Pertamina New & Renewable Energy - Comprehensive Analysis Report

Summary

Pertamina New & Renewable Energy (Pertamina NRE) is a strategic subholding of PT Pertamina (Persero), Indonesia's state-owned energy leader. Established in 2020, its core mandate is to drive Pertamina's energy transition, supporting Indonesia's commitment to reducing carbon emissions and achieving net-zero emissions by 2060. The company's vision is "Energizing People and Planet With Green Energy," aiming to foster sustainable progress, empower communities, and preserve the environment. Pertamina NRE's mission is to lead the energy transition and become the regional leader in Low Carbon Solutions, Renewable Energy, and Future Green Business, emphasizing collaboration with strategic partners across state-owned enterprises and international entities.

1. Strategic Focus & Objectives

Core Objectives

Pertamina NRE's strategic focus is primarily built upon three pillars: low carbon solutions, renewable energy, and new and future businesses. The company's main business objectives include:

Leading the Energy Transition: Position Pertamina NRE as a key driver for Indonesia's energy transition.

Regional Leadership: Become the regional leader in low carbon solutions, renewable energy, and future green businesses.

Carbon Emission Reduction: Support Indonesia's commitment to reducing carbon emissions and achieving net-zero emissions by 2060.

Capacity Expansion: Aim for 6 GW of installed clean energy capacity by 2029 through substantial investment.

Specialization Areas

Pertamina NRE actively expands its portfolio across diverse renewable energy sources and low-carbon initiatives:

Geothermal Energy: A top priority, leveraging Indonesia's significant geothermal potential. Through Pertamina Geothermal Energy (PGE), the company aims to double installed capacity from 672 MW in 2020 to 1,128 MW by 2026, targeting 1.4 GW by 2029.

Solar Power: Development of solar photovoltaic (PV) installations in various Pertamina facilities, including substantial projects at the Cilacap refinery complex (1.34 MWp), Plaju Refinery (2.25 MW), Rokan Working Area (25.7 MWp), and Dumai Refinery (2 MW).

Bioenergy: Encompasses biodiesel, biomass, and the development of bioethanol, with a target production of 840,000 kiloliters of bioethanol annually by 2029.

Hydrogen and Green Ammonia: Exploration and development of green hydrogen and green ammonia, with pilot projects targeting 0.04 kilotons per year (ktpa) by 2026, increasing to 100 ktpa by 2027, 2,000 ktpa by 2030, and further expanding to 1,400 ktpa for hydrogen and 360 ktpa for ammonia by 2040 for decarbonizing heavy industry and long-haul transportation.

Carbon Business: A significant player in Indonesia's carbon market, aiming to sell 19.2 million tons of CO2 equivalent carbon credits by 2029.

Battery and Electric Vehicle (EV) Ecosystem: Targeting a battery production capacity of 51.4 GWh by 2029, with involvement in EV battery swapping and charging businesses.

Gas to Power and Waste-to-Energy: Included in its clean energy project portfolio.

Nuclear Power: Expressed interest in participating in Indonesia's nuclear power plant (NPP) development, aligning with a government target of 500 MW by 2034 using small modular reactor (SMR) technology.

The company prioritizes environmental responsibility, continuous quality enhancement, and operational efficiency to achieve its low-carbon solutions.

Target Markets

Pertamina NRE primarily targets the Indonesian and broader ASEAN markets, with ambitions to explore opportunities in Africa and establish partnerships with European entities for its clean energy solutions.

2. Financial Overview

Funding History

Pertamina NRE has demonstrated a robust financial performance and secured significant funding for its ambitious clean energy expansion plans.

2023 Performance:

Revenue: USD 411.5 million (6% increase from 2022).

EBITDA: USD 331.77 million (11% increase).

Net Profit: USD 146.60 million (24% increase).

2024 Performance:

Revenue: USD 416.8 million (1% increase over the previous year).

Net Profit: USD 85.8 million.

Investment Budget: A substantial investment budget of USD 6.2 billion is planned by 2029 to expand its clean energy portfolio, aiming for 6 GW of installed capacity. This budget is more than eight times its current year's allocation as of mid-2024.

Key Funding Initiatives:

PGE IPO & Green Bond: Its subsidiary, Pertamina Geothermal Energy (PGE), successfully executed an Initial Public Offering (IPO) on February 25, 2023, and subsequently issued a global green bond valued at USD 400 million, contributing significantly to its capital.

Energy Fund: Pertamina NRE, in collaboration with MDI Ventures, is developing a USD 500 million energy fund, with an initial close of USD 100 million anticipated in Q1 2024, aimed at investing in renewable energy startups.

Strategic Financing Exploration: In November 2025, Pertamina NRE signed a Letter of Intent with Invest International to explore financing options for low-emission hydrogen projects, solar power plants, and other renewable energy initiatives in Indonesia.

3. Product Pipeline

Pertamina NRE is actively developing a diverse range of projects across its clean energy portfolio:

Geothermal Projects:

Major developments are planned in South Sumatra, Lampung, and North Sulawesi.

Development of the Lumut Balai 2 geothermal area with a capacity of 55 MW.

In June 2023, a consortium of PGE and Chevron won the tender for the Way Ratai geothermal working area in Lampung.

Aim to increase geothermal capacity from 672 MW (2020) to 1,128 MW by 2026.

Solar Power Plants (PLTS):

Operational 2.2-megawatt solar plant in Sei Mangkei.

Operational 2.5 MW rooftop solar power plant at the Balikpapan Refinery Unit.

Ongoing development of a 25.7 MWp PLTS in the Rokan Working Area.

Hydrogen Development:

Three-phase roadmap targeting pilot projects by 2026 with 0.04 ktpa production.

Export and domestic market strengthening: 100 ktpa by 2027, 2,000 ktpa by 2030.

Large-scale production: 1,400 ktpa hydrogen and 360 ktpa ammonia by 2040.

Initiatives include utilizing geothermal electricity for green hydrogen and green ammonia production.

Bioethanol Production:

Construction of a bioethanol plant in Banyuwangi, in collaboration with Pertamina Patra Niaga and PT Sinergi Gula Nusantara, with a production capacity of 30,000 KL per year.

Carbon Business:

Expansion of the carbon credit portfolio through biogas, gas to power, and nature-based solutions projects.

Key carbon credits currently derived from Lahendong Geothermal Power Plant (Units 5 and 6).

Target to sell 19.2 million tons of CO2 equivalent carbon credits by 2029.

Battery and EV Ecosystem:

Key player in the Indonesian Battery Corporation (IBC), which plans to complete an EV battery plant by 2026.

Nuclear Power:

Conducting studies on technology, location, and energy sources for potential involvement in Indonesia's nuclear power development, targeting 500 MW by 2034.

4. Technology & Innovation

Technology Stack

Pertamina NRE leverages and integrates various renewable energy technologies and platforms:

Geothermal Technology: Active exploration and operation of geothermal work areas and power plants through PGE, exemplified by projects like Lumut Balai 2 Geothermal Power Plant.

Solar PV Technology: Extensive deployment of solar photovoltaic (PV) technology for electricity generation in various solar power plants (PLTS) across Pertamina's operational areas.

Bioenergy Processing: Application of technologies for converting biological materials into energy, including green diesel, biodiesel, biomass, and bioethanol. Research is underway to develop hydrotreated biodiesel catalysts.

Hydrogen and Ammonia Production: Focus on green hydrogen and green ammonia utilizing advanced electrolysis technologies, often powered by renewable electricity sources like geothermal plants.

Carbon Capture and Storage (CCS/CCUS): Support for decarbonization efforts through CCS/CCUS technologies in upstream operations, complementing its carbon market activities.

Smart Grid and Energy Management: Development of predictive maintenance, energy conservation, power systems knowledge-sharing, and hybrid power systems through collaborations (e.g., with Hitachi Energy) to enhance operational efficiency and reduce carbon footprint.

Battery Energy Storage Systems (BESS): Investment in large-scale solar power plants that incorporate BESS, indicating a commitment to energy storage solutions.

Scientific Methodologies

The company’s approach is rooted in exploring and implementing cutting-edge technologies, integrating scientific research in areas like catalyst development for bioenergy and advanced electrolysis for green hydrogen.

Proprietary Developments

While specific proprietary developments are not detailed, Pertamina NRE fosters innovation through internal initiatives and partnerships, suggesting a focus on customized solutions and efficiency enhancements within its projects.

Technical Capabilities

The company demonstrates capabilities in project management for large-scale energy infrastructure, operational expertise in diverse energy types, and strategic planning for long-term technological roadmaps.

Pertamina NRE encourages creativity, efficiency, and operational excellence through its "INSPIRE" annual innovation forum. This program engages employees and business partners from entities like PGE, PT Jawa Satu Power (JSP), and Indonesia Battery Corporation (IBC) to develop innovative solutions, with top innovations potentially advancing to international platforms. The company's commitment to technological improvement is further reinforced through partnerships for knowledge transfer and joint research initiatives.