Energy security is a big concerns of almost every country. Most of countries, like Indonesia, relies on petroleum oil as main energy source. As a big population country, demand energy and resources will increase in Indonesia. In addition, the issue concerning climate change, pollution, and improving life quality for people encourage us to seek alternatives of fossil fuel.
Indonesia is facing a long-term problem: energy shortage. Dahlan Iskan (ex-CEO of State-owned Power Company, PLN) also admitted the country’ supply of electricity is very limited. PLN has encountered power shortages in 250 regions, including 243 location in eastern Indonesia (source). The reason of power shortage in some areas is due to inadequate transmission and distribution infrastructure (source).
Total energy consumption in Indonesia per capita remains low. In 2009 it reached 0.8 toe compared to world average of 1.8 toe (source).
Indonesia has a wide variety of energy resources, including fossil and non-fossil resources. The major energy resource fueling Indonesia’s economy is oil, providing 32% of total. Biomass came second with 27% particularly in the more remote areas that lack to Indonesia’s energy transmission network, while coal accounted 19% to fuel new power generation, gas for 18%, and primary electricity (hydroelectricity, geothermal) for 4% (source).
Electricity consumption per capita is very low and reached 570 kWh in 2009, compared with a world average of 2500 kWh. Energy consumption has increased by more than 8.5% per year since 1990, more rapidly than total energy consumption. It is due to the use of electricity in all sectors and the increase in the country’s electrification rate (source).
Net Importer of Oil
Indonesia is currently a net importer of crude oil and refined product. Indonesia is the only OPEC member (Organization of Petroleum Exporting Countries) that is the net oil importer. Its oil production has declined over the years owing to ageing of oil fields and lack of investment in new equipment.
Indonesia is ranked eighth in world gas production with proven reserves of 108 trillion cubic feet in year 2010. This ranks eleventh in the world and the largest in Asia Pacific region. Gas reserves are equivalent to three times Indonesia’s oil reserves and can supply the country for 50 years at current production rate (source).
Clean Energy Regulatory Framework
The energy sector in Indonesia is dominated by four key policies and objectives:
- Diversification: to reduce dependence on oil by expanding the use of coal, gas, and renewable energy resources
- Rational energy pricing: no longer sustain uniform pricing for electricity and petroleum products across country, and it has begun to eliminate subsidies
- Energy sector reform: the combination of decentralization of government decision-making to give greater involvement to regional authorities
- Rural electrification: bring electricity to 90% of population by 2020
The energy law no. 30/2007 provides a renewed legal framework for the overall energy sector with emphasis on economic sustainability, energy security and environmental conservation. National Energy Council (DEN) was established under this law with the task:
- formulating and implementing national energy policy
- determining national energy general plan
- planning steps to overcome any energy crisis or emergency (source)
The national energy policy is the overall management of energy and will address issues such as:
- the availability of energy to meet the nation’s requirements
- energy development priorities
- utilization of national energy resources
- national energy buffer reserves (source)
The basis of renewable energy development in Indonesia is Presidential Regulation No. 5/2006. It sets national energy targets for an optimal energy mix in 2025:
- less than 20% from oil
- more than 30% from gas
- more than 33% from coal
- more than 5% from biofuel
- more than 5% from geothermal
- more than 5% from other renewables, especially biomass, nuclear, micro-hydro, solar, and wind
- more than 2% from liquefied coal
Potential of Renewable Energy Resources
Renewable energy resources have been largely unexploited due to the perceived high up-front cost and lack of infrastructure to match supply with demand (source).
|Fluid||Description||Pressure Drop (kN/m2)|
|1-10 mN s/m2||50-70|
|Gas and Vapor||High vacuum||0.4-0.8|
|Medium vacuum||0.1 x abs pressure|
|1-2 bar||0.5 x system gauge pressure|
|Above 10 bar||0.5 x system gauge pressure|
Indonesia has significant geothermal reserves (around 40% of the world’s reserves) and the potential to produce 27,710 MW of electricity. However only 1,200 MW of power capacity has been built.
Based on the National Power General Plan and Presidential Regulation No. 5/2006 the contribution of renewable energy is to increase from its current 5% to 17% of the total energy consumption in 2025. Geothermal is expected to account for 5% of the contribution of renewable energy with a target 9,500 MW by 2025 (source).
Solar energy in Indonesia is quite large and reaches 4-5 kWh/m2, but the efficiency of solar photovoltaic cell has only reached 10%. Since investment cost of solar PV is very high although fuel cost is zero, the electricity generation from solar energy is less competitive compared to other energy. However solar energy in the form of solar home system will be utilized in remote areas where no other alternative sources for electricity generation (source).
Electricity generation potential from the roughly 150 Mt of biomass residues produced per year to be about 50 GW or equivalent to 470 GJ/year roughly (assuming the main source of biomass energy in Indonesia will be rice residues with a technical energy potential of 150 GJ.year, source). Other potential biomass sources are rubber wood residues (120 GJ/year), sugar mill residues (78 GJ/year), and palm oil residues (67 GJ/year).
Indonesia has abundant hydropower resources and has been successful in developing micro, mini, small, and large hydropower plants over the past decades. Small hydro potential is distributed around islands, can be developed as local energy resources especially in remote areas for rural independent power supply.