100 MW) CFSPP IPP Project

Selection criteria can be grouped into the bottom three main aspects:

1. The technical aspects

2. Environmental Aspects

3. socio-economic aspects

To select a location determined from the location of the possible, the technical aspects will be more dominant than the environmental aspects and socio-economic aspects. The dominance of the technical aspects indicate that the total cost of construction will be on the technical aspects although aspects of environmental and socio-economic need strong attention.

Alternative candidates for the power plant location Bengkulu (2x100 MW) spread 3 districts in Bengkulu, namely:

1. Bengkulu District, Alternative 1 (Suluk Sepang Vilage, Kampung Melayu Sub District );

2. Seluma District, Alternative 2 (Kungkai Baru Vilage, Air Periukan Sub District);

3. Seluma District, Alternative 3 (Pasar Seluma Vilage, Air Periukan Sub District);

Assessment of the three locations described in the table above :

Table 1 Assessment of the Three locations

Hasil dari pemilihan lokasi dari tiga alternatif, dapat dilihat pada tabel 1.1 bahwa alternative 1 merupakan lokasi terbaik untuk membangun PLTU Bengkulu (2x100 MW), hal tersebut dapat dilihat dari aspek technical dengan nilai 8.37, dari penilaian teknis lokasi alternatif 1 cukup dekat dengan rencana gardu induk yang akan di bangun yaitu Pulau Baai dengan jarak + 6.35 km. Aspek Environment dengan nilai 9.73, jarak dengan desa terdekat Suluk Sepang cukup jauh yaitu + 3.3 km. Aspek socio economic dengan nilai 8.73, lahan yang berada di alternatif 1 yaitu milik PT. Pelindo perusahaan BUMN, dan lahannya tidak produktif sangat bagus untuk membangun PLTU Bengkulu (2x100 MW).

The results of the selection of the location of the three alternatives, can be seen in Table 1.1 that alternative 1 is the best location to build Bengkulu (2x100 MW) CFSPP, it can be seen from the technical aspects of the value of 8.37, from the technical assessment of alternative locations 1 fairly close to the substation plan which will be built at a distance + 6,35 km that is Pulau Baai substation. Environment aspects with the value of 9.73, the distance to the nearest village of Suluk Sepang fairly away is + 3.3 km. Socio-economic aspects with the value of 8.73, which is in the field of alternative 1

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Site Survey Assistance ServicesDRAFT FINAL REPORT Bengkulu (2x100 MW) CFSPP IPP Project

is owned by PT. Pelindo state-owned companies, and the land is not productive, very good to build Bengkulu (2x100 MW) CFSPP.

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