The Opinion

is a channel to state various point of views related to any topics in the energy and
natural resources sector. It is written by the Purnomo Yusgiantoro Center (PYC)
researchers and energy experts.

The Urgency of Addressing Energy Poverty to

Overcome Multidimensional Poverty in
Indonesia
By : Anggun Alfina Zakia

The dimension of poverty no longer speaks of the amount of income by each individual but has developed in a
multidimensional perspective. Multidimensional poverty can capture not only the number of people but also
showed the characteristics of poverty experienced by the population. So, when the government making the
policy, the policy will be more appropriate because it has clear indicators in determining the success of the
program.

This article was written to get information about the conditions of multidimensional poverty in Indonesia,
especially energy as one of the multidimensional indicators of poverty. The parameter used to see the depth of
multidimensional poverty itself is the Multidimensional Poverty Index (MPI). MPI developed by the Oxford
Poverty and Human Development Initiative (OPHI) (Statistics of D.I. Yogyakarta, 2016). MPI sees poverty from
many dimensions (multidimensional), so it can take a broader picture of poverty occurring in an area compared to
one-dimensional approaches such as basic need approaches.

The structure of poverty in MPI is broader than just income or consumption but defines it in a multidimensional
manner such as limited access to education, health, and quality of life. Energy is one of the important indicators
used to measure MPI. Two points that are indicators of MPI from sector energy are sources of lighting and
fuel/energy for cooking, both of which are included in the standard of living.

The definition of lighting sources is households that do not have a proper source of lighting (MPI-Indonesia,
2019). The threshold of this indicator is households that have non-PLN lighting sources such as petromax, torch,
others and do not have PLN electricity above 900 watts. The global reference used by this indicator is the SDGs 7
goal is especially 7.1. While for fuel indicator/energy for cooking is fuel/energy used for cooking is feasible or not
(MPI-Indonesia, 2019). The threshold for this indicator is households that still use kerosene, charcoal, briquettes,
fuelwood, and others and do not use electricity and gas as the main fuel for cooking. This global indicator
reference is SDGs 7 goals especially 7a and 7b.

According to Ban Ki-Moon, energy is a golden thread that connects economic growth, increases social and
environmental equality that enables the continuity of the earth. This is in line with the multidimensional poverty
theory of Sen (2000) which states that the availability of access to modern and affordable energy services can't
only improve the quality of decent living, but also improve the quality of education and health services. With
energy access, this will grow the people's economy, create jobs, children can study at night, clinics can store
vaccines for treatment, countries can developing a strong and competitive economy.

International Energy Agency (IEA) defines the condition of energy poverty as a deprivation of access to electricity
sources and dependence on traditional biomass fuels for cooking such as fuelwood, charcoal, agricultural waste,
and animal waste. If it is pulled up again, these two things are the main indicators of the achievement of the
objectives of SDG 7 which aims to ensure access to affordable, reliable and sustainable modern energy sources.

As the largest net exporter in the world and the eighth largest exporter of clean natural gas (IEA, 2018), the
condition of energy poverty in Indonesia still needs more attention. According to data from the Energy Sector
Management Assistance Program (ESMAP) in 2016, there were 6 million people who did not have access to
electricity and all of them were people living in rural areas. In addition, there are still 109 million people who still
depend on traditional biomass fuel for cooking.

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 The Opinion
is a channel to state various point of views related to any topics in the energy and
natural resources sector. It is written by the Purnomo Yusgiantoro Center (PYC)
researchers and energy experts.

Source: (Statistics of Indonesia, 2018)

The policy on the conversion of kerosene fuel to LPG that was carried out by the government for the period 2007-
2011 actually had a large impact. The impact is a shift in the pattern of the use of energy types for cooking to be
cleaner and more efficient. However, there are still a number of regions that have not been able to enjoy the
subsidy policy due to distribution factors, so that making LPG prices that should be able to be purchased by the
public to be more expensive. Based on data from the People's Welfare Statistics 2015 - 2017 shows an increase
in the ratio of household gas use in Indonesia (Figure 1). The ratio of household gas use is calculated as a
comparison between the number of households using gas to the total household. This indicator is used to see the
proportion of households that have utilized the use of gas as a cleaner and safer fuel for cooking. Increasing the
ratio of household gas use shows an increasing trend, but has not reached 100 percent. This further reinforces
the suspicion that there are still many Indonesians who still use traditional fuel and are not clean as fuel.

Energy poverty is not solely influenced by the individual's financial condition, but also the condition of the area of
residence and the availability of infrastructure. Funding for the installation of energy sources, institutions that
assist to conduct and monitor energy, regulations and/or policies that support them, are a number of things that
are also important factors for increasing access to energy for a person or group of people. At present, there are
several energy funding projects that utilize local wisdom such as the Biogas project implemented by HIVOS in
NTB, NTT and South Sulawesi. Whereas in several other regions, the government also provided funding for
farmers to be used as biogas installation. But however, the program is always constrained in the maintenance
phase, so there are not a few biogas projects that are not running.

Based on an evaluation of development planning carried out by the Ministry of Planning and National
Development or Bappenas, at the end of 2016 the national electrification ratio reached 91.16 percent (Ministry of
National Development Planning / National Development Planning Agency (BAPPENAS), 2017). A total of 32
provinces including electrification ratios of more than 70 percent, while 2 provinces (NTT and Papua) are still
below 60 percent and get more attention in an effort to improve access to electricity. On the other hand, the use of
non-electricity is most often used by Papua Province (49.10 percent), NTT (27.86 percent), West Papua (13.61
percent), Maluku (11.86 percent) and North Maluku (10.01 percent) (Statistics of Indonesia, 2016). Almost all
residents in the area do not use electricity as the main source of support. They generally use lighting sources from
kerosene lamps or temple lights. When compared with other ASEAN countries, Indonesia's electricity
consumption per capita is still lagging behind. Brunei Darussalam's electricity consumption reached 10.113 kWh
/ capita, and Vietnam with 1,439 kWh / capita. This illustrates that increasing access to electricity, especially in
rural areas, needs to be improved.

The intervention to solve the problem of energy poverty is one of the policies that must be prioritized at this time.
In addition to being mandated by law and the target of achieving sustainable development goals, access to a
variety of energy services can increase the opportunities for the opening of various business activities that can
generate income and significantly reduce poverty

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 The Opinion
is a channel to state various point of views related to any topics in the energy and
natural resources sector. It is written by the Purnomo Yusgiantoro Center (PYC)
researchers and energy experts.

References

Badan Pusat Statistik. (2016). Survei Sosial Ekonomi Nasional (SUSENAS). Jakarta: BPS.

Badan Pusat Statistik DIY. (2016). Analisis Kemiskinan Multidimensi dan Ketahanan Pangan di DIY. Daerah
Istimewa Yogyakarta: Bada Pusat Statistik.

Badan Pusat Statistik Indonesia. (2018). Indikator Tujuan Pembangunan Berkelanjutan (TPB) Indonesia 2018.
Jakarta: Badan Pusat Statistik Indonesia.

IEA. (2018). Key World Energy Statistics. International Energy Agency (IEA).

Kementerian Perencanaan Pembangunan Nasional/ Badan Perencanaan Pembanguan Nasionan

(BAPPENAS). (2017). Evaluasi Paruh Waktu RPJMN 2015-2019. Jakarta: Kementerian Perencanaan
Pembangunan Nasional/ Badan Perencanaan Pembanguan Nasionan (BAPPENAS).

MPI-Indonesia. (2019, 20 2). Retrieved from MPI Indonesia (Indeks Kemiskinan Multidimensi): http://www.mpi-
indonesia.org/dimensi-indikator.html

*Any opinions, findings, and conclusions or recommendations expressed in this material are those of the
author(s) and do not necessarily reflect the views of the Purnomo Yusgiantoro Center (PYC).

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