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  54% in year 2004 Increased domestic energy price in line with the trend of world energy price

The high demand of domestic energy (In indonesia, energy – in particular electricity – is still public goods, government is obliged to secure electricity supply Fossil fuel consumption has to be decreased, mainly because the price is increased while reserve is decreased Diversification energy has to be done, yet the investment condition has not support this policy Energy conservation – in particular energy efficiency – need to be encouraged more (avoid conflict with another policy with is intensification of fossil energy exploration Domestic Problems Energy Security is the main problem, policies need to be build to over come this problem

Challenge SECURITY OF SUPPLY  Increased fossil fuel reserved by exploring new wells  Speed-up the energy diversification efforts  Encouraging energy conservation Three Existing Energy Policies INCONSISTENCY OF POLICIES???

Electricity Generation TransportIndustry House hold and Commercial Type of Energy Coal Coal Liquefaction Coal Coal Briquette GasGasGas Gas Kota LPGLPGLPG Synthetic fuel (GTL) Fuel Cell Fuel cell Fuel Cell Bio Diesel Bio Fuels (bio diesel, bio ethanol, bio oil) Bio fuels Bio mass Bio fuels Bio gas Solar Geothermal ElectricityElectricityElectricity Micro Hydro DME (Dimethyl Ether) Wind Energy In Situ Nuclear Alternative Energy (Government Definition)

2004 Oil: 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) 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

Energy Difersification for Domestic Sector (Household Sector)

Energy Diversification for Industrial Sector

Energy Diversification for Transportation Sector

Measures to improve Energy diversification and Energy Conservation Erase subsidy for oil in staging phases Define energy price according to its economic values Improve policies Human Resource Development to support the improvement of policies through competency-based regulations Encourage and declare standard, certification and labelling Execute Energy Audit Improve 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 Energy Conservation, as follows Focused on Policies of Energy Diversification and Energy Conservation, as follows: Optimalization of Renewable Energy Use Efficiency of Technology on Energy Utilization (both Renewable and Fossil) Energy Efficiency Culture

Owner : Small Enterprises Owner : Small Enterprises Capacity: < 1MW/generation Capacity: < 1MW/generation Location : included in PLN grid Location : included in PLN grid Price: 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 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)  Owner : Enterprises  Capacity: 1 < PSM ≤ 10 MW  Price: 0,6 – 0,8 x Production Cost of PLN  Purchasing Contract Period : 10 years and can be renewed

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: Commercial Buildings  AC temperature min. 25°C  Room Lighting max. 15 watt/m2  Decrease operational hours of electricity appliances (Switch- off AC/Elevators one hour before close, elevators only stop in certain levels) Government Offices  AC temperature min. 25°C  Decrease the use of lighting  Decrease operational hours of electricity appliances (Switch- off AC/Elevators one hour before close, elevators only stop in certain levels)

Energy Efficiency Policies (2) House hold  Use energy efficiency lamps  Decrease electricity use min. 50 watts on peak-hours ( 5 – 10 PM)  AC temperature min. 25°C Transportation  Private cars with capacity of ≥ 2000 CC, in particular in Java, Sumatera and Bali, has to use Pertamax (efficient oil fuel with high octane and expensive price)  Encouraging usage of gas as fuel for public tarnsport Industry  Energy audit on high energy-consumed industry  Use energy efficiency products and technology Others  Use energy efficiency lighting system for streelighting, advertisement board / bill board, and other facilities  Decrease subsidy for diesel fuel