Indonesian Energy Policy in Supporting the Implementation ...energy-indonesia.com/03dge/01.pdf · Indonesian Energy Policy in Supporting the Implementation of RE and Energy Conservation

Indonesian Energy Policy

in Supporting the Implementation of RE and

Energy Conservation

Presented at EBTKE Conex 2012 Panel Discussion Progressive Policies to Support RE and Energy Conservation

Jakarta, 17 July 2012

Herman Darnel Ibrahim Adjunct Prof. [UNITEN, Malaysia] Dr. [ITB, Indonesia], M.Sc. [UMIST, UK], Ir. [ITB]

Member of National Energy Council, Indonesia

Address of Energy Law and the Government Commitment

Energy Law No 30-2007: Vision “Ketahanan Energy Nasional], Prioritize Renewable Energy and Environmentally Friendly Energy

President Commitment to the International society that Indonesia will voluntarily reduce its CO2 emission .

Establishment of Directorate General of Renewable Energy, New Energy and Energy Conservation under MEMR.

Jakarta, 17 July 2012 by HDI 2 RE Policies EBTKE Conex 2012

Energy Change Scenario: Grow the GDP and Lower the Rate of Energy Services and Intensity

The Basic Equation for Energy Conservation [by Kaya 1989]:

E = [E/ES] * [ES/GDP] * [GDP/P] * P

E = Energy [TOE per year]

ES = Energy Services [e.g. capita km per year]

GDP = Gross Domestic Product [Rp per year]

P = Population

Low Carbon Energy Portfolio

To Combat Global Warming

Low Carbon Energy

P1:No [Low] Carbon Energy Sources

Renewable Energy [No Carbon] Hydro, Geothermal, Solar, Wind, Ocean

Nuclear Energy [Very Low Carbon]

P2: Fossil Energy Sources + Efficient Technology

P 4: Carbon Capture and Storage [CCS]

P3: DSM Use Energy More Efficiently

Cogeneration [50% reduced] Combined Cycle GT [30% reduced] Supercritical Boiler [15% reduced] ICGCT [Coal Gasification]

Labeling of Appliances Energy Efficient Industry Energy Efficient Transport Energy Efficient Building Forestry

Absorbing Carbon Technology Development

Reduce Carbon 80%-90%


Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 5

10 20 30 40 50

Moderate 131 238 426 669 987

High 131 264 524 831 1166

0

200

400

600

800

1000

1200

1400

MT

OE

Primary Energy

Growth M

Growth H

% 6.2 6.0 4.6 4.0

% 7.3 7.1 4.7 3.4

10 20 30 40 50

Moderate 102 180 310 485 690

High 102 199 381 603 815

0

100

200

300

400

500

600

700

800

900

MT

OE

Final Energy

Growth M

Growth H

% 5.8 5.6 4.6 3.6

% 6.9 6.7 4.7 3.1

PE Consumption per Capita in 2030: 1.5 TOE, World Average in 2006 1.64 TOE. PE Consumption Per Capita in 2050: 3.2 TOE, OECD Average in 2006:~ 4.7 TOE

Final and Primary Energy Consumption to 2050


Approximate of Energy Supply Capability to 2050

Copyright ® H Darnel Ibrahim

Reserve

[C]

Resource

[S]Unit

Quantity UnitMTOE PE Eq. MWe

1. Renewable Energy

1.1 Biomass [Biofuel] 30 175 10^6 kliter 158 MTOE/Year 95 NA

1.2 Geothermal 2300 28000 Mwe 95 MTOE/Year 85 25200

1.3 Hydro 6000 75000 MWe 40 MTOE/Year 24 45000

1.4 Ocean NA 240 GWe 109 MTOE/Year 5.4 12000

1.5 Solar NA 1200 GWe 176 MTOE/Year 18 120000

1.6 Biomass [Waste] NA 50000 MWe 91 MTOE/Year 55 30000

1.7 Other RE NA 10000 MWe 16 MTOE/Year 4.8 3000

2. Fossil Energy

2.1 Oil 7990 56600 10^6 Barrel 9430 MTOE 5298 NA

2.2 Coal 21130 104940 10^6 Ton 63078 MTOE 26324 NA

2.3 Natural Gas 159.6 334.5 TCF 12460 MTOE 8242 NA

2.4 CBM 0 453.3 TCF 11431 MTOE 2286 NA

3. Total 1.1-1.7 [RE] 684 286 235200

4. Total 2.1-2.5 96399 42151 NA* Most of the data is from Ministry of Energy and Mineral Resources

Supply Capability

No Energy Source

Reserve and Resource* Total Potential


Characteristic of Indonesian Renewable Energy

Among all renewable energy sources only geothermal and biomass has the base load capability.

No Description Geo-

thermal Hydro Solar Wind Ocean

Biomass Waste

Biomass Biofuel

1 Potential 28 GWe 75 GWe 1200 GWe

9GWe240 GWe

50GWe 175 M

kiloliter

2 Supply Capability 25 GWe 45 GWe 120 GWe 9 GWe 12 GWe 30 GWe 95

MTOE

3Availability and Base Load Capability

Continuous [Base

Load]

Seasonal [Semi Base Load]

Intermittent [Low Density]

Intermittent

[Low Density]

Intermittent

[Low Density]

Continuous

[Base Load]

Affected by

Weather

4 Capacity ScaleMedium

to BigSmall to

BigSmall to Medium

Small to Medium

Small Medium NA

5Technology Readiness

Ready Ready Ready Ready RnD Ready Ready

6 Investment CostMedium

HighLow

MediumHigh

Medium High

High Medium NA

7Production Cost USD per MWh*

50-80 30-120 200-500 50-140 NA 50-120 NA

*Source: REN21 Renewables 2010 Global Status Report


2010 2020 2030 2050 2100

Energy Mix:

Biomass Biofuel MTOE 0.6 3.1 9.9 55.5 68.4

Biomass Waste MTOE 0.0 5.8 24.8 47.6 52.6

Biomass Solid MTOE 1.3 0.8 0.3 0.1 0.1

Geothermal MTOE 3.0 12.3 40.0 85.0 110.5

Hydro Electricity MTOE 1.0 3.1 10.1 24.0 26.4

Ocean Electricity MTOE 0.0 0.3 1.1 8.5 14.1

Solar Electricity MTOE 0.0 0.4 2.9 18.0 19.8

Other New Energy MTOE 0 0 0 3 4

Sub Total RE MTOE 6.0 25.8 89.5 241.2 296.2

Fossil Oil MTOE 64 55 87 150 148

Fossil Gas MTOE 28 56 93 152 182

Fossil Coal MTOE 34 103 156 444 539

Primarry Energy Total MTOE 131 239 426 987 1166

Ratios:

Ratio Final to Primary Energy % 77.8 75.3 72.7 69.9 68.6

Ratio Electricity to Final Energy % 12.5 15.8 19.7 27.4 29.5

Ratio RE in Final Energy % 2.0 5.8 12.2 19.6 20.7

Ratio RE in Primary Energy % 4.6 10.8 21.0 24.4 25.4

Ratio Liquid Fuel in Final Energy % 63.0 32.0 31.3 29.8 27.1

Share Petoleum in Primary Energy % 48.5 22.8 20.5 15.2 12.7

YearDescription Unit

Projection of Energy Mix and Energy Ratios

Future Energy Strategy and Policy Toward 2050


Paradigm shift: We are not rich in energy and Energy is a development modality [not the export commodities]

For the long term energy security: be conservative with the export of coal and gas.

Prioritize the development of modern energy access to the rural and the poor [~100% electrification by 2020].

Energy Conservation: Enhance Energy Efficiency Supply Side and Demand Side.

Energy Mix Policy: Balance of 3 factors, supply security, environment [low carbon], and economy of energy cost.

Energy Mix Strategy: Maximize RE, Minimize Oil, use Coal and Gas as Backbone and Nuclear the Last Choice.

Set the energy price at its economy, Subsidize people not the energy commodity [oil and electricity by 2014].

New Energy Policy Supporting RE and EC: General Policy


Paradigm shift: Indonesia is not an energy rich country and energy is a development modality [not the source of direct income or export commodities]

Energy Mix Strategy: Maximize RE, Minimize Oil, use Coal and Gas as Backbone and Nuclear the Last Choice.

Energy Conservation: Enhance Energy Efficiency Supply Side and Demand Side.

Energy Mix Policy: Balance of 3 factors, supply security, environment [low carbon], and economy of energy cost.

RE Target in Energy Mix: RE share in energy mix at least 25 % by 2025 and 40% by 2050.

New Energy Policy Supporting RE and EC: Renewable Energy Role


The exploitation of hydro, geothermal, ocean and wind energy will be prioritized for electricity generation.

The priority of the solar energy exploitation is for electricity generation and direct heating.

The priority of the biomass waste energy exploitation is for electricity generation and producing biogas.

The exploitation of biomass plantations energy will be prioritized to produce bio fuel [liquid fuel].

The exploitation of biomass plantation energy will be managed by enhancing the food security.

The intensification of solar energy utilization is by assuming that all solar system component will be produced locally.

New Energy Policy Supporting RE and EC: Energy Conservation


Energy conservation will be from up stream to downstream , from resources, production, transportation, distribution and utilization at demand side.

Resources conservation will be implemented through cross sector approach that includes the land use or spatial plan and the environmental consideration.

Large energy producer and consumers will be obliged to implement energy efficiency and conservation through their activities.

Government shall set a guidelines and regulation for energy conservation covering energy standard and labeling of appliances, and regulation on energy conversion machinery.

New Energy Policy Supporting RE and EC: RE Market and Pricing


Energy price will have to be set based on its economic value that reflect the production cost, environment and conservation costs and a fair profit margin.

RE pricing is regulated assuming that it is competitive to the un-subsidized price of petroleum based energy, or a rational RE pricing for local sources for providing supply security.

The government will have to promote a larger RE development by implementing such a Feed in Tariff mechanism [Mandate Price] for electricity generated from RE sources.

Government will have to regulate RE market that includes the minimum RE quota [Mandate Quota] for electricity, liquid fuel and gas produced from RE sources.

If the RE pricing [cost recovery] is greater than the unsubsidized petroleum based energy government may subsidize the RE.

New Energy Policy Supporting RE and EC: RE and LCE Subsidy and Fiscal Incentive


Government will have to remove the petrol and electricity subsidy [gradually and sooner is better] that may increase the competitiveness of RE and low carbon energy [LCE]

Government will have to provide a special fiscal and non fiscal incentive for RE development. The incentive will be provided until RE become competitive to the conventional energy.

Government will have to provide such incentive for those energy producers and consumers, who implementing energy efficiency and conservation in their activities.

Government will have to provide such incentive for [parties or those who implement the development of core technology on RE.

Government will have to establish and enhance the role of the national banks for funding the RE development program and energy efficiency and conservation program.

New Energy Policy Supporting RE and EC: Recommended Actions


There three key factors affecting the successful of RE development implementation: RE project identification and preparation; pricing regulation [FiT], and funding for smaller projects.

Government through DG RNEEC [EBTKE] should carry out an overall RE prefeasibility study in order to have RE potential inventory and its economic map. Allocate adequate fund for this.

Set a more realistic RE target based on that credible RE potential studies by type of RE and by region. [With the current status 25 % RE share in primary energy mix by 2025 seems too high].

Improve RE pricing regulation by applying a true and bankable Feed in Tariff. Plan and provide adequate subsidy to support the achievement of RE target.

Establish a cheaper, easier to proceed and adequate RE funding especially for small scale RE projects.


Terima Kasih Thank You for Your Attention

DEN WEB site: www.den.go.id Email: [email protected]

http://www.den.go.id/

http://www.den.go.id/

mailto:[email protected]


Herman is a Member of National Energy Council of the Republic of Indonesia representing the Renewable Energy Industry Stakeholder. He is a Non Committal Energy Consultant to ADB and others, and is a Visiting Professor at University Tenaga Nasional Malaysia. He also serves as the BoD Member of International Geothermal Association [IGA], Chairman of Western Pacific Regional Branch of IGA, and Vice Chairman of Expert Board of

Indonesian Renewable Energy Society [METI], Advisory Board of Indonesian Power Society [MKI], Chairman of Advisory Board of ITB School of Electrical Engineering and Informatics. He was the President of Indonesia Geothermal Association [2001-2004] and was the BoD Member of Indonesian Gas Association [1998-2001]. Herman got his First Degree in Electrical Engineering from Bandung Institute of Technology [ITB], M.Sc. Degree in Electrical Power System from the University of Manchester, UK, and PhD Degree in Energy Policy for Power System Development from ITB Bandung. Until 2008 he worked with PLN for almost 30 years. He achieved senior management position at the company as Director Transmission and Distribution [2003-2008], Director of PT. Indonesia Power, a subsidiary of PLN [1998-2003], President Director of PT. Cogindo DayaBersama, a subsidiary of PT Indonesia Power [1998-1999].

Biography of Herman Darnel Ibrahim Member of DEN, The Indonesian National Energy Council

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Indonesian Energy Policy in Supporting the Implementation ...energy-indonesia.com/03dge/01.pdf · Indonesian Energy Policy in Supporting the Implementation of RE and Energy Conservation