DEVELOPMENT OF NEW, RENEWABLE ENERGY and ENERGY CONSERVATION

ESDM untuk Kesejahteraan Rakyat

DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION

Jakarta, 17 Juli 2012

DEVELOPMENT OF NEW, RENEWABLE ENERGY

and ENERGY CONSERVATION

DR. KARDAYA WARNIKA

Director General

MINISTRY OF ENERGY AND MINERAL RESOURCES


CONTENTS

I. INDONESIA’S ENERGY SUPPLY & DEMAND 3

II. ENERGY POLICY 8

III. OBSTACLES OF NRE and EC DEVELOPMENT 10

IV. EFFORTS OF NRE and EC DEVELOPMENT 12


INDONESIA’S ENERGY SUPPLY & DEMANDI


ENERGY SUPPLY - DEMAND2011 - 2025

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Coal

Gas

Oil

MIL

LIO

N B

OEP

D

OIL DEMAND

BaU DEMAND

DEMANDWITH CONSERVATION

Indonesia might be an net-energy importing country in year 2019

ENERGY PRODUCTION

<ENERGY DEMAND


Oil47 %

Gas 24 %

Coal24 %

NRE(NEW AND RENEWABLE ENERGY)

5%

PRIMARY ENERGY MIX - YEAR 2011

•NRE UTILIZATION IS STILL LOW

•STILL RELY ON OIL IN WHICH ITS CAPABILITY HAS BEEN

DECLINED AND BEING MORE EXPENSIVE

PRIMARY ENERGY CONSUMPTION 2011:

1.176 MILLION BOE


POTENTIAL AND PRODUCTION OF FOSSIL ENERGY (2011)

NO FOSSIL ENERGYRESOURCES

(RS)

PROVEN

RESERVES

(RV)

RS/RVRATIO

PRODUCTION

(PR)

RV/PRRATIO(YEAR)

1 2 3 4 5 = 4/3 6 7 = 4/6

1 Oil (billion barrel) 56.6 4,04 *) 7,18 % 0.329 12

2 Gas (TSCF) 334.5 104,7 **) 31,30 % 3.07 34

3 Coal (billion ton) 161.3 5,53 3,43 % 0.353 16

4 Coal Bed Methane (TSCF) ***) 453 - - - -

5 Shale Gas (TSCF) ***) 574 - - - -

*) 0,1% of world reserves

**) 1,2% of world reserves

***) termed as new energy (Law No. 30/2007 concerning on Energy)


Depleting reserve. Proven reserve in 2011 is 4,04 billion barrel or 12 years basedon current production level (Reserve/Production Ratio).

OIL AS THE MAIN ENERGY SUPPLY

Riau

Kalimantan Timur

Maluku

Kalimantan Timur

Jawa Timur

Jawa Timur

0 155 10

Exploration Period Development First Production

Year

PERIODE EKSPLORASI SAMPAI TAHAP PRODUKSI

Crude oil price tends to increase and uncertain.

The aAddition to existing oil reserves is not able to compensate its depletion

rate (Reserve/Replacement Ratio < 1).

Period of oil development

in Indonesia could be more

than 15 years.

Relying on domestic oil is

too late.

TO AVOID OIL IS A MUST!


ENERGY POLICYII


ENERGY CONSERVATION

► High potential due to Indonesia is a wasteful energy consumer, measured

from its energy intensity.

► Cost for implementing energy conservation is cheaper than cost increasing

energy supply.

► Implementation of energy conservation is faster than increasing energy

supply.

ENERGY DIVERSIFICATION

Utilization of various energy types, especially New and Renewable Energy:

► Large and variaous in the potential

► Implementation of NRE is faster than those in fossil energy.

► No need of massive investment.

ENERGY POLICY


OBSTACLES OF NRE AND EC DEVELOPMENT III


OBTACLES OF NRE AND EC DEVELOPMENT

1. Price

Renewable energy is hard to develop due to its competition with oil fuel which is subsidized

(currently upto half of the cost).

2. Funding

Banks have not supported NRE funding because they do not understand NRE activities

clearly, so that NRE investment is still difficult in getting funds.

3. Incentive

There is almost no incentive for both NRE consumer and producer; In some other countries,

producer get incentives.

4. Institutional and management of new energy has not completely fulfiled the law that

causes legality doubtness.

5. Need significant breakthrough in new energy development (currently treated in business

as usual).


EFFORTS OF NRE AND EC DEVELOPMENTIV


EFFORTS OF NRE AND EC DEVELOPMENT

1. Price

a.Reducing oil fuel subsidy or subsidizing NRE. Subsidizing NRE is more possible to be implemented.

b.Feed in Tariff is determined by the government and should not be negotiated by PT PLN (Persero).

Feed in Tariff is aimed at increasing investment through price certainty since the beginning in order

to minimize the risk. Regulations on Feed in Tariff have been published by the government and

some others are being finalized.

2. Funding

a.Need of green banking; Central Bank has had some initial preparations with Directorate General of

NREEC.

b.Need of government assurances.

3. Incentives

a.Need of incentives for producers, e.g. fiscal incentive.

b.Need of incentives for consumers.

c. Need of institution that assures supply change of renewable energy.

d.Need of an appointed state-owned company dedicated to NRE development (there is always

appointed state-owned company in every strategic government program).


www.esdm.go.id


ENERGY POTENTIAL AND PRODUCTION (2011)NO NEW/RENEWABLE ENERGY

RESOURCES

(RS)

INSTALLED

CAPACITY (IC)IC/RS RATIO

1 2 3 4 5 = 4/3

1 Hydro 75.670 MW 6.654,29 MW 8,79 %

2 Geothermal 29.038 MW 1.226 MW 4,22 %

3 Mini/Micro Hydro 769,69 MW 228,983 MW 29,75 %

4 Biomass 49.810 MW 1.618,40 MW 3,25 %

5 Solar 4,80 kWh/m2/day 22,45 MW -

6 Wind 3 – 6 m/s 1,87 MW -

7 Uranium3.000 MW

(e.q. 24,112 ton) for 11 years*)30 MW 1,00 %

*) Only in Kalan – West Kalimantan

NO FOSSIL ENERGYRESOURCES

(RS)

PROVEN

RESERVES

(RV)

RS/RVRATIO

PRODUCTION

(PR)

RV/PRRATIO(YEAR)

1 2 3 4 5 = 4/3 6 7 = 4/6

1 Oil (billion barrel) 56.6 4,04 *) 7,18 % 0.329 12

2 Gas (TSCF) 334.5 104,7 **) 31,30 % 3.07 34

3 Coal (billion ton) 161.3 5,53 3,43 % 0.353 16

4 Coal Bed Methane (TSCF) ***) 453 - - - -

5 Shale Gas (TSCF) ***) 574 - - - -

*) 0,1% of world reserves

**) 1,2% of world reserves

***) termed as new energy (Law No. 30/2007 concerning Energy)


IMPLEMENTATION OF RENEWABLE ENERGY IS FASTER

THAN FOSSIL ENERGY

Construction of solar power plant, wind power plant,

microhydro power plant and biomass power plant

requires only 1 – 2 years.

Construction of big scale hydro power plant and

geothermal power plant requires 5 years.

Activities in oil and gas development require 10 – 15

years.

DEVELOPMENT OF NEW, RENEWABLE ENERGY and ENERGY CONSERVATION

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