1. CLIMATE CHANGE IMPACTS & ENERGY INSECURITY: INDONESIA OVERVIEW Asclepias R. S. Indriyanto Indonesian Institute for Energy Economics “Mapping Causal Complexity in Climate Change Impacts and Adaptation” Nautilus Institute & RMIT University Sydney Myer Asia Centre, University of Melbourne 21-22 November 2008

2. Presentation Outline 1.Indonesia Energy System 2.Energy Security and Sustainable Development 3.Indonesia and the Region

3. Final Energy Consumption 2006 *Mostly firewood **Including coal briquette Sources: Handbook Statistic Indonesian Energy Economics 2007, Ministry of Energy & Mineral Resources Industry: major energy user, variety of energy sources Household: major energy consumer, 73% use firewood Transport: relies heavily on oil products, usage of gas and electricity are negligible Oil products and conventional biomass dominates final energy consumption Electricity share: 8% - 12% Electricity generation is heavily dependent on oil products and coal

4. Primary Energy Mix 2005: 0.96 Million BOE without firewood 1.23 Million BOE including firewood Oil share 49%, less than in the previous decade Other NRE = majority hydro BAU 2025: 3.26 Million BOE without firewood (2.65 times the size in 2005) Oil share reduces a bit, but remains dominant Coal share increase to 34.5% Other NRE = majority hydro Target 2025 (Pres Regulation 5/2006): Oil share shrinks to 20% Coal 33% and gas 30% Other NRE: biofuel 5%, coal liquefaction 2%, others 5% Source: Presentation by Data & Information Center of MEMR, 5 Nov 2008 GOI estimates CO2/capita increase from 1.54 in 2005 to 3.54 in 2025

5. Energy Infrastructure Economic development has been focused on Java –60% of national population, 77% of electricity generating capacity (plus 7000MW coal plants under construction), interconnected electricity grid, gas transmission pipeline on Java & from Sumatera, etc –Affect the selection of technology and energy resources –Heavy burden at the northern part of Java But Java has many limitations –Energy resources: no coal, relatively small oil and gas, geothermal potentials are still undeveloped. Need to transport energy from other islands and absorb most of imported fuels –Limited possibility for expansion: occupied land, natural port locations –Land conversion and degradation lead to severe lost of forest cover, water deficit, shorten life of dams –Northern part of Java: land occupation for population and industry, ground water extraction, port facilities Need to revisit the national development strategy

6. Energy Security and Sustainable Development

7. Indonesia and the Region Indonesia has many natural resources, has been exporting fossil energy: oil, gas, coal Current pressure between export and domestic needs Difficult position with respect to ASEAN plans to interconnect energy infrastructure: TAGP, TAEG. Interconnection in Java, Sumatera May not be able to maintain energy export Important for Indonesia to develop energy resources and the economy of the other islands