Policies and Strategies for Renewable Energy

Development in Indonesia

Oetomo Tri Winarno Yogi Alwendra Sugeng Mujiyanto

Center for Energy Policy Studies Center for Data and Information Technology Center for Data and Information Technology
Institute of Technology Bandung Ministry of Energy and Mineral Resources Ministry of Energy and Mineral Resources
Bandung, Indonesia Jakarta, Indonesia Jakarta, Indonesia
tomotw@gmail.com yalwendra@esdm.go.id smujiyanto@esdm.go.id

Abstract—Indonesia has an optimistic target to develop 7.2 million TOE, coal 30.6 million TOE, and electricity 16.9
renewable energy. Currently, Indonesia’s energy consumption is million TOE. Biofuel is mixed in oil fuel, and electricity is just
still dominated by fossil fuels. The share of oil, natural gas, and on-grid electricity. Biomass power plants with total installed
coal is still more than 90% in the primary energy mix capacity 1.6 GW operated by industries are not reported.
consumption. With a large potency of hydro, geothermal, and
bioenergy; the target for new and renewable energy in primary III. RENEWABLE ENERGY TARGET
energy mix is 31% in 2050. This policy should be implemented by
coordinated planning and strategies, both in the national level In the past, Indonesia has hard dependency on oil for
and regional level. The aim of this paper is to convey the policies domestic energy consumption. Until early 1980s, the share of
and strategies for renewable energy development in Indonesia. oil in primary energy mix was around 90%. Then it could be
decreased to around 60% in the end of 1990s by utilizing
Keywords—policy; strategy; renewable energy natural gas and coal for domestic use. In 2015, oil share in
I. INTRODUCTION primary energy mix was 37.6%. Coal use has been increased
significantly because of steam power plant program starting in
Indonesia is a large archipelago country that comprises 2006. This program is a crash program to overcome electricity
17,504 islands. The land area is 1.9 million square kilometers, crisis and boost electrification.
and the sea surrounding the islands that is within the exclusive
economic zone is about 7.9 million square kilometer. The According to Energy Law (2007) and National Energy
larger islands are Sumatra, Java, Kalimantan, Sulawesi and Policy (2014), renewable energy utilization will be developed
Papua. Administratively the country comprises 34 provinces. in the long term. New and renewable energy share in the
primary energy mix is targeted to be 23% in 2025 and to be
The population in 2015 was 255 million people that are 31% in 2050. This is a very optimistic target, because currently
unevenly distributed among the islands and provinces. Java is the share of renewable energy is still less than 9.5%. New and
the most densely populated island; almost 60% of Indonesia renewable energy consist of nuclear, hydrogen, hydro,
population lives in this island, whereas the area is only 6.6% of geothermal, bioenergy, and other new and renewable energy.
total land area.
100%
9.3%
II. ENERGY SITUATION IN INDONESIA 23% 31%
80%
Indonesia is endowed with relatively large and diversified 34.4%
energy resources, i.e. oil and gas, coal, and geothermal. 60% 30%
25%
Indonesia has been the largest LNG exporter in the world 18.7%
during 1980 – 2005, and now becomes the fourth; and the 40% 22% 24%
largest coal exporter since 2012 until now. Indonesia also has 20% 37.6%
the largest geothermal resources in the world. As a tropical 25% 20%
and an agricultural based country, Indonesia has a large 0%
potency of solar energy and bio-energy. Indonesia has been 2015 2025 2050
the largest biodiesel exporter.
Oil Natural Gas Coal NRE
Total primary energy consumption of Indonesia in 2014
was 201.1 million TOE (ton of oil equivalent); consists of oil Figure 1. Primary Energy Mix Target
75.6 million TOE, natural gas 37.6 million TOE, coal 69.2
million TOE, hydro 4.2 million TOE, geothermal 2.3 million IV. RENEWABLE ENERGY STRATEGIES
TOE, and biofuel 12.3 million TOE. The final energy The National Energy Policy mentioned before is policy on
consumption at same year was 136.4 million TOE; consists of the national level that cannot be directly applied at the
oil fuel 64.4 million TOE, natural gas 17.2 million TOE, LPG provincial level, as conditions in each province are different.

• Presented at the 5th International Conference on Renewable Energy Research and Applications, Birmingham, United
Kingdom, 21-23 November 2016
• Published at https://ieeexplore.ieee.org/document/7884550
Therefore, each province should formulate its own target and The five provinces show differences in current renewable
action plan for renewable energy. The provincial target should energy consumption (see table 1). North Sumatera has the
represent the regional condition, so data about supply and highest use of renewable energy, because it has large hydro
demand are collected from the field. power plants, whereas Yogyakarta has the lowest use among
the five provinces.
There are four main steps to conduct the analysis. These
four steps include (i) current situation; (ii) supply demand Table 1. Primary energy mix of the five provinces, 2014
analysis; (iii) the expected condition; and (iv) action plan to Primary Energy Mix (1000 TOE)
achieve the expected condition. West
Energy North Central Yogya-
Nusa Papua
Step 1: current situation analysis. Current situation analysis Sumatra Java karta
Tenggara
consists of identification of renewable energy potential in the Oil Fuel 4,184 6,348 651 626 854
region, the current renewable energy development policy and Nat Gas 488 82 17 3 1
renewable energy utilization in the region. Coal 72 2,092 532 477 612
Renewable 561 629 57 55 84
Step 2: supply demand analysis. Based on the identified Total 5,306 9,151 1,257 1,162 1,552
renewable energy potential data, then the development Percentage
Oil Fuel 78.9% 69.4% 51.8% 53.9% 55.0%
opportunities of the potential are analyzed, i.e.: increasing Nat Gas 9.2% 0.9% 1.4% 0.3% 0.1%
electrification, decreasing oil fuel consumption, generating Coal 1.4% 22.9% 42.3% 41.1% 39.5%
income, etc. Supply-demand analysis is conducted to calculate Renewable 10.6% 6.9% 4.5% 4.8% 5.4%
the feasible development of the renewable energy potential.
The real condition in the field shows that not the entire Hydro potentials consist of large hydro and small hydro.
renewable energy potential can be developed, because of lack The biofuel potential is based on various sources, such as
of demand or absence of a transmission line. In this case, coconut, palm oil, nipa and sago. Biomass in this study
renewable energy can be divided into tradable and non- consists of agricultural waste and municipal waste. The biogas
tradable (utilized at the site) energy. potential is based on cow manure. Table 2 shows the
Step 3: setting of renewable energy target. Regional energy renewable energy potential in the five provinces.
forum set the renewable energy development target in the Table 2. Renewable energy potential in the five provinces,
province based on the current condition of renewable energy 2014
potency and its utilization, supply-demand analysis of
renewable energy, and the current national energy policy. North Central Yogya- W-Nusa
Energy Papua
Sumatra Java karta Tenggara
Then, the renewable energy development target is formalized *)
Hydro 3,095 540 1.25 212 22,236
by the regional government. Geothermal *) 3,680 780 - 145 -
Biofuel **) 243,166 84,868 - 33,418 781,351
Step 4: renewable energy action plan. Renewable energy Biomass **) 984,006 61,888 1,678 92,705 117,299
action plan is the detail implementation plan to achieve the Biogas **) 22,376 124,593 186 32,843 16,529
renewable energy target, consists of action plan for each type *) **)
Note: in MW, in TOE
of renewable energy by regency/city and implementation
strategy, i.e.: institutional set up for implementation,
Table 3 shows the installed capacity of renewable energy
investment plan, identification of human resources and
technology requirement. in 2014 in the five provinces. The table includes all renewable
energy capacities that are ever built in the regions, but some of
V. CASE STUDY that may be not running well.
There are five provinces chosen as case study for Table 3. Installed capacity of renewable energy in the five
formulating implementation strategy of renewable energy provinces, 2014
development, i.e. North Sumatera, Yogyakarta, Central Java,
North Central Yogya- W-Nusa
West Nusa Tenggara, and Papua. The map of selected Energy
Sumatra Java karta Tenggara
Papua
provinces (in red/dark shading) is shown in Figure 1. Hydro *) 938 327 - 1 9.07
Geothermal *) 12 60 - - -
Biodiesel **) 114,896 2,433 - - 6,882
**)
Bioethanol - 657 - - -
Biogas ***) 70 196 - 98 -
Solar *) 0.25 0.23 0.01 0.45 0.43
Note: *) in MW, **) in KL/year, ***) in m3

The renewable energy utilization in 2014 for the five

provinces is shown in table 4. The data are calculated from the
installed capacity and the capacity factor (utilization of
capacity). The capacity utilization of solar home systems
Figure 2. Map of Indonesia entails an aggregation of capacity utilization in a year.

• Presented at the 5th International Conference on Renewable Energy Research and Applications, Birmingham, United
Kingdom, 21-23 November 2016
• Published at https://ieeexplore.ieee.org/document/7884550
 Table 4. Use of renewable energy in the five provinces, 2014 infrastructure are realized. Moreover, renewable energy
Renewable Energy Utilization (TOE)
development should be supported by sufficient capital and
West capacity, coordinated planning, and appropriate energy pricing
Energy North Central Yogya-
Sumatra Java karta
Nusa Papua policy.
Tenggara
Hydro 170,606 59,643 - 177 5,075 VI. CONCLUDED REMARKS
Geothermal 10,261 20,357 - - -
Biofuel 363,863 552,012 56,606 54,461 74,295 National energy policy and national energy target on
Biogas 22 362 - 181 24 renewable energy development should be detailed to the
Solar 31 92 4 89 105 provincial level. Then, provincial government should detail
Total 544,783 632,466 56,610 54,908 79,499
the renewable energy development target and its action plan
for regencies/cities level. The national energy policies are
Tables 2, 3 and 4 show the initial conditions (2014) that general policies to give direction to the lower level
are the result of the first step of analysis. The second step was government. Therefore, regional governments should have
to analyze potential opportunities, i.e. increasing capacity to formulate regional energy policies and planning,
electrification (rural electrification), decreasing oil fuel particularly on renewable energy.
consumption (replacing kerosene use in household), and The important things that should be covered by renewable
generating income (for commercial use). energy action plan are renewable energy development target,
The main result of this analysis are to formulate a realistic institutional set up and budgeting mechanism to implement the
renewable energy development target and action plan to reach plan, guideline and mechanism for monitoring of the
that target in the five provinces. Then, this analysis of the implementation progress of the plan.
target and its action plan is brought to regional energy forum. The renewable energy action plan is not only government
The regional energy forum decides the target and its action plan, but an overall planning on renewable energy
plan. In Table 5, it is shown the renewable energy development in the regions. So, it can be a guidance for all
development target in 2025 in the five provinces. stakeholders in the regions, included public and private sector
Table 5. Renewable energy target in the five provinces for to implement the action plan and achieve the renewable
2025 energy target.
Renewable Energy Target in 2025 (1000 TOE) ACKNOWLEDGMENT
W. Nusa
Energy North Central Yogya- The authors would like to thank the Head of Centre for
Tengga- Papua
Sumatra Java karta
ra Data and Information Technology - Ministry of Energy and
Small hydro 250 274 0.17 102 103 Mineral Resources of Indonesia, CASINDO project, and our
Large hydro 8,069 419 - - 4,229 colleagues at the PUSDATIN ESDM for their support and
Solar 4 6 - 1.5 0.9
Biogas 16 29 27 10 30
advices.
Geothermal 2,964 3,093 - 600 -
Biomass 1,057 45 0.45 400 2.3
Biodiesel 729 10 - 250 166
Bioethanol 200 501 - - 1,783
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It should be noted that the renewable energy target in
Table 5 can be reached if all supporting policy measures and

• Presented at the 5th International Conference on Renewable Energy Research and Applications, Birmingham, United
Kingdom, 21-23 November 2016
• Published at https://ieeexplore.ieee.org/document/7884550