Business analysis of implementation of UCG technology in Indonesia

Abstract

There is a deep-seated coal potency with a depth more than 100 meters below surface in Indonesia that has not been exploited yet. Underground Coal Gasification (UCG) is an unconventional technology that can become the solution to exploit the deep-seated coal potential by extracting coal into in-situ gas that can be converted to electricity or chemicals. Based on business analysis, this paper aims to analyze the implementation of UCG technology in Indonesia, whether it is potential or not. Data are collected from literature and analyzed using Porter Five Forces and PESTLE Analysis. The Porter Five Forces analysis shows that the implementation of UCG in Indonesia is still potential as an industry because the only threat will come from substitute products. PESTLE analysis shows that almost all the factors, except for technology, are very supportive of implementing UCG commercial plants in Indonesia. Based on both studies, it can be concluded that the UCG project is very potential to be developed in Indonesia. However, it needs full support and control from the government because it will become a pioneer project with financial and environmental risk still has not quantified ideally.