GE Challenge ID

Case Study

Welcome to the GE Challenge Indonesia 13!

"I find my greatest pleasure, and so my reward, in the work that precedes what the world calls success" - Thomas Alva Edison, GE Founder From solutions for energy-efficiency to more accessible healthcare, GE works on things that matter. Building, powering, moving and curing the world. Not just imagining but doing! This is your opportunity to take on and solve one of the toughest challenges!

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Contents
This book shares you 3 things: Indonesia Energy Challenge

Purpose: To give you the insight how to map out the current situation in Energy Challenge and replicate the approach to your project.
GE Challenge Project Purpose: To structure your team project and approach to develop ideas on how to solve energy challenge in your campus GE Ecomagination Purpose: This is how GE takeover the world energy challenge by developing technology solution that can meet energy needs, environmental wise and economic structure.

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Macro Overview: Indonesia Energy Challenge

Indonesia has a wide variety of abundant energy resources, including fossil and non-fossil resources, and has been a net energy exporter for many years. The primary energy source fueling Indonesias economy continues to be oil, although decreasing domestic production, increasing domestic consumption, and global price hikes over the past few years have reduced oil consumption and prompted efforts to develop other domestic energy resources. Some discussions mentioned that coal will be the primary domestic energy resource in the future, particularly to fuel new power generation capacities. The second most important fuel source for Indonesias population is biomass, although most of its use occurs in the informal economy. Meanwhile, biofuels have been identified as the primary energy resource to diversify transport fuels. Even though Indonesia gas resources are potentially high but the infrastructure still needs more homework to do.

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Energy Sector Snapshot

(2012 data)
10.0 8.0 6.0 4.0 2.0 0.0
2010 2011 2012 2013 2014 Geo Hydro 4% 5% HSD 11%

GDP growth
Indonesia Malaysia Thailand Singapore Philippines Vietnam

>17
thousand
Islands across the region Largest archipelago

242
million
Total population 4th world most populous

300
ethnics
Spread over 33 provinces >742 dialects, >100 traditional instruments

Myanmar

>6.5
percent
GDP Growth
25th World economic stability

846
billion
Current nominal GDP Largest South East Asia economy

118
million
Labor forces >50% under productive age

MFO 4%

37

GDP per capita

($ thousands)

Coal 51%

Gas 22%
Oil

7
SG MY

3
TH

2
ID

1
PH

1
VN

25
billion
Tons of coal reserves

25
percent
Debt to GDP ratio >4500 income per capita

5.3
percent
Inflation rate $>0.5 trillion industries attraction

LNG 3%

Inflation %
VN SG ID PH TH MY 9% 5% 4% 3% 3% 2%

46 20

FDI inflow ($B)

Largest exporter

9
SG ID MY

8
VN

8
TH

4
1
PH

157
trillion
Cubic feet of gas reserves 20th globally

27
gigawatts
Geothermal reserves Largest globally 5/ GE Title or job number / 10/1/2013

billion
Barrels of oil reserves Largest in APAC

Energy Usage
Total of energy supply in Indonesia reach 1.5 Million BOE in 2012 with top-3 supply from oil (41.45%), Coal (23.38%), Gas (18.31%). And 42% of energy supply is consumed by industrial sector and 37% by transportation sector. Facing those realities, the energy sector in Indonesia designed four key policies and objectives include: Diversification: A key objective of the Government of Indonesia is to reduce dependence on oil by expanding the use of coal, gas, and renewable energy resources. Rational Energy Pricing: The Government of Indonesia recognizes that it can no longer sustain uniform pricing for electricity and petroleum products across the country, and it has begun to eliminate subsidies. Energy Sector Reform: The combination of decentralization of government decisionmaking to give greater involvement to regional authorities, and the need to attract capital investment in the energy sector call for energy sector reform that introduces greater transparency to planning and decision-making. This is now a critical priority for the government. Rural Electrification: The Government of Indonesia wants to bring electricity to 90 percent of the population by 2020.
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Energy Supply

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Impact of Energy Usage

Coal is abundant resources and cheap for Indonesia. In other sense, the expanded use of coal will significantly increase emissions of SOx, NOx, PM10, and a range of other pollutants. Current pollutant emissions standards in Indonesia are less stringent than in other countries in the region. However, newspaper reports claim that responses to early tenders for coal-fired plants have not met existing Indonesian standards for emissions. The extent of the impact of the plants will depend heavily on what national standards Indonesia sets and enforces for coal-fired power generation. Setting higher standards will increase the cost of new power generation and could reduce the thermal efficiency of the plants to be built, resulting in increased CO2 emissions. The increased cost needs to be offset against the adverse health impacts of not applying more stringent standards. As other option is Oil. Oil in Indonesia is 1.2% of global production Ranks 20th Globally in terms of reserves, and estimated to have 128 oil basins. Oil especially diesel will be one of the fastest solution for generating energy/electricity in Indonesia especially in remote area. However, price for oil especially for Diesel is on different league and can harm country monetary stability. As conclusion, the impact of energy use must be balanced in expected energy needs, environmental wise, and financial perspectives.
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Energy Cost
Energy Gen. Cost Comparison
Cost of Generation (cents/KWh)

Diesel Landed Price Variation

$1.4-$1.9/Ltr $2.4-$2.9/Ltr

45 40 35 30 25 20 15 10 5 0

$1.0/Ltr

High diesel landed prices in rural areas makes alternatives (biomass) very attractive
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Future Outlook
Indonesia population is 241.2 M with 71.8% electrification ratio and 156.3 Twh energy demand in 2011. Population growth is 1.2 % per annum will reach 258.9 M in 2021. Government target to have more than 90% electrification by 2021 therefore energy demand will increase until 358.3 Twh in 2021. Generating this projection, Indonesia will need about 57 GW additional plant capacities by 2021. On the execution part, Indonesia cant rely on PLN only but also will need to empower more IPP and private sector.

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Energy Projection

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Renewable Energy as Alternative

In the current case, diesel will be the solution of off-grid area/remote area which in contrast to energy efficiency. Therefor e, renewable energy projects have received considerable attention from policy-makers in Indonesia. The electricity regulations for small and medium-scale power generation from renewable energy resources will definitely increase the use of renewable energy. However, despite efforts to clarify procedures and terms of sale, negotiation of power purchase agreements to achieve acceptable rates of return on investment in renewable energy projects remains challenging, even in locations where the renewable option is significantly cheaper than the conventional diesel generators.

The benefit of having renewable energy is to meet energy demand with affordable price and can become environmental friendly solution. Additionally, renewable energy has lower operation cost than other fuels since the energy resource is coming from feedstock (e.g woodchip) which can be locally provided especially for remote area energy alternative.

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Reserve of Renewable Energy even in Regional Perspective

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GE Challenge Project
Be the Changemaker in your Campus

Business Scenario
You are acting as CEO of Green Campus Co. in your campus. Your objective is to reduce energy usage or find energy alternative to respond energy demand in your campus.

On the first stage you need to identify:

Current energy situation and landscape in campus Energy regulation in campus Key related stakeholders in campus Current energy usage and cost/expenses Future energy projection Room for development on energy sector: Develop your ideas!!

Others, you may refer from previous case study to generate more ideas

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The Team
You need to form core team composed by 4 persons including yourself: CEO Chief Executive Officer Main goal is to drive the key milestone, deal with key stakeholders and make sure the company initiative is sustainable. CFO Chief Financial Officer Main goal is to ensure all company initiative will meet budgeted plan and will increase energy usage efficiency. CMO Chief Marketing Officer Main goal is to develop mindshare and strengthen company brand. COO Chief Operating Officer Main goal is to reduce wasted operational activities and design solutions to be implemented.

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Timeframe and Objectives

Your company needs to start-up the initiative and creating the impact to your campus society. You need to clearly identify your problem and address it with reasonable and applicable solutions. The goals that you need to achieve: Your company needs to develop imaginative and creative energy solutions. Business scope of your company: Campus area (including: buildings, classrooms, laboratory, library, IT system, elevator, road, parks, cars, motorcycle, water treatment, sport facilities, etc.) Success parameters: electricity consumption, fuel consumption, carbon emission, water consumption reduction and environment impact. Popularity: The more people you engage, and the wider scope of your company; then your company will attract more investors and rank on the top listed company.

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Timeframe and Objectives

On developing company initiative, you will need to do marketing campaign to attract more people to join your company effort. Your marketing campaign can include: Social Media: Facebook, twitter, video in youtube Website or other electronic media Non electronic media The more popular your company, and the more endorsement you have; then your company will attract more investors and rank on the top listed company. Please copy GE Challenge Facebook account and GE Challenge Twitter account in your campaign.

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Timeframe and Objectives

In the end of the project, your company is expected to create: Round 1 (All Registered Team): Summary Report: It contains 5 pages of company initiative that describe the whole activities and impact. Business Report: It contains comprehensive report with maximum 10 pages of company initiative in detail. Round 2 (Only Top 5 shortlisted teams to submit): Detailed report with maximum 30 pages. Business Pitch: It becomes presentation deck that your company used for attracting investors (Not more than 11 slides)

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Enjoy the Learning Phases!

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GE Ecomagination
Supporting Green Growth

We must ask not only if it is profitable, but is it right?

Barrack Obama, 2009

Increasing Population
Increasing Pollution

Increasing Urbanization
Increasing Water scarcity

Increasing Consumption

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Increasing population: From 7B to 9.6B by 2050*

Europe 732m -10% Russia 112m -22%

North America 438m +32%

Asia 5.2b +34%

Africa 2.3b +114%

Latin America 783m +40%

Oceania 57m +46%

*If fertility remains constant at 2010 levels
Source: World Population Prospects: The 2010 Revision, United Nations Population Division

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Increasing Pollution : Carbon Emissions

2.6%
growth
2011-2012

0.8
degC

Uncertainty is 5% for one standard deviation (IPCC likely range) Source: Peters et al. 2012a; Le Qur et al. 2012; CDIAC Data; Global Carbon Project 2012
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Increasing Pollution : Carbon intensity of Economic Activity

Source: Peters et al. 2012a; Le Qur et al. 2012; CDIAC Data; Global Carbon Project 2012
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Increasing Pollution :
Emissions by resources

1200
coal power plant proposed

Source: CDIAC Data; Le Qur et al. 2012; Global Carbon Project 2012 , World Resources Institute

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Global Green Movement

1987
1990

POPULARIZES SUSTAINABLE DEVELOPMENT (BRUDNTLAND REPORT) KYOTO PROTOCOL

1992

2000

RIO EARTH SUMMIT (UN CONFERENCE ON ENVIRONMENT AND DEVELOPMENT)

MILLENIUM SUMMIT UN MDG

2008

WORLD FINANCIAL CRISIS

2008

UNEP GREEN ECONOMY INITIATIVE

RIO +20 UN CONFERENCE ON SUSTAINABLE DEVELOPMENT Key Theme Green Economy in the context of Sustainable Development and Poverty Eradication

2012

2012 +

GREEN ECONOMY
LOW CARBON GROW TH

RESOURCE EFFICIENCY

SOCIAL INCLUSIVENESS

SUSTAINABLE DEVELOPMENT

Energy challenge
The only viable ways to stabilize carbon emissions is
Population
Energy Use CO2 Content CO 2 Emissions =
134 lbs CO 2 / MMBtu
35% decrease

X
2005:
6.4 B
Growing population

X
72 MBTU / person
Rising living standards

28 GT CO2
Carbon emissions stabilization

2030:

8.4 B

86 MBTU / person

89 lbs CO2 per MMBtu

28 GT CO2

to increase the use of cleaner fuels and improve efficiencies.

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At GE, We believe that innovation can solve the worlds toughest challenges. That belief motivates our people. It is why GE works. It is the basis for ecomagination.

ecomagination is

At GE, We believe that innovation can solve the worlds toughest challenges. That belief motivates our people. It is why GE works. It is the basis for ecomagination.

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ecomagi nation
(n.) GEs commitment to imagine and build innovative solutions that benefit our investors, customers and society at large.

It is : GEs Goal and Methodology GEs business strategy To create a new value for customers, investors and society by solving energy, efficiency and water challenges - today
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Mission
In 2005, GE launched ecomagination to address the need for :

More than

$105 B
generated
revenue to date

Cleaner and more-efficient source of energy Reduced emissions and Abundant sources of clean water

Since then, GE has been using its unique energy, technology, manufacturing and infrastructure capabilities to develop solutions

More than

140
products & solutions

Customer & Investor Value

Environmental Performance

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ecomagination Product Review (ePR)

To qualify for the ecomagination, product and solutions must significantly and measurably improve :
OPERATION Performance
Improved Value Proposition Improved Customer Competitiveness Lower Operating Cost

ENVIRONMENTAL Performance

Less Reliance on Fossil fuels Lower Emissions Higher Efficiency

ePR process ensures the offering meet necessary criteria and has clear, compelling and substantiated Life-Cycle Management (LCM). Verified by : GreenOrder, an LRN advisory group

1 October 2013

ecomagination is
Flight Management to reduce aircraft fuel consumption Wind turbines that will be able to power 1,000 homes each. Combined cycle power plant that reduce fuel cost

Aircraft engines that will be quieter and more energy efficient.

Compact fluorescent light bulbs that will cut energy consumption

Enhanced quality and improved productivity by energy-efficient healthcare equipment

The most fuel-efficient locomotive

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ecomagination Strategy
Bring exceptional value to investors and all stakeholders

equipment

services

GE

GE

customer
partners

Think Multi-Local
To be more external and global GE has to identify and understand the needs GE partners with local organization and institutions

Think Full Service

GE is creating full service solutions through a partners. GE is in the unique position to create business ecosystems, e.g. integrators company, financing and end user.

Think Beyond The Walls

Reaching beyond the walls to find the best ideas and partners, and funding them through our venture capital partner

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GE ecomagination commitments :

29%
Reduction in GHG emmissions and energy use

13.5%
Reduction in water use since 2010

$ 2.3B
Double investment in R&D

Engaged
Community & collaborative ideas JOB CREATION

$21B
Increase revenues in 2011

Building

Powering

Moving

Curing
1 October 2013

Lowering Emissions
Cross-functional team focus on optimizing energy use and fulfilling compliance obligations across GE global operations Employee engagement Lean manufacturing New technology Retrofitted Operations
GE Operational Energy Use

GE Operational GHG Emissions

7.2 5.1

60
48

32
Facilities decreased energy use by an 805,000 millionBTUs and GHG emissions by 125,000 MT CO2 (2004 adj. baseline)

2.09M
Metric-ton CO2 reduction (2004 adj.baseline

2004

2011

2004

2011

(million MMBtu)

(million metric-tons of CO2 equivalent)

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Saving Water
Exceeding our own goal for reducing freshwater use and improve water reuse
2008 20%
By 2015

2009 25%
By 2015

13.9B gal
2006

9.1B gal
2011

Reduction Target

Enhance water management for once-through cooling operations Implementation of Kaizen Blitz water reduction Water filter technology improvement

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Engage Community
Keep customer, stakeholders and communities engaged

Open Innovation at Work

$200million ecomagination Challenge Powering Your Home & Powering The Grid

unprecedented level of engagement

5,000
idea submissions

75,000
innovators

150
countries

150,000
voters

GE learned that accelerating open innovation across public, private and national borders can drive shared value for the company and its partners

1 October 2013

Engage Community
ecomagination Challenge has produced
22 new commercial partnership Acquisition of FMC-Tech, a smart grid technology Support young companies and entrepreneurs Key partnership include :

$134 million
Committed to new partners, to scale up and commercialize the best new ideas through

1 October 2013

Increase Revenues & Portfolio

GE Revenues from ecomagination product ($B)
13.3 16.9 18

20

21

10

12

2005

2006

2007

2008

2009

2010

2011

ecomagination product development

30
2006

15
2007

15
2008

17
In 2009

22
In 2010

34
In 2011
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Ecomagination products and solutions at work

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MOVING

RNP & TRUECOURSE CleanCore Engine Wash

Mobile system that will enable airlines to quickly and easily clean surface contaminant in engine component

LEAP & Passport Engine

Reduce fuel burn, noise and emissions

Required Navigation Performance and Troucourse to provide efficient flight paths, reduce fuel burn, reduce CO2 emissions, flight delay and improving aircraft performance

The AC44i locomotive

Generates fewer GHG emissions & lower operating costs 2 AC44i can replace 3 older locomotives & reduce the volume of annual CO2 emissions by more than 2,600 tons, in addition to saving more than 980,000 liters under typical operating conditions.

RNP

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POWERING
GE Transportations Durathon energy storage
Enables efficient and cost-effective storage, distribution and utilization of energy Longer life cycle, store more energy per unit weight, improved performance in extreme conditions

Safe and have minimal maintenance costs and less impact on the environment
Reliable backup power for hospitals, telecommunication and data centers

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CURING
GE Healthcares WAVE Bioreactor
For vaccine and biotherapeutics production

Enables cell culturing without requiring cleaning or steam sterilization

Reduce water and energy consumption and staff time requirements

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BUILDING

Advanced membrane technologies

Customized water recycling and purification Helps with regulatory compliance Minimizes environmental impact Tailored solutions for a wide variety of industries

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Thank you