Indonesia’s Notable Energy Development Since … - Notable Energy...Page 1 of 3 THE FOURTY EIGHT APEC ENERGY WORKING GROUP (THE EWG 48) 17 – 22 November 2012, Port Moresby, Papua

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2014/EWG48/036 Agenda Item: 5a

Indonesia’s Notable Energy Development Since EWG 47

Purpose: Information

Submitted by: Indonesia

48th Energy Working Group Meeting Port Moresby, Papua New Guinea

17-21 November 2014

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THE FOURTY EIGHT APEC ENERGY WORKING GROUP(THE EWG 48)

17 – 22 November 2012, Port Moresby, Papua New Guinea

Indonesia’s Notable Energy Development since EWG 47

Indonesia has passed an important democratic process recently. We have elected the new leaders of the economy, Mr. Joko Widodo and Mr. Jusuf Kalla as President and Vice President of Republic of Indonesia. Under new administration, Indonesia is now having a new government with new vision and direction.

Structural reformation is now conducted within the government as new ministries are formed to facilitate current administration’s direction. In particular, The Ministry of Energy and Mineral Resources which is Indonesia focal point for energy issue will be under the Coordinating Ministry for Maritime Affairs, along with Ministry of Transport, Ministry of Marine and Fisheries and Ministry of Tourism. We aspire to strengthen connectivity all over Indonesia to create a more efficient economy for the people. After all, better connectivity for Indonesia will contribute to the connectivity the Asia Pacific region and other global communities.

Despite of the changes in the government, Ministry of Energy and Mineral Resources will continue the work in energy sector reform, such as reducing fossil fuel subsidy and allocating the budget for more productive uses. To reduce the independency on fossil energy, the utilization of alternative energy becomes more important. Our commitment to develop alternative energy resources is stipulated in Government Regulation No. 27 Year 2014 which stressed the share of renewable energy is set to be 23% of the total national energy mix by 2025.

To increase the development of renewable energy sector, the Government of Indonesia has established following regulations:

Act No. 21 of 2014 on Geothermal to replace the Act No. 27 Year 2003. The new regulationspecifically re-categorize geothermal as non-mining, making the exploration and utilization of geothermal in the conservation forest area possible. The new regulation also states that feed-in tariff on geothermal electricity is set by the Government, offering incentives to developers, as well as affirming that the Central Government holds the only authorization to conduct tender on Geothermal Working Areas and then controlling the project. The Local Government, on the other hand, is authorized to utilize geothermal for direct use (other than electricity generation).

Ministerial Decree No. 17 of 2014 which sets feed-in tariff on geothermal-based electricityfrom 11.8 - 29.6 cent US$/kWh in accordance with a project’s Commercial Operation Date and its development.

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Minister Decree No. 27 of 2014 which sets feed-in tariff on biomass and biogas-based electricity.

Ministerial Decree No. 22 of 2014 which instructed the State Power Company (PT. PLN) to purchase electricity based on hydro from developers, specifically ones that utilizes dam and/or irrigation channel with capacity up to 10 MW.

To meet our national goal in renewable energy sector, we will commit to strengthen our role in national, regional, and multilateral level. In the light of this, Indonesia has formally join the International Renewable Energy Agency (IRENA) on October 2014 by the ratification of the Statute of IRENA through the Presidential Decree No. 62 of 2014. Indonesia seeks to develop the renewable energy sector with Asia Pacific economies and beyond.

With regards to connectivity, Indonesia is still developing the joint project with Malaysia under the BIMP-EAGA framework to build cross-border interconnection electricity facility, the West Borneo-Sarawak Interconnection. The project is targeted to be in full operation by 2015.

To promote clean and sustainable energy usage in national level, Indonesia has been actively engaging local government in clean energy development, such as in Low Carbon Model Town project. In the 47th APEC EWG, Indonesia officially proposed City of Bitung in the North Sulawesi Province. Moreover, to raise awareness and capacity development for the local government, The officials from City of Bitung has attended the APEC Workshop on Energy Smart Communities held in Chinese Taipei on 16-17 October 2014.

As part of our commitment to increase energy efficiency and conservation as well as mitigate climate change, the Ministry of Energy and Mineral Resources has developed 2 (two) new renewable energy and energy conservation projects as Nationally Appropriate Mitigation Action (NAMAs), namely SmartStreet Lighting Initiative (SSLI) and Debottlenecking Project Financing for small-scale Renewable Energy (DEEP). SSLI Program aims to implement energy efficiency in street lighting by replacing conventional lighting technology to energy efficient technology, namely Light Emitting Diode (LED) in urban areas. The SSLI will be implemented in 22 cities in Indonesia to promote transformational changes in this particular sector. With improvement, we will implement this project all over Indonesia. SSLI has been registered to UNFCCC’s NAMA in May 2014 to seek international support for implementation. The project has been attracting several development partner supports, namely Asian Development Bank, USAID, AFD, besides being proposed to NAMA Facility.

DEEP NAMA aims to promote on-grid renewable energy, particularly bioenergy based power plant, by increasing the institutional capacity of financial institution and project developer. Its activities will include technical assistance as well as financial facilities of the renewable energy developer.

Based on our experience from SSLI and DEEP NAMA projects, Indonesia is currently developing other NAMA projects on small-scale renewable energy (mini/microhydro pp) and energy efficiency (efficient electric motor and green chiller), etc.

With regard to energy efficiency, Indonesia has issued standard and regulation on energy efficiency in building, namely: National Standard (SNI) No. 03-6390-2011: Energy Conservation for Air Conditioning System in Building; SNI 03-6197-2011: Energy Conservation for Lighting System in Building; SNI 03-6389-2011: Energy Conservation for Building Envelope; and SNI 03-6196-2011: Procedure for Energy Audit in Building. The implementation of this standard is carried out by our local government, such as City of Jakarta as part of Governor Regulation on Green Building in Jakarta. Each building, both existing and the new one, must conform to the green building standard, including energy efficiency in order to obtain or renew its building permit.

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Some building, new and existing, are also participate in the Greenship Program by Green Building Council Indonesia. The Greenship program has 4 (four) criteria, which is sustainable building material, water and waste water management, energy efficiency, and waste management. Currently, there are 41 new buildings and 3 existing buildings that have been registered under in this program.

The energy policies and programs are supported by the research and development sector, particularly research and studies on renewable energy and energy efficiency. There are several research and studies available, namely maps of renewable energy potential, scientific reports, pilot plant/prototypes, and recommendations for law and regulations, for further development. The Ministry’s Geological Agency has established a report on exploration on new, renewable and unconventional energy resources (along with a map of potential) on shale oil, geothermal, coal and CBM resources. The report is available at the Geological Agency website, http://www.bgl.esdm.go.id/.