Indonesian Energy Policy in Supporting the Implementation of RE and Energy Conservation

Herman Darnel Ibrahim

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

Member of National Energy Council, Indonesia

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

Jakarta, 17 July 2012

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

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

P1:No [Low] Carbon Energy Sources P2: Fossil Energy Sources + Efficient Technology
P3: DSM Use Energy More Efficiently

Renewable Energy [No Carbon] Hydro, Geothermal, Solar, Wind, Ocean Nuclear Energy [Very Low Carbon] 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 Technology Development Reduce Carbon 80%-90%
4

To Combat Global Warming

Low Carbon Energy

Forestry Absorbing Carbon

P 4: Carbon Capture and Storage [CCS]

RE Policies EBTKE Conex 2012

Jakarta, 17 July 2012 by HDI

Final and Primary Energy Consumption to 2050

900 800 700 600 500 400 300 200 100 0

Final Energy

1400

Primary Energy

1200
1000 MTOE

MTOE

800
600

400
200 20 180 199 30 310 381 40 485 603 50 690 815 10 Moderate 131 High 131

10 Moderate 102 High 102

20 238 264

30 426 524

40 669 831

50 987 1166

Growth M Growth H

% %

5.8 6.9

5.6 6.7

4.6 4.7

3.6 3.1

Growth M Growth H

% %

6.2 7.3

6.0 7.1

4.6 4.7

4.0 3.4

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
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Approximate of Energy Supply Capability to 2050

Reserve and Resource* No 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2. 2.1 2.2 2.3 2.4 3. 4. Energy Source Renewable Energy Biomass [Biofuel] Geothermal Hydro Ocean Solar Biomass [Waste] Other RE Fossil Energy Oil Coal Natural Gas CBM Total 1.1-1.7 [RE] Total 2.1-2.5 Reserve Resource [C] [S] 30 2300 6000 NA NA NA NA 7990 21130 159.6 0 Unit Total Potential Quantity 158 95 40 109 176 91 16 9430 63078 12460 11431 684 96399 Unit MTOE/Year MTOE/Year MTOE/Year MTOE/Year MTOE/Year MTOE/Year MTOE/Year MTOE MTOE MTOE MTOE Supply Capability MTOE PE Eq. MWe 95 NA 85 25200 24 45000 5.4 12000 18 120000 55 30000 4.8 3000 5298 NA 26324 NA 8242 NA 2286 NA 286 235200 42151 NA
Copyright H Darnel Ibrahim Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 6

175 10^6 kliter 28000 Mwe 75000 MWe 240 GWe 1200 GWe 50000 MWe 10000 MWe 56600 10^6 Barrel 104940 10^6 Ton 334.5 TCF 453.3 TCF

* Most of the data is from Ministry of Energy and Mineral Resources

Characteristic of Indonesian Renewable Energy

No Description 1 2 3 Potential Supply Capability Availability and Base Load Capability Capacity Scale Technology Readiness Investment Cost Production Cost USD per MWh* Geothermal 28 GWe 25 GWe Continuo us [Base Load] Hydro 75 GWe Solar 1200 GWe Wind 9GWe Ocean 240 GWe Biomass Biomass Waste Biofuel 50GWe

45 GWe 120 GWe Seasonal Intermitt [Semi ent [Low Base Density] Load]

175 M kiloliter 95 9 GWe 12 GWe 30 GWe MTOE Intermit Intermit Continu Affected tent tent ous by [Low [Low [Base Weather Density] Density] Load] NA Ready NA NA

4 5 6 7

Medium Small to Small to Small to Small Medium to Big Big Medium Medium Ready Ready Ready High Ready Medium High RnD High NA Ready Medium 50-120

Medium Low High Medium 50-80

30-120 200-500 50-140

*Source:

REN21 Renewables 2010 Global Status Report

Among all renewable energy sources only geothermal and biomass has the base load capability.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 7

Projection of Energy Mix and Energy Ratios

Description Energy Mix: Biomass Biofuel Biomass Waste Biomass Solid Geothermal Hydro Electricity Ocean Electricity Solar Electricity Other New Energy Sub Total RE Fossil Oil Fossil Gas Fossil Coal Primarry Energy Total Ratios: Ratio Final to Primary Energy Ratio Electricity to Final Energy Ratio RE in Final Energy Ratio RE in Primary Energy Ratio Liquid Fuel in Final Energy Share Petoleum in Primary Energy
Jakarta, 17 July 2012 by HDI

Unit MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE MTOE % % % % % %

2010 0.6 0.0 1.3 3.0 1.0 0.0 0.0 0 6.0 64 28 34 131 77.8 12.5 2.0 4.6 63.0 48.5

2020 3.1 5.8 0.8 12.3 3.1 0.3 0.4 0 25.8 55 56 103 239 75.3 15.8 5.8 10.8 32.0 22.8

Year 2030 9.9 24.8 0.3 40.0 10.1 1.1 2.9 0 89.5 87 93 156 426 72.7 19.7 12.2 21.0 31.3 20.5

2050 55.5 47.6 0.1 85.0 24.0 8.5 18.0 3 241.2 150 152 444 987 69.9 27.4 19.6 24.4 29.8 15.2

2100 68.4 52.6 0.1 110.5 26.4 14.1 19.8 4 296.2 148 182 539 1166 68.6 29.5 20.7 25.4 27.1 12.7
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RE Policies EBTKE Conex 2012

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].
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 9

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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 10

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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 11

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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 12

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 unsubsidized 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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 13

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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 14

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.
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 15

Terima Kasih Thank You for Your Attention

DEN WEB site: www.den.go.id Email: hermandarnel@den.go.id

Jakarta, 17 July 2012 by HDI

RE Policies EBTKE Conex 2012

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Biography of Herman Darnel Ibrahim

Member of DEN, The Indonesian National Energy Council
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].
Jakarta, 17 July 2012 by HDI RE Policies EBTKE Conex 2012 17