indonesia energy issue

Securing Energy with Renewable and Efficiency

Erkata Yandri

Erkata Yandri

Issue on Energy Security was sticking out at the end of 2015, after the government released the idea of energy security funds to develop renewable energy. It was immediately opposed by various parties, resulting not start yet until today. What’s the matter with our energy security?

What Has Been Done?

Energy security is how to secure the availability of energy to ensure the economic and population growth within a certain period in the future. Meaning, dependence on fossil energy should be reduced to two things, namely energy diversification by using renewable energy (RE) and energy conservation or energy efficiency (EE) The question, to what extent RE and EE has been done by the government?

For RE, such as hydro, geothermal, biofuel, biogas, solar, etc., in fact some regulations have been issued by the government on energy to secure the future energy. Initially, the government issued Presidential Decree No.05/2006 on final energy mix by 2025, the share of renewable energy by 17%, then Permen ESDM No.10/2012 on the implementation of physical activity for the utilization of new energy and renewable energy, Permen ESDM No.18/2012 on guidelines for the implementation of the geothermal business activities, Permen ESDM No.17/2014 on the purchase of electricity from hydropower and geothermal steam for geothermal power plant by PLN, and lastly Permen ESDM No.19/2015 on the purchase of electrical energy by PLN from hydropower plants with capacity up to 10 MW. Everything is to accelerate the use of renewable energy with ease and tariff incentives that appeal to developers, giving assurance of electricity supply for the government.

As a result, RE sharing status from 2006 to 2013 was not much change, still 3%. That is, after 7 years, no fundamental changes as a result of energy policies that have been issued previously. Finally, in 2014, the government made revisions by issuing a new national energy policy, Presidential Decree No.29/2014, which especially corrects the target of renewable energy of 31% in 2050. A great hope to RE.

For EE, the Government initially issued Presidential Decree No.70/2009 on energy conservation, to encourage the government institutions, and state enterprises to implement energy efficiency and conservation. If this can be done, the goal of energy independence will be more easily controlled. Unfortunately, the regulation does not work properly because of slow implementation and no significant benefits in addressing the wasted energy in general.

In fact, the government has given incentives to energy users whom use more energy than or equal to 6,000 tons of oil equivalent per year, as well as to the successful national energy-saving equipment manufacturers to implement energy conservation in certain periods. The incentives for users are; tax facilities for energy-efficient appliances; granting reduction, relief and local tax exemptions for energy-efficient appliances; import duty facility for energy-efficient appliances; low interest rates to invest in energy conservation; and/or energy audits partnership funded by the government. Unfortunately, the incentive is in-effective because of no mechanism to give the mandate directly to the perpetrators.

To support the EE program, the government subsequently issued several supporting policies, such as; Permen ESDM No.12/2012 on controlling the use of fuel oil (updated ESDM No.01/2013), Permen ESDM No.13/2012 on the efficient use of electric power. In addition, Directorate of new and renewable energy (EBTKE) on 2014 has awarded energy savings for energy efficient buildings, energy management in industry and construction, and energy and water savings at the central and local governments.

Barriers & Action To Be Taken

For RE, there are three barriers faced. First, lack of funds invested in research and development, as well as RE project. Thus, the government attracts more foreign participation in the scheme of cooperation or assistance. Secondly, lack of focus and priority, due to lack of awareness and urgency. Many people believe that energy can still be supplied from domestic fossil energy or buy from other countries. Many do not understand that our oil will soon run out in 12 years, if there is no successful exploration. The government has failed to explain this issue to the people. Third, the inefficient bureaucracy, spending more time and money, thus giving the opportunity exploited by certain parties. It becomes very speculative and high risk.

There have been many regulations and incentives provided for RE. Now, all depends on how the government to boost the local government and related parties, to utilize the existing RE potential to drive the local economic growth with business development of RE industries and services. Thus, the government also needs to role how to exploit the potential of RE in government buildings, such as solar and small wind turbine. Furthermore, the progress of RE can be used as an evaluation indicator by the central to local governments, such as for allocating the state budget.

As for EE, there are two obstacles that must be anticipated. First, cheap energy prices because of subsidies, so that EE become less attractive. With a large number of industries, the opportunity of energy efficiency in Indonesia is quite large and giving high potential savings as well. This is compounded by the lack of capacity of the relevant government agencies in conducting follow-up, audit, education and consultation.

So, the EE process was not optimal without challenging savings targets. Secondly, the lack of competent human resources, especially in the industry, to conduct energy management and energy saving projects systematically, as described in Permen ESDM No.14/2012. It will get worse if the top management or business owner does not have energy vision. They should be able to explore the potential and execution. Energy saving programs, especially in large companies, requires technical capabilities with tight coordination. If not, focus will be the easier and faster activities, such as lighting, incidentally has been aided by Permen ESDM No.18/2014 on energy-efficient labeling for ballasted lamp.

In general, the energy waste is caused by human and technical factors. Therefore, energy efficiency should be emphasized to demand side management. For that, there are five things that must be done by the government.

First, the government should revoke or reduce fuel and electricity subsidies gradually, or just provide subsidies to certain parties. Transportation as the highest oil consumption growth rate of 6.92%, driven by the automotive growth of 4.3% per year, cannot only be anticipated by extending the road, but might be by the disruptive information technology, to reduce mobility for working at home.

Secondly, conduct monitoring and evaluation system with technical guidelines in order to track the energy use. If necessary, the achievement of the national energy savings is informed real time on the government website.

Third, continue to develop human resources whom have the technical and management skills in energy saving, which had previously been anticipated by the government with Permen ESDM No.41/2015. Actually, the EE program in industry can be done straight forward with just 3R concept (reduce, re-use, recycle), waste heat re-utilization, process engineering, etc. Those do not only require investment to buy the technology, but importantly the expertise of human resources.

Fourth, create energy-saving behavior as a culture by providing vision and actions in energy savings, from the presidential level to people. Here, how the government to design energy-efficient buildings and how to save energy in the government office.

Fifth, expand the scope and technical quality of energy-efficient equipment or machines, such as for air conditioning in Permen ESDM No.07/2015, so the electricity consumption in residential and commercial sectors can be reduced. The savings will be even greater if the architect contribute in designing energy efficient building, moreover supported by the energy-efficient building materials technology.

So, any regulations made by the government, does not work if there are no strong political will and people involvement. To do that, the Government needs to layout a clear vision of energy security for both RE & EE, and execute with the realistic actions, then track and report the achievement to people with measurable indicators. Let’s achieve energy security based on the role each of us.