Environmental and Social Impact Assessment Report (ESIA) Project Number: 50330-001 February 2018 INO: Rantau Dedap Geothermal Power Project (Phase 2) Prepared by PT Supreme Energy Rantau Dedap (PT SERD) for Asian Development Bank The environmental and social impact assessment is a document of the project sponsor. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of or any territory or area. ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT 250MW Rantau Dedap Geothermal Power Plant (Phase 1- 92MW) South Sumatra, Indonesia DRAFT FINAL 24 January 2018 2401 2018 Environmental and Social Impact Assessment and Management Plan EXECUTIVE SUMMARY DESCRIPTION OF PROJECT PT Supreme Energy Rantau Dedap (PT SERD) is a Joint Venture of Supreme Energy, Engie, and Marubeni to develop a geothermal power plant with 250MW (gross) installed capacity the Pojet crossing two regencies (Muara Enim and Lahat) and one city (Pagar Alam) in South Sumatra Province. The Project location is approximately 225 km from Palembang, the capital city of South Sumatra. PT “E‘Ds Geotheal Wokig Aea Peit oes the ‘atau Dedap geotheal pospet aea. Developing geothermal energy is of strategic importance to the Government of Indonesia (GoI) which targets to generate a total of new 35,000MW by 2025 of which 23% (8,100MW) are aimed to be from renewable resources. Of the total renewable energy by 2025 it is expected that geothermal energy will contribute about 80% (or 7,150MW). Phase 1 of project development is developing a power plant with a design capacity of 98.4MW gross (90.9MW net) using dual flash technology, a proven technology with reliability close to 100%. PT “E‘Ds eploatio oeed i , shotl afte sigig the Puhase Poe Ageeet (PPA). By 2013, a total of 4 wellpads (B, C, E, I), that are approximately 2 to 3 hectares in size each have been constructed and 6 wells have been drilled. Phase 1 energy generation is planned to commence (Commercially Operating Date COD) in 2020. By COD, 7 wellpads (addition of L, M, and X) will have been developed , approximately twenty-two wells for steam production and injection of brine and condensate will have been drilled. Supporting facilities include pipelines (production, injection and fresh water); access roads; Power Plant with office buildings and storage yard; water treatment facilities; GIS substation (built and operated by PT SERD); okes aoodatio oth duig ostutio ad opeatios; oete athig plant; disposal pits; explosive bunker; re-injection pipelines from access road to wellpad B; and associated facilities consisting of the substation in Lumut Balai and the transmission line connecting it from the power plant switchyard (built and operated by PLN) will have been developed. SIGNIFICANCE OF PROJECT IMPACTS This ESIA concludes that while the PT SERD project has potential adverse social and environmental impacts, they are few in number, site-specific, largely reversible, and readily addressed through mitigation measures (e.g., through developing a Biodiversity Action Plan). PT SERD can also reference and learn from numerous geothermal power plants built and operating in Indonesia since the 1970s with current production totaling about 1,200MW. STUDY OF ALTERNATIVES PT SERD considered feasible Project alternatives in the preliminary site assessment and project design, to avoid or minimize impacts and balance environmental, social and financial costs and benefits. No physical displacement (relocation of people or loss of shelter) is necessary though economic displacement of 157 households(100 households farming in protection forest and 57 households in Other Use / Private Land). Coal is the common alternative used to generate electricity across Indonesia. Because geothermal plants do not burn fuel to generate electricity, their emission levels are relatively low, releasing PT SERD ESIA 12 January 2018 i Environmental and Social Impact Assessment and Management Plan approximately 9% of the carbon dioxide emissions of a coal-fired plant of similar capacity. CO2- equivalent emissions for the PT SERD project Phase 1 are calculated at 43,827 tons/year. ENVIRONMENTAL DESIGN CRITERIA AND BEST AVAILABLE TECHNOLOGIES Compliance with applicable Indonesian regulations and standards is mandatory for the project. The project is also designed to conform to ADB Safeguard Policy Statements (SPS - 2009) as well as to IFC Environmental and Social Performance Standards (PS - 2012) - including the IFC General Environmental, Health, and Safety (EHS) Guidelines and IFC EHS Guidelines for Geothermal Power Generation of 2007 . Resource conditions allow the use of a dual-flash plant1. Substantially similar to a single-flash plant, a dual-flash plant is capable of capturing more energy from the same flow from the reservoir compared to a single-flash plant. Dual-flash and reinjection of brine water is considered Best Available Technology. In a dual-flash configuration, steam and hot brine water are separated. High Steam Pressure (HP stream) leaves the first separator to be directed to the turbine, while the hot brine water is directed to the second separator where a lower steam pressure (LP steam) is generated and directed to the second inlet of the turbine for additional power production. The increase in resource utilization however comes with a corresponding increase in plant complexity and cost. DESCRIPTION OF PHYSICAL, BIOLOGICAL, AND CULTURAL ENVIRONMENT Atmosphere Located near the Equator in a mountainous area of southern Sumatra, the project area is in a tropical wet climate with rain all year around, though October to May tend to be the wettest months. The rainiest months can average 4 meters of rainfall. Temperatures are also equatorial, seldom ranging outside 15° to 31°C. Wind speeds tend to be low averaging 2.4 to 3.3 m/s (based on observation and modelling by AECOM, 2016 and 2017). Dominant wind directions at the Power Plant are west- southwest, southeast and east-northeast. Lithosphere Erosion and flood hazards within the geothermal concession are generally rated low to moderate. Hydrosphere About one third of rainwater tends to flow as runoff, while the remaining balance infiltrates into surface soils dominated by weathered organic soils. Most underlying units are highly permeable as well, and hydrogeologically the area is known for good geothermal prospects/systems. Surface streams tend to flow permanently with moderate velocities. Surface water quality meets ambient standards; groundwater quality is also fairly good. In shallow wells used for domestic water supplies, water meets standards. 1 Flash steam plants take hot steam from deep inside the earth and used it to drive generator turbines. When the steam cools, it condenses to water and is injected back into the ground to be used again. Most geothermal powerplants are flash steam plants. PT SERD ESIA 24 January 2018 ii Environmental and Social Impact Assessment and Management Plan Biosphere The project affects 124.5 ha of land, most of which is classified as protected forest. The ecosystems and vegetation comprise forest and agriculture. The forest is classified as old secondary forest. The project is located at an altitude between 1,500 to 2,600 meters above sea level. Fauna and flora assessments indicate the presence of sensitive fauna. Social Sphere The project directly affects 5 small villages with a total population of around 6,500 people in Muara Enim and Lahat Regencies in South Sumatra. People in the region are mostly from the Basemah and Semendo ethnic groups, who are integrated into general Indonesian culture and participate in the mainstream economy. The majority of the community is Muslim. There are no Indigenous Peoples living in the area. The project is located mostly in a protected forest and the population in the region is low. The nearby communities have been farming parts of the area (coffee plantation). Farmers mainly grow rice and coffee as well as other food crops and fruit trees. Small-scale animal husbandry is also present. Most farmers are subsistence farmers, and only a small part of crop production is sold in the market, except for coffee. Field surveys suggest community support for the project, with some concerns about expectations for employment and business opportunities. ENVIRONMENTAL IMPACTS, MITIGATION AND OFFSET MEASURES In 2017, the project obtained government approval of its Environment Impact Assessment (AMDAL in the Indonesian Language) as the major environmental prerequisite for starting the project. AMDAL approval by the GoI also implies that the GoI considers environmental and social risks associated with the project as acceptable, and that the project is in regulatory compliance. The AMDAL has been approved and Environmental Permit has been received from AMDAL Central Committee (signed by the Minister of Environment and Forestry) on 15 March 2017. The AMDAL process, originally developed with assistance of the World Bank, allows for an integrated and comprehensive assessment of major and significant impacts likely to result from Project development (from exploration over construction and operation to decommissioning). While