Indonesia has all the ingredients for gas to power to become a significant industry. Indonesia has the reserves, the infrastructure, the economic and demand growth coupled with the political will necessary to unlock this vast potential.
There is evidence that the independent power producer market within Indonesia is growing strongly. In November 2015 Perusahaan Listrik Negara reported that it had signed power purchase agreements (PPAs) for a combined capacity of 9,403 MW. This represented over 37 per cent. of the Government’s target to develop 35,000 MW of new power plants within the country by 2019/2020. Some 25,000 MW of this overall target has been “ear-marked” as independent power producer developments.
The Company has undertaken a preliminary assessment of the gas to power development options available in Indonesia which suggests that gas engines are likely to be the most economically feasible as a result of being capital cost effective, modular and scalable, tolerant of varying inlet gas pressures and quality, and with a short timeline to installation and operation. Typically, the Company estimates that 6 MMscf/d of plateau gas production could produce up to 30 MW of power.
Indonesia is a fast growing economy predicted by McKinsey & Company to be the world’s 7th largest economy (currently 16th largest) and has the 4th largest population globally with over 295 million people by 2030.*
* Source: McKinsey & Co; UN World Population Prospects 2015 Revision; PwC World in 2050 (Feb 2015).