Indonesia National Energy Planning 2006. Current Condition Consumption rate is quite high to drive the economics of the country average increasing rate/year.

Indonesia National Energy Planning

2006

Current Condition

Consumption rate is quite high to drive the economics of the country average increasing rate/year = 7%

Fossil Reserved is limited, however production rate is maintained because of high demand of domestic needs

High potential of renewable energy, yet no optimal use

Energy diversification is not optimal imbalance energy mix

Energy Efficiency potential is high in every sector, no optimal use high energy intensity level (about 1.8)

Low ratio of electrification Low ratio of electrification 54% in year 2004 54% in year 2004

Increased domestic energy price in line with the trend of Increased domestic energy price in line with the trend of world energy priceworld energy price

The high demand of domestic energy (In indonesia, The high demand of domestic energy (In indonesia, energy – in particular electricity – is still public goods, energy – in particular electricity – is still public goods, government is obliged to secure electricity supply government is obliged to secure electricity supply

Fossil fuel consumption has to be decreased, mainly Fossil fuel consumption has to be decreased, mainly because the price is increased while reserve is because the price is increased while reserve is decreaseddecreased

Diversification energy has to be done, yet the Diversification energy has to be done, yet the investment condition has not support this policyinvestment condition has not support this policy

Energy conservation – in particular energy efficiency – Energy conservation – in particular energy efficiency – need to be encouraged more (avoid conflict with need to be encouraged more (avoid conflict with another policy with is intensification of fossil energy another policy with is intensification of fossil energy exploration exploration

Domestic Problems

Energy Security is the main problem, policies need to be build to over come this problem

ChallengeChallenge

SECURITY OF SUPPLYSECURITY OF SUPPLY

Increased fossil fuel reserved by exploring new wells

Speed-up the energy diversification efforts

Encouraging energy conservation

Three Existing Energy PoliciesThree Existing Energy Policies

INCONSISTENCY OF POLICIES???INCONSISTENCY OF POLICIES???

Electricity GenerationElectricity Generation TransportTransport IndustryIndustry House hold and House hold and CommercialCommercial

Type of Type of EnergyEnergy

CoalCoal Coal LiquefactionCoal Liquefaction CoalCoal Coal BriquetteCoal Briquette

GasGas GasGas Gas Gas Gas KotaGas Kota

LPGLPG LPGLPG LPGLPG

Synthetic fuel (GTL)Synthetic fuel (GTL)

Fuel CellFuel Cell Fuel CellFuel Cell Fuel cellFuel cell Fuel CellFuel Cell

Bio DieselBio Diesel Bio Fuels (bio diesel, Bio Fuels (bio diesel, bio ethanol, bio oil)bio ethanol, bio oil)

Bio fuelsBio fuelsBio massBio mass

Bio fuels Bio fuels

Bio gasBio gas

SolarSolar

GeothermalGeothermal

ElectricityElectricity ElectricityElectricity ElectricityElectricity

Micro HydroMicro Hydro

DME (DME (Dimethyl EtherDimethyl Ether))

WindWind

Energy In SituEnergy In Situ

NuclearNuclear

Alternative Energy (Government Definition)

Coal2%

Oil20%

Gas30%

Bio Fuels5% Geothermal

5%

Hydro2.61%

Coal33%

Other5%

Wind0.0301%

Fuel Cell0.00%

Biomass0.7417%

Nuclear1.4032%

2004Oil : 53%Gas : 19%Coal : 21%Hydro : 4%Geothermal

: 3%

2025 Target on National Energy-Mix

Perpres No. 5 Tahun 2006

Projection of Indonesia Primary Energy (With and Without Energy Conservation)

-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

Ju

ta S

BM

Skenario Tanpa Konservasi Skenario RIKEN

Notes:

Juta SBM = Million Barrels Oil Equivalent

Skenario Tanpa Konservasi = Without Conservation Scenario

Skenario RIKEN = With Conservation Scenario

Planning on Energy-mix for Electricity Generation

42% 47%

60%70% 71%

19%

24%

20%

14% 12%

5%

6%

6% 7%

9%

9%

8%8% 8%

24%15%

6% 2% 2%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010

Coal Gas Geothermal Hydro Oil / Fuel

Energy Difersification for Domestic Sector (Household Sector)

0

50

100

150

200

250

300

350

400

Mill

oin

Bar

rels

Oil

Eq

.

Baseline Diversification

0

50

100

150

200

250

300

350

400

Baseline Diversification

Mil

lio

n B

arre

ls O

il E

q.

Electricity Gasoline LPG City Gas Brickets

Energy Diversification for Industrial Sector

0

100

200

300

400

500

600

700

800

900

1000

Mill

ion

Bar

rels

Oil

Eq

.

Baseline Diversification

0

500

1000

1500

2000

2500

Baseline Diversification

Mil

lio

n B

arre

ls O

il E

q.

Electricity Coal Gas Oil LPG Coal Total for Industry

Energy Diversification for Transportation Sector

0

100

200

300

400

500

600

700

Baseline B10

Mil

lio

n B

arr

els

Oil

Eq

.

Avgas Gas LPG

Fuel Oil Bio Fuel Electricity

Diesel Premium (Oil)

0

100

200

300

400

500

600

700

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Mil

lio

n B

arr

els

Oil

Eq

.

Baseline Diversification

Measures to improve Energy diversification and Energy Conservation

Erase subsidy for oil in staging phasesDefine energy price according to its economic valuesImprove policiesHuman Resource Development to support the improvement of policies through competency-based regulationsEncourage and declare standard, certification and labellingExecute Energy AuditImprove dissemination and socialization pf information –in particular on energy efficiency-

Green Energy Policies(Ministerial Decree No. 002 year 2004,

Ministry of Energy and Natural Resources)

Focused on Policies of Energy Diversification and Focused on Policies of Energy Diversification and Energy Conservation, as followsEnergy Conservation, as follows:

Optimalization of Renewable Energy Use

Efficiency of Technology on Energy Utilization (both Renewable and Fossil)

Energy Efficiency Culture

Owner Owner : Small Enterprises : Small Enterprises

CapacityCapacity : : << 1MW/generation 1MW/generation

Location Location : included in PLN grid : included in PLN grid

PricePrice : 0,6 – 0,8 x Production Cost of PLN: 0,6 – 0,8 x Production Cost of PLN

Distributed Small-Scale Electricity Generation

(Ministerial Decree No.1122K/30/MEM/2002, Ministry of Energy and Natural Resources)

Policies that regulated operational of public Policies that regulated operational of public participation process on supply of electricity: participation process on supply of electricity:

Medium-Scale Electricity Generation weith Renewable Energy Source

(Ministrial Regulation No. 002/2006, Ministry of Energy and Natural Resources)

OwnerOwner : Enterprises: Enterprises CapacityCapacity : 1 < PSM : 1 < PSM ≤ 10 MW≤ 10 MW PricePrice : 0,6 – 0,8 x Production Cost of PLN: 0,6 – 0,8 x Production Cost of PLN Purchasing Contract Period : 10 years and can be Purchasing Contract Period : 10 years and can be

renewedrenewed

Supply and Usage of Bio Fuels as an Alternative Fuel

(Presidential Instruction No.1/2006)

Instruct relevant Ministers, Governors and Majors to execute efforts to speed-up the supply and usage of bio fuels, as follows:

Declare incentive and tariff policies, and fiscal incentive for supply and usage

Declare standard and quality, system and procedures, and market system of bio fuel

Supply of land and seeds as raw material

Development of indigenous technology and equipments

Encouraging small enterprises to develop, explore and trade bio fuel

Increase usage of bio fuel in transportation sector

Execute socialization and dissemination of information

Supply and usage of Liquid Coal as Alternative Fuel (Presidential Instruction No.2/2006)

Instruct relevant Ministers, Governors and Majors to execute efforts to speed-up the supply and usage of Liquid Coal, as follows:

Declare incentive and tariff policies, and fiscal incentive for supply and usage

Secure the supply of coal as raw material

Declare standard and quality, system and procedures, and market system of bio fuel

Development of indigenous technology and equipments

Encouraging small enterprises to develop, explore and trade bio fuel

Increase usage of liquid coal in transportation sector

Execute socialization and dissemination of information

Energy Efficiency Policies (1)(President Instruction No.10/2005 on Energy

Efficiency and Ministry of Energy and Natural Resources Regulation No.0031/2005 on

Modalities of Energy Efficiency Implementation)

To regulate energy efficiency implementation in the following sectors:To regulate energy efficiency implementation in the following sectors:

Commercial BuildingsCommercial Buildings AC temperature min. 25AC temperature min. 25°°CC Room Lighting max. 15 watt/m2Room Lighting max. 15 watt/m2 Decrease operational hours of electricity appliances (Switch-Decrease operational hours of electricity appliances (Switch-

off AC/Elevators one hour before close, elevators only stop in off AC/Elevators one hour before close, elevators only stop in certain levels)certain levels)

Government OfficesGovernment Offices AC temperature min. 25AC temperature min. 25°°CC Decrease the use of lightingDecrease the use of lighting Decrease operational hours of electricity appliances (Switch-Decrease operational hours of electricity appliances (Switch-

off AC/Elevators one hour before close, elevators only stop in off AC/Elevators one hour before close, elevators only stop in certain levels)certain levels)

Energy Efficiency Policies (2)

House holdHouse hold Use energy efficiency lampsUse energy efficiency lamps Decrease electricity use min. 50 watts on peak-hours ( 5 – 10 Decrease electricity use min. 50 watts on peak-hours ( 5 – 10

PM)PM) AC temperature min. 25AC temperature min. 25°°CC

TransportationTransportation Private cars with capacity of Private cars with capacity of ≥ ≥ 2000 CC, in particular in Java, 2000 CC, in particular in Java,

Sumatera and Bali, has to use Pertamax (efficient oil fuel with Sumatera and Bali, has to use Pertamax (efficient oil fuel with high octane and expensive price)high octane and expensive price)

Encouraging usage of gas as fuel for public tarnsportEncouraging usage of gas as fuel for public tarnsport

IndustryIndustry Energy audit on high energy-consumed industryEnergy audit on high energy-consumed industry Use energy efficiency products and technologyUse energy efficiency products and technology

OthersOthers Use energy efficiency lighting system for streelighting, Use energy efficiency lighting system for streelighting,

advertisement board / bill board, and other facilitiesadvertisement board / bill board, and other facilities Decrease subsidy for diesel fuelDecrease subsidy for diesel fuel