Indonesia

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GENERATING DIALOGUECLEAN ENERGY, GOOD

GOVERNANCE AND REGULATIONby

Maritje HutapeaDirectorate General for Electricity and Energy Utilization

Ministry of Energy and Mineral Resources

Singapore,Singapore,17-18 March 200817-18 March 2008

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Indonesian Current Energy Condition

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Growth of Primary EnergyGrowth of Primary Energy

1970Oil : 88%Gas : 6%Coal : 1%Hydro : 5%Geothr : 0%

Average Growth of Primary Energy Average Growth of Primary Energy 1970-2006 = 7%/year

Source: DGEEU, 2005

Oil

Gas

Coal

Hydro

Geothermal

0.0

100,000.0

200,000.0

300,000.0

400,000.0

500,000.0

600,000.0

700,000.0

800,000.0

900,000.0

1970 1975 1980 1985 1990 1995 2000 2005 2006

Year

Tho

usan

d BO

E 2006 Oil : 46,9%Gas : 21,8%Coal : 23,5%Hydro : 2,4%Geothr : 5,5%

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TYPE OF ENERGY TYPE OF ENERGY RESOURCESRESOURCES POTENTIAL POTENTIAL UTILIZATIONUTILIZATIONINSTALLED INSTALLED CAPACITYCAPACITY

Large Hydro 845 million BOE 75,67 GW 6.851 GWh 4.200 MW

Geothermal 219 million BOE 27 GW 2.593,5 GWh 807 MW

Mini/Micro-hydro 500 MW 500 MW 207 MW

Biomass 49,81 GW 445 MW

Solar 4,80 kWh/m2/day 12 MW *)

Wind 3-6 m/second 1 MW *)

Uranium (Nuclear) 24.112 Tonne e.q. 3 GW for 11 years

Renewable Energy Potential Renewable Energy Potential

(2006)(2006)

*) 2007

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Final Energy Consumption 2006Final Energy Consumption 2006(Industrial Sector is the biggest final energy consumer)(Industrial Sector is the biggest final energy consumer)

SectorFinal Energy Consumption

(Thousand BOE)

Industry 213.692

Transportation 199.613

Household& Commercial

112.837

Total 526.142

Sectoral Final Energy Consumer 2006Transportation

38%

Industry

40,6%

Household & Commercial

21,4%Source: Statistic DGEEU 2006

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Rural Electrification Ratio (2006)Rural Electrification Ratio (2006)

Java, 23,639

Outside Java, 30,497

0

5000

10000

15000

20000

25000

30000

35000

2006

Villa

ge

Java Outside Java

97,91%

Indonesia

With electricity : 54.136 desa (79,46%) Without electricity : 13.995 desa (20,5%)

Electrified

69,33%

97.91%

2.09%

w/ electicity w/o electicity

69.33%

30.67%

w/ electricity w/o electricity

Java

Outside Java

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Electrification Ratio 2006 : 59% Electrification Ratio 2006 : 59%

Electrification Ratio Electrification Ratio

59

5452

43

30

35

40

45

50

55

60

65

1995 2000 2005 2006

Ele

ctr

ific

ati

on

Ra

tio

(%

)

Electrification Ratio

Customer: 33,1 million household

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Share of Electricity Production by

Type of Energy (2006)

Geothermal3%

Hydro8%

Coal37%

Gas20%

Oil57.8%

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Natural Gas, 28.57%

Coal, 15.34%

Oil51.66%

Geothermal, 1.32%

Hydro Power, 3.11%

Coal , 33%

Gas, 30%

Oil, 20%

BIOFUELS, 5%

Geothermal, 5%

Biomass, Nuclear, HydroSolar Energy, Wind Power, 5%

Coal Liquefaction 2%

RE,17%

CURRENT ENERGI MIX (1 million BOE) National (Primary) Energy Mix

OPTIMIZING ENERGY

MANAGEMENT

National (Primary) Energy Mix of 2025(BaU Scenario) (5 million BOE)

National Energy Mix 2025 (3 million BOE)(Presidential Decree No. 5/2006)

NATIONAL ENERGY POLICYNATIONAL ENERGY POLICY(PRESIDENTIAL DECREE NO. 5 YEAR 2006)(PRESIDENTIAL DECREE NO. 5 YEAR 2006)

Gas, 20.6%

Coal 34.6%

Oil, 41.7%

Geothermal, 1.1%

Mini/micro Hydro Power Plant, 0.1%

Power Plant, 1.9%

Target in 20251. Less than 1 for energy

elasticity2. Optimized primary

energy mix

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Renewable Energy Development

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TARGET OF RENEWABLE ENERGY TARGET OF RENEWABLE ENERGY IMPLEMENTATIONIMPLEMENTATION

Short-term : Small scale for fulfilling rural basic energy needs

Long-term : To substitute fossil energy in achieving energy sustainable development

In the year 2025 : At least 15% of the energy mix should be based on renewable energy (Based on National Energy Policy)

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NEW RENEWABLE ENERGY DEVELOPMENT PLAN(Based on the Blueprint of National Energy Management)

Jenis Energi Unit 2010 2015 2020 2025

Bio-diesel Kilo liter 1.160.000 3.000.000 11.800.000 4.160.000

Bio-ethanolBarel per

hari42.860 48.110 55.340 60.320

Bio oil Kilo liter 244.000 257.000 627.000 4.863.000

Biomassa : Waste

MW 30 60 120 200

Geothermal MW 1.320 4.340 5.090 5.270

Wind Power MW 10 40 80 160

Solar Energy MW 80 100 120 580

Microhydro MW 450 740 950 950

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RENEWABLE ENERGY UTILIZATIONSRENEWABLE ENERGY UTILIZATIONS

ElectrificationWater PumpingBattery ChargingRural Health Center RefrigeratorTelecommunicationSolar CookerWater HeaterAgriculture/Fishery Product DryingWater DistillationFuel for Transportation

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Replacing diesel power plant by using local energy Replacing diesel power plant by using local energy sources: micro hydro, solar PV, wind, biomass (stand sources: micro hydro, solar PV, wind, biomass (stand alone/or hybrid system)alone/or hybrid system)

Government and regional government provide budget Government and regional government provide budget for rural electrification for rural electrification rural consumers are obliged rural consumers are obliged to pay monthly payment depends on local conditions to pay monthly payment depends on local conditions

Establishing local institution in operation and Establishing local institution in operation and maintenance of the asset. maintenance of the asset.

☼☼ Rural Electrification Program

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☼☼ Rural Electrification Development

Development of isolated system in remote areas with the utilization of local energy resources, such as micro hydro, wind, solar PV, etc., through: Stand alone Hybrid system: Diesel-Solar PV, Micro hydro-Solar PV, Wind-

Solar PV.

Existing Renewable Energy Installed Capacity for Rural Electrification: Solar PV : 12 MW Micro hydro : 207 MW Wind : 1 MW Biomass : 150 kW

Target to be achieved in 2025 Rural Electrification 95%

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No Type of Energy Location UnitsInstalled Capacity

1

Solar

2146 kW

a. Solar Home System 29 Provinces 40,888 x 50 Wp

b. Solar Power Plant

- Riau, West Java, Central Java & East Java

4x18 kWp

- Bali 1x32 kWp

2 Mini/Micro-Hydro

- West Java 1x30 kW & 1x37 kW

1171 kW

- Banten 1x40 kW

- Central Java1x30 kW, 1x50 kW & 2x15 kW

West Sumatera 1x52 kW

Central Sulawesi (interconnected)

1x890 kW

3 Wind- North Sulawesi 2x80 kW

480 kW- Bali 4x80 kW

Total 3797 kW

☼☼ Rural Electrification Project in 2007

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☼☼ Rural Electrification Project in 2008

• Located in 29 provinces

• Consist of: solar energy : SHS (± 35,000 units @ 50 Wp) and

centralized solar PP (4 units @10 kW)

mini/micro-hydro (capacity: 20 – 500 kW)

wind energy (± 150 units @ 50 Wp)

Hybrid: wind-diesel and solar-diesel

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TARGET SSEV (Cumulative)

☼☼ Self-sufficient Energy Village (SSEV) ProgramSelf-sufficient Energy Village (SSEV) Program

• SSEV is a village having capability to produce a part/whole their energy demand for consumptive and productive use.

• CRITERIA– Utilization of locally available energy (renewable energy)– Creation of productive activities– Job creation

• PROGRAM:– Utilization of locally available energy resources– Development of productive activities– Development of applicable technologies– Development of institution and people participatory

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TARGET SSEV (Cumulative)

☼ ☼ Self-sufficient Energy Village TypeSelf-sufficient Energy Village Type

SELF-SUFFICIENT ENERGY VILLAGE

NON BIOFUEL-BASED• Micro-hydro

• Wind Turbine

• Solar Energy

• Biogas

• Biomass

BIOFUEL-BASED• Jatropha Curcas

• Coconut

• Palm

• Cassava

• Sugar Cane

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TARGET SSEV (Cumulative)

Program 2007 2008 2009

Biofuel-based SSEV 100 500 1000

Non-biofuel-based SSEV 100 500 1000

☼ ☼ Target of SSEV ImplementationTarget of SSEV Implementation

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Barrier & Strategy

in Developing Renewable Energy

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BARRIERS TO RENEWABLE ENERGY BARRIERS TO RENEWABLE ENERGY DDEVELOPMENTEVELOPMENT

High investment cost high production cost renewable energy cannot compete conventional energy

Lack of incentive and funding mechanism Lack of knowledge, awareness Lack of domestic industry’s capability to produce

renewable energy technology

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Law & Regulation

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POLICIES AND REGULATIONSPOLICIES AND REGULATIONS1. Energy Law

(Law No. 30/2007)

2. Geothermal Law (Law No. 27/2003)

3. Green Energy Policy (Ministerial Decree: No. 0002/2004)

4. Supply and Utilization of Biofuel (Presidential Instruction No. 1/2006)

5. Regulation on Electricity Supply and Utilization (Government Regulation No. 03/2005)

6. Small Distributed Power Generation using Renewable Energy (Ministerial Decree: No. 1122 K/30/MEM/2002)

7. Medium Scale Power Generation Using Renewable Energy (Ministerial Regulation No. 002/2006)

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Issued in 2007 that pay attention on renewable energy development and regulates such as: Government and local government should

increased the utilization of renewable energy;

Government and local government should provide incentives for renewable energy developers for certain period of time.

Energy Law Energy Law (Law No. 30/2007)(Law No. 30/2007)

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Geothermal LawGeothermal Law(Law No. 27/2003)(Law No. 27/2003)

To regulate the management and development of geothermal energy sources for direct and indirect utilization

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Green Energy PolicyGreen Energy Policy (Ministerial Decree: No. 0002/2004)(Ministerial Decree: No. 0002/2004)

Renewable Energy and ConservationEnergy Development Policy:

Green Energy Policy: Implementing the maximum utilization of

renewable energy Efficient utilization of energy Public awareness in energy efficiency

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Presidential Instruction Presidential Instruction on Biofuel Developmenton Biofuel Development

(Presidential Instruction No. 1/2006)(Presidential Instruction No. 1/2006)

• Objective: Accelerating biofuel utilization for fossil (especially oil) substitution

• Instructions to 13 Ministers, Governors and Mayors to take necessary initiatives and actions for biofuel development from supply (feedstock) side until consumption/commercialization side

• Coordinated by Coordinator Minister of Economic

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Regulation on Regulation on Electricity Supply and UtilizationElectricity Supply and Utilization

(Government Regulation No. 03/2005)(Government Regulation No. 03/2005)

Regulating the supply and utilization of electricity

Prioritizing utilizing renewable energy for power generation

Renewable Energy for Power Generation without bidding process

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Small Distributed Power Generation Small Distributed Power Generation using Renewable Energyusing Renewable Energy

(Ministerial Decree: No. 1122 K/30/MEM/2002)(Ministerial Decree: No. 1122 K/30/MEM/2002)

Developer : Small Enterprises

Capacity : < 1 MW

Electricity Price by Utility :

60% x Utility’s Production Cost, if connected to the low voltage grid

80% x Utility’s Production Cost, if connected to the medium voltage grid

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Medium Scale Power Generation Medium Scale Power Generation using Renewable Energyusing Renewable Energy

(Ministerial Regulation : No. 002/2006)(Ministerial Regulation : No. 002/2006)

Developer : Business Entity Capacity : 1 < Cap ≤ 10 MW Electricity Price by Utility :

60% x Utility’s Production Cost, if connected to the low voltage grid

80% x Utility’s Production Cost, if connected to the medium voltage grid

Purchase Contract : 10 years and could be extended

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