Academic Contribution & Publication

Following the Paris Agreement on climate change, Indonesia has committed to reduce its greenhouse gas emissions by 29-41% against the business as usual scenario by 2030. In addition, Indonesia also has been encouraged to boost its national energy security and independence. To accomplish these targets, the Government of Indonesia has embarked on various attempts as emphasized in the National Energy Plan by increasing the use of renewable energy, especially from geothermal energy sources. However, the significant capital costs and risks have caused geothermal projects less attractive and more challenging. The cost of drilling dominates the proportion of the overall project investment cost, including long-lead items such as casing pipes.

In the Indonesian geothermal industry, the developers have been encouraged to source the components from local manufacturers to increase the competitiveness between the domestic manufacturing industry and to minimize transportation costs. In contrast, some geothermal developers, which are financed by international funding institutions, are required to do international bidding as required in the procurement guidelines in order to give a wide choice of selection. Therefore, the international bidding requirements necessitate importing finished casing pipes into Indonesia. Inaccurate decisions during procurement processes, especially for casing pipes, could lead to major operational issues and costs in the future.

This research aims at getting a deep understanding of how different funding sources can give impacts to long-lead items procurement, especially casing pipes, in geothermal development projects in Indonesia. The paper also investigates the challenges and opportunities that come with the use of local content. The research of local content for long-lead items on Indonesia geothermal drilling procurement has been limited. Thus, the presence of this paper intends to fill the gaps in the field.

As a country that is believed to have one of the largest geothermal energy potentials in the world, Indonesia is currently in the effort of achieving the target of utilizing this potential. One of the most significant obstacles in the process of achieving this target is the high drilling cost, which has become a topic of discussion in many geothermal forums in Indonesia. Geothermal drilling activities is commonly known to have expensive cost components which can give immediate effect to the total cost of the whole geothermal project. Therefore, it is highly important to manage it from the early planning phase to the execution in order to optimize the actual cost at the end of the drilling project. One fact that makes the authors of this study confident that there is still room for improvement or optimization in geothermal drilling costs in Indonesia is the wide variation of drilling costs summarized by Government in Indonesia based on geothermal well drilling data in Indonesia from 2011-2018.

One of the challenges in conducting this study is the difficulty of obtaining geothermal drilling data in detail from geothermal developers in Indonesia due to the absence of an integrated database system and lack of publication from Indonesian drilling engineers. While waiting for the drilling data to be gathered, the authors start a discussion to map all factors that might impact the overall drilling cost. Later, when the drilling data is available, all the factors mapped in this study can be analyzed to see the correlation strength to the total drilling cost. The authors consider this as a preliminary work that summarize the brainstorming sessions between authors on several factors impacting the drilling cost. Therefore, the final goal is to trigger further study with more focus on each area or factors that contribute to drilling cost and increase awareness of Indonesia drilling community to build an integrated database system to accelerate the learning process in drilling geothermal wells.

Dieng geothermal field, located in the Dieng Plateau area in Central Java, is currently installed with a geothermal power plant with capacity of 60 MW, which has been operated since 2002. Located at around 2,000 masl, the geothermal power plant is surrounded by a local community that lives from agriculture and tourism. The main agricultural commodity in the area is potato, while tourism objects are volcano craters, thermal manifestations, caves, and temples.

This study initiated by mapping various existing direct applications of geothermal energy in Dieng geothermal field, especially those related to tourism, health and agriculture. The summary results are then compared with direct-use applications in other geothermal prospect areas, both in Indonesia and abroad. The final goal of this study is to identify other direct-use applications opportunities that are feasible to be applied in this area to improve the local community welfare.

Indonesia, as one of the countries with the biggest potential for geothermal energy in the world, is currently trying to increase geothermal energy utilization from installed capacity of 1,700 MW to 7000 MW in 2025. One of the challenges identified in developing geothermal energy in Indonesia is the lack of skilled labor or experts to run a geothermal project, both in the exploration and exploitation stage. Project manager role is considered important because they are responsible in leading a multi-disciplinary team through various phases of the project, which at the exploration stage includes project socialization, 3-G survey, land acquisition, civil construction, drilling and well testing.

The initial hypothesis used in this study is that a project manager should have competency not only in project management and safety aspects but also various other basic competencies such as geothermal basic knowledge, which will be discussed in more detail in this paper. To test this initial hypothesis, the study team conducted a literature review of various competency matrices that already exist in several energy development projects throughout the world. Another method used in this study is a direct survey to several geothermal practitioners in Indonesia related to the competencies that must be possessed by a geothermal project manager.

This preliminary study aimed to identify the need to develop a training curriculum and assessment for personnel who wish to become project manager in a geothermal exploration project in Indonesia. In addition, this study also maps the competency matrix should be applied for the project manager position in order to increase the success rate of geothermal energy development projects in Indonesia.

In attempt to achieve national target of geothermal energy development, it is important to have all geothermal exploration project run as per schedule. However, as an archipelago nation, Indonesia faces wide ranges of challenges in developing its geothermal energy, especially those located in the Eastern Indonesia. The lack of infrastructure development and the connection between the main islands are the main challenges. Another challenge is that most of geothermal prospects in Indonesia are associated with volcanic activities and lies in high-relief terrain, which creates a lot of geohazards. Moreover, other typical challenges such as community rejection, regulation and environmental issues makes it more difficult for any developer to run a geothermal exploration project in Eastern Indonesia, constructing the drilling infrastructures.

This study aims to summarize several potential challenges that most likely will be encountered by the geothermal developer in the construction of drilling infrastructure in Eastern Indonesia during exploration phase and several mitigation options, which are based on literature review and authors experiences.

Exploration phase has the highest uncertainty thus highest risk in a geothermal development project. Drilling cost is one of the critical components that significantly affect geothermal project development cost. In general, there are two major risks associated with drilling, consisting of resource risks and other risks. Resource risks are mainly associated with temperature and permeability. A robust conceptual model built from reliable data is necessary to assess both of resource risks and assist the well targeting process. Other risk are ones that related to regulation, drilling infrastructure, drilling operation issues, environmental aspect, and local community issue. The variation of drilling objectives in each stage of the project (exploration, appraisal, development) requires different strategies in order to minimize the associated risk and project cost.

This preliminary study aims to summarize the thinking process or main considerations when developing the exploration drilling strategy, which accommodate subsurface, environmental, drilling, construction perspectives based on literature reviews, and authors experience. This study also presents a generic guideline developed by the authors to assist the decision-making process in developing strategy in a geothermal exploration project in Indonesia.

One of the important factors is achieving a successful drilling campaign is by having proper drilling contracts that is fitting with the current company’s organizational capability. This leads to the question on which type of contract is the best for a certain drilling project, especially in the exploration phase in Indonesia. This issue is currently on the rise in geothermal industry in Indonesia due to Government of Indonesia’s effort to achieve 7,200 MWe geothermal plant installed capacity in 2025. However, there is no absolute answer to that question as the decision making to choose the drilling contract type is usually involving more than one criterion. Therefore, it is necessary to use decision-maker’s preferences to differentiate between alternatives.

Several drilling contract type for geothermal exploration project in Indonesia that is commonly known are discrete contract, integrated project management contract (IPM), and semi-IPM where usually the selection of contracts is primarily based on the organizational capability company has at the time. However, based on literature reviews, there are several other ways for drilling contract types that do not really fit into the three categories mentioned previously and might improve the drilling performance.

This paper discusses the application of Multi-Criteria Decision Analysis (MCDA) in assisting the decision-making process in drilling contract type selection. MCDA is considered as one of complex decision-making (DM) tool involving both quantitative and qualitative factors. It has been widely applied in various fields such as; energy and environment, business, economy and production.

The study initiated by defining clear objectives of drilling contract. Several drilling contract scenarios or alternatives are then identified to be examined where most of scenarios are developed based on published literature related to case in Indonesia. Sensitivity analysis is conducted to test whether conclusions are sensitive to changes in the model.

Drilling is one of the major cost components in geothermal exploration and development. Effective and cost-efficient drilling significantly contribute to the success of geothermal development. Key factors in reducing drilling costs are optimising operations, utilising manpower to its fullest potential, and also benchmarking with other drilling activities to evaluate one’s performance objectively. This is possible if the information regarding the previous drilling activities is stored and easily gathered and analysed before making plans for the drilling campaign.

The importance of drilling data analysis and drilling data management have been a subject of study and discussion since the 1980s, but it is still not that common in geothermal drilling, especially in Indonesia. The purpose of this paper is to summarise the definition and examples of drilling data management in a more well-established industry such as oil and gas from various studies in the past, assess the advantages of having a proper drilling database or data management system, and how can the data be used for potentially improving future drilling operation. A case study of converting legacy data from previous drilling campaign of two geothermal fields in Java into a database is also discussed to demonstrate how legacy drilling data can be used to evaluate drilling performance.

Indonesia has many mature oilfields with high water-cut, where the produced water still has sufficient temperature that can be utilised for other purposes. One of possible utilisation of the sufficiently high-temperature water is for geothermal power generation through Organic Rankine Cycle binary power plant.

The idea of utilising oilfield wells for geothermal power generation has been discussed and studied to reduce the operating cost of oil and gas production and to extend the life of the mature oilfields. Commonly oil and gas reservoir are not as hot as conventional geothermal reservoir. However, several studies concluded that some old oil wells in Texas and Wyoming are deep enough to reach the temperatures of 121 °C (Xin, Liang, Hu, & Li, 2012), and even some of the wells reach 210 °C.

Oil well produced-water needs to be treated and reinjected back to reservoir, and as the oilfields become more mature, the amount of produced water is increasing as the oil production decrease (Xin, Liang, Hu, & Li, 2012; Soldo & Alimonti, 2015) until to the point where the oilfield is depleted and is not producing oil anymore, only water. This water by-product is often hot enough to power some binary ORC (Organic Rankine Cycle) unit. Other potential applications are for direct use such as agriculture product drying/cultivation, thermal bathing, etc.

This paper aims to summarise the worldwide experience of utilising the hot produced water from mature oilfields for various purposes such as electricity generation or for direct use application (e.g. heat exchanger, agricultural heating/drying, etc.). A literature survey was conducted from various studies and published research review the technology required for these aforementioned application. The potential for such an application in Indonesia is also discussed.

Indonesia has an established petroleum industry dates back from 1870 when the first oil well drilled in Majalengka. The long history of petroleum exploration and production in Indonesia has resulted in an established petroleum industry with a lot of local expert. Thus, a wide availability of expert and professional in petroleum industry can be utilized to support government goal for Indonesia development, such as geothermal energy development.

Government of Indonesia (GoI) is planning to increase the installed capacity of geothermal power plant installed capacity from currently about 1,900 MW into 7241 MW in 2025 (RUEN, 2017). Jennejohn (2010) calculated that it needs 4.25 full-time positions and 16 person-years for one megawatt electricity generated from geothermal. Therefore, with the addition of four-fold capacity, the number of personnel needs of staffs and experts in the field of geothermal will require approximately 22,699 jobs with 85,456 person-year employment. The drillers and crew are among those workforces besides geoscientists, engineers, hydrologists and operations personnel which must be prepared before starting a geothermal project (Smillie et al., 2015).

The geothermal drilling manpower needs can be obtained from new job candidate training or transfer from related industries. Many of the workforces in the Indonesian geothermal drilling indeed come from the petroleum drilling because of many similarities on technology and equipment. However, these workforces tend to apply the same approach to oil and gas in the geothermal industry due to some similarities in the drilling process despite there are some fundamental differences between the two. Thus, such approach might create problem in the future, both in drilling safety and operational concern. This paper aim to highlight the existing drilling professional skills in petroleum industry and the adjustment need for geothermal drilling. This paper also aims to provide suggestion in which area the current geothermal drilling skills are lacking and can be improved to help the GoI achieves its target.

Indonesia adalah salah satu negara berkembang yang memiliki tidak hanya potensi sumber daya energi yang besar tapi juga laju pertumbuhan penduduk yang cukup tinggi. Untuk dapat memenuhi kebutuhan masyarakat dan industri, Indonesia memerlukan pasokan energi yang cukup besar di mana saat ini konsumsi energi Indonesia masih sangat tergantung pada sumber energi tidak terbarukan seperti minyak bumi, batu bara dan gas alam. Pemanfaatan bahan bakar fosil tersebut secara berkelanjutan berkontribusi terhadap peningkatan emisi gas rumah kaca dalam jumlah besar yang menuntun kepada perubahan iklim secara global.

Pemerintah Indonesia, melalui Peraturan Presiden Republik Indonesia Nomor 5 Tahun 2006, telah mencanangkan target untuk terwujudnya bauran energi yang optimal pada tahun 2025, di mana peran energi terbarukan terhadap konsumsi energi nasional menjadi 17%. Dalam komposisi energi terbarukan tersebut, sumber energi panas bumi mendapat porsi lebih dari 5%. Target bauran energi ini bertujuan untuk mewujudkan keamanan pasokan energi dalam negeri. Walaupun tidak secara tertulis menyebutkan adanya tujuan yang berhubungan dengan pengurangan dampak terhadap lingkungan, peningkatan bauran energi bersih akan mengurangi emisi rumah kaca di Indonesia.

Sayangnya, energi panas bumi sebagai salah satu sumber energi utama dalam kategori energi terbarukan belum dimanfaatkan secara optimal di negara ini. Sejak pembangkit listrik tenaga panas bumi pertama, Kamojang-1, diresmikan di tahun 1983 sampai dengan tahun 2017, Indonesia baru berhasil memanfaatkan energi panas bumi sekitar 6% dari total potensi nasional. Studi ini, melalui penelusuran pustaka, berusaha untuk merangkum berbagai tantangan yang dihadapi oleh negara Indonesia dalam mendorong pemanfaatan energi panas bumi untuk mencapai target pemerintah di tahun 2025. Studi ini juga berusaha untuk membuat berbagai alternatif solusi untuk dapat membantu mempercepat pengembangan energi panas bumi di Indonesia.

Pengeboran adalah salah satu tahapan penting yang berdampak pada biaya proyek pengembangan panas bumi secara signifikan. Secara umum, risiko utama dalam pengembangan energi panas bumi, terutama di tahap eksplorasi, dapat dikategorikan menjadi dua. Risiko pertama adalah risiko yang terkait dengan sumber daya atau cadangan yang terkandung di dalam suatu reservoir panas bumi, di mana temperatur dan reservoir menjadi pertimbangan utama. Risiko kedua adalah berbagai risiko yang terkait dengan infrastruktur pendukung pengeboran, potensi masalah dalam operasi pengeboran, aspek lingkungan, dan masalah dengan masyarakat setempat. Tingkat berbagai risiko tersebut juga sangat dipengaruhi oleh biaya pengeboran di mana semakin tinggi biaya pengeboran yang dianggarkan maka semakin tinggi tingkat risiko proyek tersebut.

Suatu proyek pengembangan panas memiliki beberapa tahapan yaitu eksplorasi, evaluasi dan pengembangan. Setiap tahapan tersebut memiliki tujuan pengeboran yang bervariasi sehingga sering kali memerlukan strategi yang berbeda untuk meminimalkan risiko. Studi awal ini bertujuan untuk merangkum proses berpikir terhadap berbagai pertimbangan utama saat mengembangkan strategi pengeboran eksplorasi. Pertimbangan tersebut terutama didasarkan kepada faktor-faktor seperti keadaan bawah permukaan (sub-surface), lingkungan, biaya operasi pengeboran dan konstruksi infrastruktur pendukung. Materi penelitian didapatkan dari tinjauan pustaka dan pengalaman penulis. Hasil dari penelitian ini diharapkan dapat memberikan pedoman generik dalam proses pengambilan keputusan dalam suatu proyek pengeboran eksplorasi panas bumi di Indonesia.

Indonesia is believed to have the biggest geothermal energy potential in the world, 29 gigawatt electric, spread over the archipelago. However, the development rate is considered slow where in the last 34 years, from 1981 to 2017, Indonesia only managed to utilize 6% of its total geothermal potential. Furthermore, a target has been set by Government of Indonesia to reach 7,200 megawatt electric installed capacity from geothermal energy in 2025 which requires installation rate of 620 megawatt per year. This target could only be achieved with significant collaborated-effort from all stakeholders.

One of the identified challenges in achieving this goal are issues related to land acquisition process, especially in the early exploration phase where the local community is not familiar yet with a geothermal project. What makes land acquisition process in geothermal project is unique compared with other projects is that most of geothermal prospect area are located on the forestry and volcanic area, which usually state-owned, but most of the times there are local people that already claim ownership or make a living on the land (food gathering, farming, wood gathering, etc.), further complicate the problem. Many times, these issues become more intricate due to the lack of understanding from the geothermal developer side on the land regulation in Indonesia and on the local community custom. In the long run, failure to manage land acquisition issues properly may lead to project delay and potentially bring a significant economic impact to the project.

A literature reviews are conducted to summarize several aspects of land acquisition process such as type of land, land requirement for exploration project, land survey and mapping, law, regulation and standards, land and crop appraisal, negotiation and payment method, land registration and creating land database. In additional, several case studies related to land acquisition in Indonesia will be discussed to provide a better context of this research. Finally, this study aims to develop a general guide in acquiring land for geothermal exploration project in Indonesia based on land regulation in Indonesia and IFC standards.