Pertamina Power Indonesia (Pertamina NRE), Keppel Infrastructure, through Keppel New Energy Pte. Ltd., and Chevron Corporation have agreed to explore green hydrogen and green ammonia development projects by using renewable energy in Sumatra. The three companies signed the Joint Study Agreement (JSA) on Business 20 (B20) Investment Forum on November 11, 2022, in Nusa Dua, Bali.
Subsidiary of state-owned oil and gas giant company PT Pertamina (Persero), Pertamina NRE is an energy firm focusing on developing clean energy. The company committed to support Indonesia's 2060 net zero emission through energy transition and ESG (environmental, social and corporate governance) implementation. It also has 4 subsidiaries and affiliations: PT Pertamina Geothermal Energy, PT Jawa Satu Power (affiliate), PT Jawa Satu Regas (affiliate) and PT Industri Baterai Indonesia (Indonesia Battery Corporation/IBC).
Keppel Infrastructure (KI), subsidiary owned by Keppel Corporation, is a leading Singaporean multinational company that provides solutions for sustainable urbanization. KI provides solutions to some of the world's most pressing problems through the electricity and gas, environment and new energy businesses by leveraging its proprietary technology, strong technical expertise and proven operating capabilities.
Chevron is one of the world's leading integrated energy companies. The company focuses on reducing the carbon intensity of their operations and developing a low carbon business together with their traditional lines of business.
Exploring green energy
The JSA signing took place at the Business 20 (B20) Investment Forum, ahead of the B20 Summit. B20 is the official dialogue forum of the G20 representing the global business community. Pertamina NRE CEO Dannif Danusaputro; Director of Keppel New Energy, Pte., Ltd., Yong-Hwee CHUA and Director of Chevron New Energies International, Pte., Ltd. Andrew S Mingst signed the agreement.
Among the witnesses of the signing were Coordinating Minister for Maritime Affairs and Investment, Luhut Pandjaitan; Minister of Investment/Head of Indonesia Coordinating Board (BKPM) Bahlil Lahadalia; President Director & CEO of PT Pertamina (Persero) and Head of the B20 Energy, Sustainability and Climate Task Force, Nicke Widyawati; and CEO of Keppel Infrastructure, Cindy Lim.
The agreement intends to explore the feasibility of developing a green hydrogen facility, with a production capacity of at least 40,000 tons per year supported by at least 250 - 400 MW of geothermal energy at an early stage. The hydrogen production facility will have the potential to be scaled up to 80,000 and 160,000 tons per year, depending on the availability of geothermal energy as well as market demand.
Challenges in achieving zero emissions
According to the International Energy Agency (IEA) report, Indonesia has a good plan in achieving net zero emissions by 2060. Hydrogen and ammonia are low-carbon fuels which are an important part of this plan. Ammonia can also be used to transport hydrogen and has the potential to replace bunker fuel as a low-carbon solution in the global maritime industry.
Indonesia has about 40% of the world's potential geothermal resources, that could utilize geothermal energy as a reliable and stable energy source to produce green ammonia or green hydrogen.
However, there are several factors that may hinder investments in these sectors. They are, among others, high initial capital, lack of financial institutes, lack of investors, competition from fossil fuels and fewer subsidies compared to traditional fuel.
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