Serabdi Sakti

Jakarta, August 2016

Energy Industry in Indonesia

&

World’s Renewable Energy

by :

Sando Sasako

Serabdi Sakti

Jakarta, August 2016

Energy Industry in Indonesia

&

World’s Renewable Energy

by :

Sando Sasako

Jakarta, 20 July 2016

Last update: 2016-08-25 03:03:22

This book is a part of an on-going research on energy business in Indonesia, including a near

exhaustive profile of renewable energy in the world and its increasing trends. This part will be

updated in a timely manner.

This book is available on a print-on-demand basis. The flash version is for demo purpose only and

available only to be served in Greater Jakarta, Indonesia.

You may reach the publisher for demo request, inquiries, and purchase order from this number:

+62 851 0518 7118 or +62 21 4027 8375.

Energy Industry in Indonesia & World's Renewable Energy – iii

Foreword in Coal Mining Business in Indonesia

Coal deposits all around the world may have been declining. It’s on the surface, but not in deep

underground. Extracting coal physically beneath the earth, majorly under the deep seabed, is not an

easy task to fulfill and complete. Some advantages may have come for digging coal out of the

underwater. Coal washing doesnot need special water resources and treatment, but from the sea or

ocean. Every thing must have a plus and a minus. It depends on what perspectives you’ve taken all

along.

The choice then lend it to the tasks of extracting the coal ores, that is the molecular carbons in gas,

namely CO, CH4, and H2. Syngas, they used to call it as the term. But not the CO2. CO2 is mostly

considered as the public enemy number one to be captured and imprisoned in a dungeon, deep

underground, for good. Various CO2 absorbents have been sought and developed, along with the

technologies to filter out the impurities embedded with coal, namely SOx and NOx.

Many have mixed up inappropriately the understandingness between coal gasification and coal

combustion. Even FoE. Those two coal treatments are different things. The first is heating the coal,

while the second is burning the coal. Both process involves massive thermal chain reactions. The

problems with UCG is that how can you guarantee that it is the coal seam and the intended ones that

has been gasified.

How about the walls, the roofs, the floors, and the layers buffering the coal seams? How about if the

words of collapse and/or cracks applied to those layers? Won’t they initiate a flow of the

unexpected such as a mud flow for example as in Porong, Sidoarjo, East Java, Indonesia, that hasn’t

stopped since it began to erupt on 29 May 2006.

Even worse is how the earth is burning the coal seams underground. Burning Mountain of Mount

Wingen in New South Wales has been burning for 6000 years, Brennender Berg in German since

1688, Smoking Hill in NW Canada since its discovery in 1826, Emalahleni in South Africa since

1953, and Centralia in Pennsylvania since 27 May 1962.

The list doesnot include the burning of methane in Derweze, Turkmenistan since 1971, known as

door to hell; Baba Gurgur oilfield nearby Kirkuk, Irak for 2500 years, known as eternal fire; Yanar

Dag near Baku, Azerbaijan since 1950s, known as land of fire.

The unanswered questions to protect the environment underground and the surrounding area has left

many UCG projects to be terminated, cancelled, withdrawn, neglected, abandoned, forbidden. They

are all due to lack of environmental protection technologies, and most of all understandingness how

to deal and cope it before hand.

Therefore, UCG is not an option to exploit coal deposits underground. At least for now, and some

decades to come.

Jakarta, 31 August 2016

Sando Sasako

Email: sandosako @ yahoo.com

Mobile: +62 812 8056 516

Energy Industry in Indonesia & World's Renewable Energy – v

Foreword in PT Borneo Lumbung Energi & Metal Tbk: On the Road to Recovery

In less than 2 months before Linc Energy Ltd filed for voluntary administration on 30 March 2016,

Linc Energy had signed an MOU with at least 2 Indonesian companies regarding the UCG projects

in Indonesia, that is 18 February 2016. However, on 23 May 2016, Linc Energy just had confirmed

its status as a liquidating company, but not its US subsidiaries as they had filed for relief and seek

bankruptcy protection (Chapter 11) on 29 May 2016.

The MOUs were the one of many heydays that UCG projects have been accepted worldwide as an

alternative to mine the primary energy coal in terms of syngas. Scotland, Australia, Vancouver, and

Nova Scotia were the few names that had been offering and approving coal companies to try and

implement the UCG technologies.

As coal companies can never be aware of what beneath the earth surface, they failed to convince

that they already have the required technologies and resources to protect the environment. They are

doomed to fail before it’s begun.

As a consequences, lenders and creditors participating as investors in the proposed UCG projects

surely stop funding and began to demand a payback. Even worst, they wanted to liquidate their

assets invested in the troubled coal companies.

Some companies may weather the storm and sail unscathedly. Some others may have to sink and

scuttle their ships to the bottom of ocean floor. Nevertheless, what may have saved the ships from

sinking is the captain and skipper of the ship. Should the captain know exactly the weights and

worth of the ship, the cargoes, and the crews, they shall bargain to salvage what’s worth saving.

Indeed, in the beginning, it hurts. A lot. To many parties. Corporate retrenchment, layoffs, shrinking

assets are some desperate measures to be taken in desperate times. These inevitable corporate

actions are unload some burdens in preserving cashflows and contain cash drains. Some assets are

indeed liabilities. Especially when the assets are failing to perform and generate revenues that

profitable enough to cover the incurred and embedded expenses.

Jakarta, 31 August 2016

Sando Sasako

Email: sandosako @ yahoo.com

Mobile: +62 812 8056 516

Energy Industry in Indonesia & World's Renewable Energy – vii

Contents

Foreword in Coal Mining Business in Indonesia ............................................................................ iii

Foreword in PT Borneo Lumbung Energi & Metal Tbk: On the Road to Recovery .......................... v

Contents ....................................................................................................................................... vii List of Tables .............................................................................................................................. xiii

List of Figures ............................................................................................................................... xv

Why do we need renewables? .......................................................................................................... 1

Lesser Lead Times ....................................................................................................................... 2 Higher Capital Recovery.............................................................................................................. 3

Increased Trends in Renewable Power Generation ....................................................................... 5 Shifting costs to use renewables ................................................................................................... 9

Share of Renewables Consumption ................................................................................................ 10

Total Energy Consumption ........................................................................................................ 12 Renewable Energy Applications ................................................................................................ 13

Renewables vs Non-Renewables ................................................................................................ 14 Why Liquid Fuels Matter ........................................................................................................... 16

Energy Industry Defined ............................................................................................................ 18 Forms of Energy ........................................................................................................................ 19

Investments in Renewables ........................................................................................................ 21 Capacity in Renewable Energy .................................................................................................. 23

Renewable Electricity ................................................................................................................ 24 Capacity in Renewable Electricity ............................................................................................. 28

Energy Technology Costs .............................................................................................................. 31

Supports to Renewable Energy Industry ........................................................................................ 35

Input and Output in Energy Industry .............................................................................................. 38

Global Trends in Energy Industry .................................................................................................. 44

The Saudi Factor........................................................................................................................ 44 The Revolutionary US Shale ...................................................................................................... 46

Primary Energy Consumption in the World ............................................................................... 48

Global Coal Trends........................................................................................................................ 51 Coal Price Dynamics in the World ............................................................................................. 52

Fracking Coalmines ................................................................................................................... 55 Coal Gasification ....................................................................................................................... 56

Underground Coal Gasification .............................................................................................. 59 Kincardine UCG, Scotland, UK ............................................................................................. 60

Raven and Hat Creek Coalfield, BC, Canada ......................................................................... 63

Global Warming or Global Heating ........................................................................................... 65 Greenhouse Gas ..................................................................................................................... 67

CO2 as One of GHGs ............................................................................................................ 69 Oxygen Carriers ..................................................................................................................... 70

CO2 Recovery ....................................................................................................................... 72

viii – Energy Industry in Indonesia & World's Renewable Energy

Underwater Coalmines............................................................................................................... 73

Hashima Coal Mine, Japan ..................................................................................................... 74 Okinoyama Coal Mine, Japan ................................................................................................ 75

Beizao Coal Mine, China ....................................................................................................... 75 Bomlo Coal Mine, Norway .................................................................................................... 77

Cape Breton Coal Mines, Nova Scotia, Canada ...................................................................... 79 Solway Coal Mines, Cumbria, UK ......................................................................................... 83

North Sea Coal Mines, NE England ....................................................................................... 84 Forth Coal Mines, Scotland, UK ............................................................................................ 85

The End of Deep Coal Mines in the UK ................................................................................. 86

Energy Business in Indonesia in a brief ......................................................................................... 89

Oil ............................................................................................................................................. 90 Oil Infrastructure ................................................................................................................... 91

Oil Production ....................................................................................................................... 92

Gas ............................................................................................................................................ 93 Chemical Characteristics of Gas............................................................................................. 96

Liquefied Natural Gas ............................................................................................................ 96 Liquefied Petroleum Gas...................................................................................................... 101

Coal-Bed Methane ................................................................................................................... 105

The Milestone of CBM Commercialisation .......................................................................... 107 CBM Asia @ Kutai West PSC ............................................................................................. 108

Dart Energy & IGas ............................................................................................................. 110 Dart Energy & NuEnergy ..................................................................................................... 111

Coal ......................................................................................................................................... 119

History of Coal Business in Indonesia .................................................................................. 124 Regulatory Frameworks ....................................................................................................... 127

The Dutch Colonialism .................................................................................................... 127 The Mining Law of 1967.................................................................................................. 127

The Production Sharing Contract in Coal Mining of 1975 ................................................ 129 The Coal Contract of Work of 1981 ................................................................................. 129

Forced Localisation .......................................................................................................... 130

Issues on Enviromental and Decentralisation ....................................................................... 132 Ministerial Regulations (Permen ESDM) ......................................................................... 133

Ministerial Decrees (Kepmen ESDM) .............................................................................. 135

Clean and Clear: The Causes ................................................................................................ 138 The Non-CNC Status ....................................................................................................... 140

Unclear DMO System ...................................................................................................... 143 Forestry Land Use Permit................................................................................................. 147

Korsup Minerba ............................................................................................................... 148

CCoW Companies: The First Generations ............................................................................ 151 BHP Kendilo Coal Indonesia ........................................................................................... 156

BHP Businesses in Indonesia ........................................................................................... 158 Rio Tinto.......................................................................................................................... 158

Tata Power ....................................................................................................................... 159

Energy Industry in Indonesia & World's Renewable Energy – ix

Arutmin Indonesia ........................................................................................................... 161

Kaltim Prima Coal ........................................................................................................... 161 Bumi Resources ............................................................................................................... 163

The IndoCoal Deals ..................................................................................................... 163

Borneo Lumbung Energi & Metal .................................................................................... 166 Has Samin Tan lost his bets in Bumi plc and BORN? ................................................... 166

The Company Named Borneo Lumbung Energi ........................................................... 167 The Road to Highly Indebted BORN ............................................................................ 169

The Awkward and Ugliness in 2011 ............................................................................. 172 The Teasing Dreams and Illusion of Interest in Bumi plc ............................................. 176

The $1b Debt Traps for Lending Stanchart and Borrowing BORN ............................... 178 The End of Bumi plc .................................................................................................... 180

Tony Blair .................................................................................................................... 181 REDD+ ........................................................................................................................ 182

Heart of Borneo ........................................................................................................... 183 Samin Tan .................................................................................................................... 184

Recapital Advisors ....................................................................................................... 185 Borneo Lumbung Energi and Energi Megah Persada .................................................... 186

Borneo Lumbung Energi & Metal: The Brief Profile ........................................................ 188

Shareholders ................................................................................................................ 188 Management ................................................................................................................ 189

Related Parties and Financial Transactions ................................................................... 190 Third Parties & Transaction Types ............................................................................... 192

IPO Proceeds ............................................................................................................... 194 Financials ..................................................................................................................... 195

Surviving on Debt Burdens, Theoretically .................................................................... 195 The Walk-Through ....................................................................................................... 198

The Road So Far .......................................................................................................... 199 Troubles with the Crown Jewel Holding the Bargain Chip ........................................... 200

Asmin Koalindo Tuhup .................................................................................................... 203

AKT in Brief, Legally .................................................................................................. 205 Concession Area .......................................................................................................... 206

Coal Deposits ............................................................................................................... 207 Mining Operations ....................................................................................................... 208

Production .................................................................................................................... 209 Product Specifications .................................................................................................. 210

Coal 101 ...................................................................................................................... 210 Coking Coal Grades ..................................................................................................... 212

Infrastructure................................................................................................................ 212 Transportation .............................................................................................................. 213

Marketing & Sales ....................................................................................................... 215 Customers .................................................................................................................... 215

Management ................................................................................................................ 216 Shareholders ................................................................................................................ 216

Financials ..................................................................................................................... 217

Allied Indo Coal .............................................................................................................. 219

References ................................................................................................................................... 221

x – Energy Industry in Indonesia & World's Renewable Energy

Directory of Coal Mining Companies in Indonesia ...................................................................... 225

Abadi Batubara Cemerlang .................................................................................................. 225 Abadi Coal Cemerlang ......................................................................................................... 225

Aceh Resources and Mineral ................................................................................................ 225 Aceh Resources and Mineral Core ....................................................................................... 225

Adaro Indonesia ................................................................................................................... 225 Adimas Baturaja Cemerlang ................................................................................................ 225

Allied Indo Coal , PT ........................................................................................................... 226 Andhika Mutiara Etam ......................................................................................................... 226

Andhika Mutiara Lestari ...................................................................................................... 226 Andhika Mutiara Sejahtera ................................................................................................... 226

Antang Gunung Meratus ...................................................................................................... 226 Anugerah Jatimulia .............................................................................................................. 227

Anugerah Jatimulya ............................................................................................................. 227 Arutmin Indonesia ............................................................................................................... 227

Asmin Bara Bronang............................................................................................................ 227 Asmin Bara Jaan .................................................................................................................. 227

Asmin Koalindo Tuhup ........................................................................................................ 227 Astaka Dodol ....................................................................................................................... 228

Bahari Cakrawala Sebuku .................................................................................................... 228 Bangun Banua Persada Kalimantan ...................................................................................... 228

Bara Mutiara Prima .............................................................................................................. 228 Bara Pramulya Abadi ........................................................................................................... 229

Bara Sentosa Lestari ............................................................................................................ 229 Bara Utama Unggul ............................................................................................................. 229

Baradinamika Mudasukses ................................................................................................... 229 Baramarta, PD ..................................................................................................................... 229

Baramarta ............................................................................................................................ 229 Baramulti Sukses Sarana ...................................................................................................... 230

Baramulti Suksessartana ...................................................................................................... 230 Baramutiara Prima ............................................................................................................... 230

Barasentosa Lestari .............................................................................................................. 230 Batu Alam Selaras ............................................................................................................... 230

Batubara Duaribu Abadi, PT ................................................................................................ 230 Batubara Selaras Sapta, PT .................................................................................................. 230

Baturona Adimulya .............................................................................................................. 231 Benakat Energi .................................................................................................................... 231

Benakat Energy.................................................................................................................... 231 Bentala Coal Mining ............................................................................................................ 231

Berau Coal ........................................................................................................................... 231 Bharinto Ekatama ................................................................................................................ 231

Bima Duta Batubara Sakti .................................................................................................... 232 Borneo Bhaktibara Utama .................................................................................................... 232

Borneo Indobara .................................................................................................................. 232 Buana Bara Utama ............................................................................................................... 232

Bukit Baiduri Enterprises ..................................................................................................... 232 Bukit Sunur.......................................................................................................................... 233

Bumi Laksana Perkasa ......................................................................................................... 233 Bumi Panen Sukses .............................................................................................................. 233

Bumi Sukse Mandiri ............................................................................................................ 233 Buntok Perdana Coal Mining ............................................................................................... 233

Calicari ................................................................................................................................ 233

Energy Industry in Indonesia & World's Renewable Energy – xi

Coal Duaribu Abadi ............................................................................................................. 233

Coal Selaras Sapta ............................................................................................................... 234 Danau Mas Hitam ................................................................................................................ 234

Daya Lapan ......................................................................................................................... 234 Delma Mining Corporation .................................................................................................. 234

Dhamar Tejokencono ........................................................................................................... 234 Dharma Puspita Mining ....................................................................................................... 234

Dutaputra Tanaratama .......................................................................................................... 235 Ekasatya Yanatama .............................................................................................................. 235

Energi Batubara Sumatera .................................................................................................... 235 Energy Batubara Sumatra .................................................................................................... 235

Fajar Bumi Sakti .................................................................................................................. 235 Firman Ketaun Perkasa ........................................................................................................ 235

Galicari ................................................................................................................................ 235 General Sakti Kreasindo ...................................................................................................... 236

Generalindo Prima Coal ....................................................................................................... 236 Gunung Bayan Pratama ....................................................................................................... 236

Gunung Bayan Pratama Coal ............................................................................................... 236 Hulubalang Inti Bumi .......................................................................................................... 236

Indexim Coalindo ................................................................................................................ 236 Indominco Mandiri .............................................................................................................. 237

Insani Bara Perkasa .............................................................................................................. 237 Interex Sacra Raya ............................................................................................................... 237

Intitirta Prima Sakti .............................................................................................................. 237 Intitirta Primasakti ............................................................................................................... 238

Jorong Barutama Greston ..................................................................................................... 238 Juloi Coal ............................................................................................................................ 238

Kadya Caraka Mulia ............................................................................................................ 238 Kalimantan Energi Lestari ................................................................................................... 238

Kalteng Coal ........................................................................................................................ 239 Kaltim Prima Coal ............................................................................................................... 239

Kartika Selabumi Mining ..................................................................................................... 239 Karunia Poladaya Bumi ....................................................................................................... 239

Karya Bumi Baratama.......................................................................................................... 239 Kendilo Coal Indonesia ........................................................................................................ 240

BHP Kendilo Coal Indonesia ............................................................................................... 240 Kideco Jaya Agung .............................................................................................................. 240

Kitadin ................................................................................................................................. 240 Kodeco Horna Mandiri ........................................................................................................ 240

Kurnia Sarana Lestari .......................................................................................................... 240 Kutai Kertanegara Prima Coal ............................................................................................. 240

Lahai Coal ........................................................................................................................... 241 Lanna Harita Indonesia ........................................................................................................ 241

Lianganggang Cemerlang .................................................................................................... 241 Mahakam Sumber Jaya ........................................................................................................ 241

Mandiri Intiperkasa .............................................................................................................. 241 Mantimin Coal Mining ........................................................................................................ 242

Marunda Graha Mineral ....................................................................................................... 242 Marunda Grahamineral ........................................................................................................ 242

Maruwai Coal ...................................................................................................................... 242 Maruai Coal ......................................................................................................................... 242

Meulaboh Energitama .......................................................................................................... 242

xii – Energy Industry in Indonesia & World's Renewable Energy

Meullaboho Energitama ....................................................................................................... 243

Mitrajaya Timuragung ......................................................................................................... 243 Multi Harapan Utama .......................................................................................................... 243

Multi Tambangjaya Utama ................................................................................................... 243 Nusa Minera Utama ............................................................................................................. 243

Nusantara Termal Coal (D/A Nusantara Thai Coal) ............................................................. 244 Nusantara Thai Coal ............................................................................................................ 244

Pari Coal .............................................................................................................................. 244 Pendopo Energi Coal ........................................................................................................... 244

Pendopo Energy Batubara .................................................................................................... 244 Perkasa Inakakerta ............................................................................................................... 244

Persada Permata Mulya ........................................................................................................ 245 Persada Permata Mulia......................................................................................................... 245

Pesona Khatulistiwa Nusantara ............................................................................................ 245 Pinang Jaya Sarana Bara ...................................................................................................... 245

Pinangjaya Sarana Bara ....................................................................................................... 245 Ramdany Coal Mining ......................................................................................................... 245

Ratah Coal ........................................................................................................................... 245 Restubara Karya Pratama ..................................................................................................... 246

Riau Bara Harum ................................................................................................................. 246 Salamindo Coalindo ............................................................................................................. 246

Salamindo Pahala................................................................................................................. 246 Santan Coal.......................................................................................................................... 246

Santan Batubara ................................................................................................................... 246 Sarwa Sembada Karya Bumi ................................................................................................ 246

Selatan Selabara ................................................................................................................... 247 Selo Argodedali ................................................................................................................... 247

Selo Argokencono Sakti ....................................................................................................... 247 Senamas Energindo Mulya ................................................................................................... 247

Senamas Energindo Mulia ................................................................................................... 247 Sinar Benua Prima ............................................................................................................... 248

Sinarindo Barakarya............................................................................................................. 248 Singlurus Pratama ................................................................................................................ 248

Solok Bara Adipratama ........................................................................................................ 248 Sumber Barito Coal ............................................................................................................. 248

Sumber Kurnia Buana .......................................................................................................... 249 Suprabari Mapanindo Mineral .............................................................................................. 249

Tambang Damai .................................................................................................................. 249 Tanito Harum....................................................................................................................... 249

Tanjung Alam Jaya .............................................................................................................. 250 Tanjung Alam Raya ............................................................................................................. 250

Taraco Mining ..................................................................................................................... 250 Teguh Persada Coal ............................................................................................................. 250

Teguh Reksa Daya ............................................................................................................... 250 Teguh Sinar Abadi ............................................................................................................... 250

Tempayang Cemerlang ........................................................................................................ 251 Timah Batubara Utama ........................................................................................................ 251

Torah Antareja Mining......................................................................................................... 251 Trimarta Coal Perkasa .......................................................................................................... 251

Trimata Buana ..................................................................................................................... 251 Trimata Benua ..................................................................................................................... 251

Trimata Coal Perkasa ........................................................................................................... 252

Energy Industry in Indonesia & World's Renewable Energy – xiii

Trubaindo Coal Mining ........................................................................................................ 252

Wadung Mas Tambang Mulia .............................................................................................. 252 Wadungmas Tambang Mulia ............................................................................................... 252

Wahana Baratama Mining .................................................................................................... 252 Whirakaneo Coalindo .......................................................................................................... 252

Whiratama Bina Perkasa ...................................................................................................... 252 Yamabhumi Palaka .............................................................................................................. 253

List of Tables

Table 1 – World primary energy demand by fuel and scenario (Mtoe) ........................................... 10

Table 2 – World renewables consumption by scenario ................................................................... 11 Table 3 – Share of global final energy consumption by end-use, 2014 ........................................... 13

Table 4 – Distributed renewable energy for productive energy services and economic

development ........................................................................................................... 14

Table 5 – Energy characteristics of energy-intensive industries, 2013 ............................................ 19 Table 6 – Forms of energy ............................................................................................................. 19

Table 7 – Energy units with conversion factors and energy equivalents ......................................... 20 Table 8 – Energy conversion efficiencies ....................................................................................... 21

Table 9 – Global trends in renewable energy new investment by technology, 2004-2014 (US$

bn) .......................................................................................................................... 21

Table 10 – Renewable energy indicator, 2014 ................................................................................ 22 Table 11 – Global trends in renewable energy new investment by stage, 2004-2014 (US$ bn) ....... 23

Table 12 – Global renewable energy capacity and biofuel production, 2014 .................................. 23 Table 13 – Top-5 countries in annual investment / net capacity additions / production, 2014 ......... 24

Table 14 – World electricity generation by source and scenario (TWh).......................................... 25 Table 15 – Power system flexibility options and characteristics ..................................................... 27

Table 16 – Renewable electric power global capacity, top regions/countries, 2014 (GW) .............. 29 Table 17 – Top-5 countries in total capacity or generation as of end-2014 ..................................... 30

Table 18 – Status of renewable technologies: characteristics and costs in power generation

and hot water/heating/cooling ................................................................................. 33

Table 19 – Status of renewable technologies: characteristics and costs: Distributed renewable

energy in developing countries ................................................................................ 34

Table 20 – Status of renewable technologies: characteristics and costs: Transport fuels ................. 35 Table 21 – Relevant comparisons for evaluating competitiveness of renewable energy

technologies by scale and role played ...................................................................... 36 Table 22 – Primary Energy Consumption in the World by Countries, 2005-2015 (mtoe) ............... 48

Table 23 – Primary Energy: Consumption in the World by Countries and by Fuel Type, 2014

(mtoe) ..................................................................................................................... 49

Table 24 – Primary Energy: Consumption in the World by Countries and by Fuel Type, 2015

(mtoe) ..................................................................................................................... 50

Table 25 – BP coal prices, 1987-2015 ($/tonne) ............................................................................. 52 Table 26 – US coal export price, 2010q1-2016q1 ($/short tons) ..................................................... 52

Table 27 – Coal In-Place Resources for Upper Limestone Fm + Limestone Coal Fm,

Kincardine, Nov.2014 ............................................................................................. 61

Table 28 – Coal In-Place Resources for Upper Limestone Fm, Kincardine, Nov.2014 ................... 61 Table 29 – Coal In-Place Resources for Limestone Coal Fm, Kincardine, Nov.2014 ..................... 61

Table 30 – Coal In-Place Resources, Kincardine, Nov.2014 .......................................................... 62 Table 31 – Estimates of trace chemicals abundance in the global atmosphere, 1980. ...................... 69

Table 32 – Overview of existing chemical-looping combustors ..................................................... 72 Table 33 – Some undersea coalmines in Solway Firth, Cumbria, UK ............................................. 83

xiv – Energy Industry in Indonesia & World's Renewable Energy

Table 34 – Oil refineries in Indonesia, 2014 ................................................................................... 91

Table 35 – Crude oil supply and demand in Indonesia, 2000-2014 ................................................. 93 Table 36 – Crude oil refinery production in Indonesia, 2000-2014 ................................................. 93

Table 37 – Natural gas production in Indonesia, 2000-2014 ........................................................... 94 Table 38 – LNG Plants in Indonesia .............................................................................................. 97

Table 39 – Regasification terminals in Indonesia, existing and planned, 2014 ................................ 98 Table 40 – LPG supply and sales in Indonesia, 2000-2014 ........................................................... 101

Table 41 – CBM Resources in Indonesia ..................................................................................... 105 Table 42 – The 20 largest shareholders of Dart Energy Limited, 20100914 .................................. 110

Table 43 – Some subsidiaries of IGas which were held through subsidiaries, 30 June 2015 ......... 111 Table 44 – Coal reserves in Indonesia, 2014 ................................................................................ 120

Table 45 – Coal supply in Indonesia, 2000-2014 .......................................................................... 121 Table 46 – Existing coal terminals in Indonesia ........................................................................... 122

Table 47 – Coal mining companies in Indonesia by permits, March 2015 .................................... 124 Table 48 – CNC status of IUP by announcements, 20110630-20160104 ...................................... 139

Table 49 – Problems of Non-CNC IUPs by category and regions, 20140203 ............................... 140 Table 50 – Clean and Clear IUPs by province, 2014 – April 2016 ................................................ 142

Table 51 – Coal Domestic Market Obligations in Indonesia, 2010-2015 ...................................... 143 Table 52 – Coal Domestic Market Obligations in Indonesia, by CCoW and KP/IUP

companies, 20100419-20150427 (mt) ................................................................... 145 Table 53 – Overlay of IUP, COW, and PKP2B with Forest Area Map and IPPKH....................... 147

Table 54 – IUP within conservation forests in 12 provinces, 2014-2015 ...................................... 147 Table 55 – The First Generation CCoW Companies: The dates, area, and resources/reserves ....... 151

Table 56 – The second generation of CCoW Companies: 17 of 19 ............................................... 151 Table 57 – Coal produced from Kalimantan, 1997-2000 (1000 ton) ............................................. 152

Table 58 – The third generation of CCoW Companies: 106 of 114 .............................................. 153 Table 59 – Coal production from CCoW companies, 2005-2012 (1,000 ton) ............................... 155

Table 60 – Financial profile of 3 direct subsidiaries of Tata Power on coal business in

Indonesia, 2015q1 (₹ crore)................................................................................... 159

Table 61 – Subsidiaries of Tata Power related with coal mining business in Indonesia, 2015q1

(₹ crore) ................................................................................................................ 159

Table 62 – Tata Power companies in Indonesia, 2015 .................................................................. 160 Table 63 – The most vital financial figures of PT Borneo Lumbung Energi & Metal Tbk,

2006-2014q3 ......................................................................................................... 169 Table 64 – BORN’s debts by signing dates and terms, 2005-2010 ............................................... 171

Table 65 – BORN’s loans, 2007q4 -2012q1 ................................................................................. 172 Table 66 – Underwriters at BORN’s IPO ..................................................................................... 173

Table 67 – Corporate actions of Bakrie & Brothers regarding Bumi plc and BORN, late 2011 ..... 174 Table 68 – BORN’s IPO proceeds: Planned vs Reported in 2012 Annual Report (IDR mn) ......... 174

Table 69 – Subsidiaries of Bumi plc, June 2012 ........................................................................... 177 Table 70 – ARMS company financials, 2011-2014 £(M) ............................................................. 181

Table 71 – BORN’s Shareholders, March 2006 – Sept. 2014 (shares) .......................................... 188 Table 72 – Trading suspension dates of BORN’s stock in IDX, 20130701-20160801 .................. 188

Table 73 – BORN’s Board of Commissioners, Dec. 2007 – Sept. 2014 ........................................ 189 Table 74 – BORN’s Board of Directors, Dec. 2007 – Sept. 2014 ................................................. 189

Table 75 – Corporate Officers in BORN group of companies, 2010 ............................................. 190 Table 76 – Related companies of BORN and transaction types, 2011-201409 (US$) ................... 190

Table 77 – Related companies of BORN and transaction types, 2007-2011 (IDR mn).................. 192 Table 78 – Third parties of BORN ............................................................................................... 192

Table 79 – BORN’s IPO underwriting fees detailed ..................................................................... 194 Table 80 – BORN’s IPO proceeds: Planned vs Reported in 2012 Annual Report (IDR mn) ......... 194

Table 81 – BORN’s outstanding loans, 20100630 ........................................................................ 195

Energy Industry in Indonesia & World's Renewable Energy – xv

Table 82 – The most vital financial figures of PT Borneo Lumbung Energi & Metal Tbk,

2006-2014q3 ......................................................................................................... 195 Table 83 – The financial structure of BORN (share of liabilities components to assets), 2009-

2014q3 .................................................................................................................. 196 Table 84 – Coal mineable reserves of BORN, March 2013 (mt)................................................... 207

Table 85 – Coal resources of BORN, March 2013 (mt) ................................................................ 207 Table 86 – BORN’s coal deposits in Kohong and Telakong blocks, 30 June 2010 (mt) ................ 207

Table 87 – BORN’s performance in coal productions, sales, and price, 2007-2013 ...................... 209 Table 88 – Tuhup coal product specification, 30 June 2010 ......................................................... 210

Table 89 – Grades of coking coal ................................................................................................. 212 Table 90 – Utilisation of installed capacity of BORN, 2007-2010H1 ........................................... 213

Table 91 – Third parties contracted in relation to barging and loading in ISP ............................... 214 Table 92 – Coal sales by marketers, 2011-2012 ($) ...................................................................... 215

Table 93 – BORN sales by country, 2009-2013 ........................................................................... 216 Table 94 – Management Boards of Asmindo Koalindo Tuhup, 1 Sept. 2010 ................................ 216

Table 95 – Changes in AKT shareholders, 1993 – 20091220 ....................................................... 216 Table 96 – The financials of AKT acquisition in 2008 and 2012 .................................................. 217

Table 97 – The financials of AKT, 2007 – 2010H1 ($) ................................................................ 218

List of Figures

Figure 1 – Degrees of capital requirement and asset life time in oil industry .................................... 1 Figure 2 – Risk-return investment profile in oil industry .................................................................. 1

Figure 3 – Average lead times between final investment decision and first production for

different oil resource types ........................................................................................ 2

Figure 4 – Supply response of US tight oil based on oil price in 2020. ............................................. 3 Figure 5 – Cellulosic ethanol breakeven crude oil price for competitiveness with gasoline .............. 3

Figure 6 – Components of total power generation costs, 2020 .......................................................... 4 Figure 7 – Components of total power generation costs, 2040 .......................................................... 4

Figure 8 – Components of electricity price, by regions and time frame ............................................ 5 Figure 9 – Lowered costs in power generation by renewables .......................................................... 5

Figure 10 – Share of renewables consumption in sector demand, 2005-2014, and forecast to

2020 ......................................................................................................................... 6

Figure 11 – Renewable power net additions to capacity under main and accelerated cases by

countries ................................................................................................................... 6

Figure 12 – Breakdown of global renewable energy use in 2010 ...................................................... 7 Figure 13 – Primary energy generation by supply and consumption in the US, 2014 ........................ 7

Figure 14 – Breakdown of global renewable energy use in 2030 ...................................................... 8 Figure 15 – Primary energy supply and consumption in the US, 2014 .............................................. 8

Figure 16 – Average weighted substitution cost and benefits by sector ............................................ 9 Figure 17 – Technology cost curve by primary energy source, 2030 .............................................. 10

Figure 18 – Renewable energy share in global energy consumption, 2013 ..................................... 11 Figure 19 – World energy consumption by end-use in 2012 & projection in 2040 (quadrillion

Btu) ........................................................................................................................ 12 Figure 20 – World energy consumption by source in 2012 & projection in 2040 (quadrillion

Btu) ........................................................................................................................ 12 Figure 21 – Conversion process from shale to fuel oil and byproducts ........................................... 15

Figure 22 – Liquid fuels classified ................................................................................................. 15 Figure 23 – Trends in oil intensity and GDP per capita in selected countries and regions ............... 17

Figure 24 – Early signs of commercialisation in the advanced biofuels sector ................................ 17 Figure 25 – World Energy Model .................................................................................................. 18

xvi – Energy Industry in Indonesia & World's Renewable Energy

Figure 26 – Energy forms .............................................................................................................. 20

Figure 27 – Global New Investment in Renewable Power and Fuels, Developed and

Developing Countries, 2004–2014 .......................................................................... 22

Figure 28 – Renewable Energy Share of Global Electricity Production, End-2014 ......................... 24 Figure 29 – Global renewables-based electricity generation by technology in the New Policies

Scenario .................................................................................................................. 25 Figure 30 – World net electricity generation by source in 2012 & projection in 2040 (trillion

kWH) ...................................................................................................................... 25 Figure 31 – World net electricity generation from renewables by source in 2012 & projection

in 2040 (trillion kWH) ............................................................................................ 26 Figure 32 – World net electricity generation from renewables by country in 2040 (billion

kWH) ...................................................................................................................... 26 Figure 33 – Power mix of renewable electricity in 24 hours ........................................................... 27

Figure 34 – Natural gas prices and the share of non-hydro renewables in the US power mix .......... 28 Figure 35 – Average Annual Growth Rates of Renewable Energy Capacity and Biofuels

Production, End-2009–2014 .................................................................................... 29 Figure 36 – Renewable Power Capacities* in World, EU-28, BRICS, and Top Seven

Countries, 2014 ....................................................................................................... 30 Figure 37 – Energy-related CO2 emissions and economic growth, 2005-2014 ............................... 31

Figure 38 – World energy-related carbon dioxide emissions (billion metric tons) .......................... 31 Figure 39 – Evolution of energy technology costs per unit in the New Policies Scenario, 2014-

2040........................................................................................................................ 32 Figure 40 – Extent of global mandatory efficiency regulation of final energy consumption by

sector and region ..................................................................................................... 35 Figure 41 – Enabling policy in supporting the renewable energy industry ...................................... 36

Figure 42 – Milestones on the road to competitiveness for renewables ........................................... 37 Figure 43 – Energy input–output cross-paths from primary sources to consumption sectors

and energy losses. ................................................................................................... 38 Figure 44 – US energy use, 2014, The Sankey Diagram of energy resources (left) flow to end-

use sectors (right) .................................................................................................... 39 Figure 45 – US Primary Energy Consumption by Source and Sector, 2014 .................................... 39

Figure 46 – U.S. Energy Flow, 2014 (Quadrillion Btu) .................................................................. 40 Figure 47 – World energy demand by fuel and sector in the New Policies Scenario, 2040

(Mtoe)..................................................................................................................... 41 Figure 48 – Power generation by fuel and demand by sector in the US (TWh) ............................... 42

Figure 49 – Power generation by fuel and demand by sector in the EU (TWh) ............................... 42 Figure 50 – Power generation by fuel and demand by sector in China (TWh) ................................ 43

Figure 51 – Power generation by fuel and demand by sector in India (TWh) .................................. 43 Figure 52 – Potential future global oil projects by average breakeven prices .................................. 46

Figure 53 – Australian monthly thermal coal price, Jan. 1980 – July 2016 (US$/metric ton) .......... 53 Figure 54 – Monthly coal prices from Australia, Colombia, South Africa, Jan. 1970 – July

2016 ($/mt) ............................................................................................................. 53 Figure 55 – American weekly coal prices, 20080506-20160812 (US$) .......................................... 54

Figure 56 – Various technologies implemented during power generation process .......................... 56 Figure 57 – Some chemical reactions in converting syngas ............................................................ 57

Figure 58 – Some routes of coal to chemicals from methane via syngas ......................................... 57 Figure 59 – Coal cycle and its derived products schematics, from liquid (CTL), to gas (CTG),

and chemicals (CTC) .............................................................................................. 58 Figure 60 – Potential UCG in the UK, 2004 ................................................................................... 59

Figure 61 – Kincardine UGC project area of interest, 20141105 .................................................... 61 Figure 62 – Kincardine UCG licenses in the Firth of Forth, 20150402. .......................................... 62

Figure 63 – Kincardine area of interest in Midland Valley of Scotland, 20141105 ......................... 63

Energy Industry in Indonesia & World's Renewable Energy – xvii

Figure 64 – Coalmines in British Columbia, Canada ...................................................................... 64

Figure 65 – Selected significant climate anomalies and events, July 2016 ...................................... 65 Figure 66 – Earth's Annual Global Mean Energy Budget, July 1987 – Dec. 1988 ......................... 66

Figure 67 – Earth’s Global Energy Budget, March 2000 – March 2004 ......................................... 66 Figure 68 – Monthly mean atmospheric carbon dioxide at Mauna Loa Observatory, Hawaii,

March 1958 – July 2016 (ppm) ............................................................................... 70 Figure 69 – Oxygen transport capability of different MeO/Me systems. ......................................... 71

Figure 70 – The effective aquifuge in Beizao Coalmine ................................................................. 76 Figure 71 – TBU Underwater coal mining in The Baltic Union...................................................... 77

Figure 72 – TBU Coal Island ......................................................................................................... 78 Figure 73 – TBU Sandisle structure ............................................................................................... 78

Figure 74 – Coal mines in Nova Scotia, Canada ............................................................................ 80 Figure 75 – Donkin coal resource block ......................................................................................... 80

Figure 76 – Solway Firth, Irish Sea, UK ........................................................................................ 83 Figure 77 – The map of Tynemouth-Boldon-Sunderland, NE England........................................... 85

Figure 78 – Deep coal mining closures in the UK, 2010-2015........................................................ 87 Figure 79 – Deep coal mining closures in the UK, 1960-1969........................................................ 87

Figure 80 – Onshore coal distribution in the UK by depth, 2014 .................................................... 88 Figure 81 – Oil reserves in Indonesia, 2014 ................................................................................... 90

Figure 82 – Installed capacity of oil refineries in Indonesia, 2014 .................................................. 92 Figure 83 – Natural gas reserves in Indonesia, 2014 ...................................................................... 94

Figure 84 – LNG plants in Indonesia, 2015 .................................................................................... 97 Figure 85 – LNG plants infrastructure in Indonesia, 2015 .............................................................. 98

Figure 86 – LNG Applications ....................................................................................................... 99 Figure 87 – Gas transmission and distribution in Indonesia, 2010-2025 ....................................... 100

Figure 88 – Bottling plants of LPG in Indonesia, 2015................................................................. 103 Figure 89 – LPG supply scheme from import and 3 PSCs to 3 main terminals ............................. 104

Figure 90 – CBM Basins in Indonesia.......................................................................................... 105 Figure 91 – Coal bed methane (CBM) resources in Indonesia, 2010 ............................................ 106

Figure 92 – CBM PSC terms in Indonesia ................................................................................... 106 Figure 93 – Some CBM PSCs in East Kalimantan ....................................................................... 109

Figure 94 – CBM basin in South Sumatera, Nov. 2011 ................................................................ 112 Figure 95 – Tanjung Enim CBM PSC .......................................................................................... 113

Figure 96 – Muralim CBM PSC .................................................................................................. 114 Figure 97 – Sangatta West CBM PSC .......................................................................................... 116

Figure 98 – The CBM PSCs of NuEnergy in Sumatera ................................................................ 117 Figure 99 – Gasification-based system concepts .......................................................................... 119

Figure 100 – Gasification chemistry ............................................................................................ 119 Figure 101 – Coal distribution in Indonesia by calory class, 2014 ................................................ 120

Figure 102 – Supply and export of Indonesian coal, 1997-2014 ................................................... 121 Figure 103 – Export share over coal production in top producing countries ................................. 121

Figure 104 – Coal seaports in Indonesia, 2015 ............................................................................. 123 Figure 105 – UK banks involvement in Indonesian coal companies ............................................. 124

Figure 106 – Mining permits in Indonesia, 20140203 .................................................................. 125 Figure 107 – Mining problems in Indonesia, 20140203 ............................................................... 138

Figure 108 – JORC's general relationship between exploration results, mineral resources, and

ore reserves ........................................................................................................... 138

Figure 109 – Problems of Non-Clean & Clear Status of IUPs classified and mapped ................... 141 Figure 110 – Adding value to the coal by implementing clean coal technology ............................ 143

Figure 111 – Coal DMO mechanism in Indonesia ........................................................................ 144 Figure 112 – Monitoring and reporting system on the implementation of coal DMO

mechanism in Indonesia ........................................................................................ 145

xviii – Energy Industry in Indonesia & World's Renewable Energy

Figure 113 – Clean & Clear Status of IUPs, May 2011 – April 2016 ............................................ 148

Figure 114 – The mechanics of $600m structure finance (fixed rate note) of IndoCoal in 2005 .... 164 Figure 115 – The mechanics of unrated $900m structured export notes (FRN) of IndoCoal in

2006...................................................................................................................... 164 Figure 116 – Share price of Vallar plc, Bumi plc, and Asia Resource Minerals plc, 9 July

2010 – 10 August 2015 ......................................................................................... 166 Figure 117 – The owners of BLE ................................................................................................. 168

Figure 118 - The net debt maturities of PT Borneo Lumbung Energi & Metal Tbk, 2012q1 ......... 169 Figure 119 - The debt burdens of PT Borneo Lumbung Energi & Metal Tbk, 2012q1 .................. 169

Figure 120 – The flows of debts and stakes within companies related with PT Borneo

Lumbung Energi & Metal Tbk (BORN), Nov.2010 ............................................... 170

Figure 121 – The interests of BNBR and LHHL in Bumi plc, December 2011 ............................. 175 Figure 122 – The interests of BORN and Samin Tan in Bumi plc, June 2012 ............................... 176

Figure 123 – Bumi plc related companies, from shareholders to subsidiaries, June 2012 .............. 177 Figure 124 – The interests of BORN and Samin Tan in Bumi plc, prior to March 2014 ............... 179

Figure 125 – Heart of Borneo: Three countries, One conservation vision ..................................... 183 Figure 126 – Transfers of $15m loan of AKT .............................................................................. 191

Figure 127 – Transfers of $50m loan of BMS .............................................................................. 191 Figure 128 – Transfers of $75m loan of BORN............................................................................ 191

Figure 129 – Transfer of advance and receivable of ETU in BMS and BORN to REM ................ 191 Figure 130 – Classification of asset structure, financial structure, and capital structure ................ 196

Figure 131 – AKT's coal deposit, 200511-201109........................................................................ 203 Figure 132 – BORN's coal specification, worldwide comparation ................................................ 203

Figure 133 – Indonesian coal producers by mine sites .................................................................. 204 Figure 134 – Sea access of AKT as BORN's asset........................................................................ 205

Figure 135 – The site map of Muara Tuhup and Damparan in Central Kalimantan ....................... 206 Figure 136 – Mining activities cycle of AKT ............................................................................... 208

Figure 137 – BORN monthly production, Oct.2008 – June 2010 (000 ton) .................................. 209 Figure 138 – Coal classification by energy content ...................................................................... 211

Figure 139 – Bulk carriers compared by size, from Handysize to Capesize .................................. 213