1 GENERATING DIALOGUE CLEAN ENERGY, GOOD GOVERNANCE AND REGULATION by Maritje Hutapea Directorate General for Electricity and Energy Utilization Ministry of Energy and Mineral Resources Singapore, March 2008

2 Indonesian Current Energy Condition

3 Growth of Primary Energy 1970 Oil : 88% Gas: 6% Coal: 1% Hydro: 5% Geothr: 0%  Average Growth of Primary Energy  Average Growth of Primary Energy = 7%/year Source: DGEEU, Oil: 46,9% Gas: 21,8% Coal : 23,5% Hydro: 2,4% Geothr : 5,5%

4 TYPE OF ENERGY RESOURCESPOTENTIALUTILIZATION INSTALLED CAPACITY Large Hydro845 million BOE75,67 GW6.851 GWh4.200 MW Geothermal219 million BOE27 GW2.593,5 GWh807 MW Mini/Micro-hydro500 MW 207 MW Biomass49,81 GW445 MW Solar4,80 kWh/m 2 /day12 MW *) Wind 3-6 m/second 1 MW *) Uranium (Nuclear) Tonne e.q.3 GW for 11 years Renewable Energy Potential (2006) *) 2007

5 Final Energy Consumption 2006 Final Energy Consumption 2006 (Industrial Sector is the biggest final energy consumer) Sector Final Energy Consumption (Thousand BOE) Industry Transportation Household& Commercial Total Sectoral Final Energy Consumer 2006 Transportation 38% Industry 40,6% Household & Commercial 21,4% Source: Statistic DGEEU 2006

6 Rural Electrification Ratio (2006) 97,91% Indonesia With electricity : desa (79,46%) Without electricity : desa (20,5%) Electrified 69,33% Java Outside Java

7 Electrification Ratio 2006 : 59% Electrification Ratio Customer: 33,1 million household

8 Share of Electricity Production by Type of Energy (2006)

9 Natural Gas, 28.57% Coal, 15.34% Oil 51.66% Geothermal, 1.32% Hydro Power, 3.11% Coal, 33% Gas, 30% Oil, 20% BIOFUELS, 5% Geothermal, 5% Biomass, Nuclear, Hydro Solar 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 POLICY (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 Less than 1 for energy elasticity 2. Optimized primary energy mix

10 Renewable Energy Development

11 TARGET OF RENEWABLE ENERGY IMPLEMENTATION  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)

12 NEW RENEWABLE ENERGY DEVELOPMENT PLAN (Based on the Blueprint of National Energy Management) Jenis EnergiUnit Bio-dieselKilo liter Bio-ethanol Barel per hari Bio oilKilo liter Biomassa : Waste MW GeothermalMW Wind PowerMW Solar EnergyMW MicrohydroMW

13 RENEWABLE ENERGY UTILIZATIONS  Electrification  Water Pumping  Battery Charging  Rural Health Center Refrigerator  Telecommunication  Solar Cooker  Water Heater  Agriculture/Fishery Product Drying  Water Distillation  Fuel for Transportation

14  Replacing diesel power plant by using local energy sources: micro hydro, solar PV, wind, biomass (stand alone/or hybrid system)  Government and regional government provide budget for rural electrification  rural consumers are obliged to pay monthly payment depends on local conditions  Establishing local institution in operation and maintenance of the asset. ☼ ☼ Rural Electrification Program

15 ☼ ☼ 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%

16 NoType of EnergyLocationUnits Installed Capacity 1 Solar 2146 kW a. Solar Home System29 Provinces 40,888 x 50 Wp b. Solar Power Plant - Riau, West Java, Central Java & East Java 4x18 kWp - Bali 1x32 kWp 2Mini/Micro-Hydro - West Java 1x30 kW & 1x37 kW 1171 kW - Banten 1x40 kW - Central Java 1x30 kW, 1x50 kW & 2x15 kW West Sumatera 1x52 kW Central Sulawesi (interconnected) 1x890 kW 3Wind - North Sulawesi 2x80 kW 480 kW - Bali 4x80 kW Total3797 kW ☼ ☼ Rural Electrification Project in 2007

17 ☼ ☼ Rural Electrification Project in 2008 Located in 29 provinces Consist of:  solar energy : SHS (± 35, Wp) and centralized solar PP (4 kW)  mini/micro-hydro (capacity: 20 – 500 kW)  wind energy (± Wp)  Hybrid: wind-diesel and solar-diesel

18 TARGET SSEV (Cumulative) ☼Self-sufficient Energy Village (SSEV) Program ☼ Self-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

19 TARGET SSEV (Cumulative) ☼ Self-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

20 TARGET SSEV (Cumulative) Program Biofuel-based SSEV Non-biofuel-based SSEV ☼ Target of SSEV Implementation

21 Barrier & Strategy in Developing Renewable Energy

22 BARRIERS TO RENEWABLE ENERGY DEVELOPMENT  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

23 Law & Regulation

24 POLICIES AND REGULATIONS 1.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 K/30/MEM/2002) 7.Medium Scale Power Generation Using Renewable Energy  (Ministerial Regulation No. 002/2006)

25  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 (Law No. 30/2007)

26 Geothermal Law (Law No. 27/2003)  To regulate the management and development of geothermal energy sources for direct and indirect utilization

27 Green Energy Policy (Ministerial Decree: No. 0002/2004) Renewable Energy and Conservation Energy Development Policy: Green Energy Policy:  Implementing the maximum utilization of renewable energy  Efficient utilization of energy  Public awareness in energy efficiency

28 Presidential Instruction on Biofuel Development (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

29 Regulation on Electricity Supply and Utilization (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

30 Small Distributed Power Generation using Renewable Energy (Ministerial Decree: No 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

31 Medium Scale Power Generation using Renewable Energy (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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