PRIORITY TO DECISION MAKING IEEJ : August 2014 CHANGING ENERGY FUTURE FUTURE,, STARTS NOW INDONESIA ENER RGY POLICY Ministry of Energy and Miineral Resources 1 1 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare OUTL LINE I. II. III. IV IV. V V. INDONESIA AT TH HE GLANCE CURRENT ENERG GY POLICY NATIONAL ENERG GY POLICY CHALLENGES PARTICIPANT’S PARTICIPANT SG GOALS 2 2 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare I INDONESIA A I. AT A GLANCE 3 3 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare INDONESIA’S PROFILE 2011 Indicator Population GDP Nominal Growth 240 million 1.49% $ 846.3 billions GDP p per capita (PPP) INDONESIA 6.4% $ 3,542 3 542 17.000 islands 4 4 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare INDONESIA A’S PROFILE • In the last few years, Indonesia managed to maintain a good economic growth and attractive investment climate. • That is reflected in increasing of rating and amount of investment Realization and Indonesian Investment Projections Indonesian Investment Projections Institutions USD Billions Actual Projected Rating Outlook S&P (Jan’12) BB+ Positive Fitch (Dec’11) BBB- Stable Moody’s (Jan’12) Baa3 Stable 56.32 22 60.00 43.367 40.00 31.500 23.167 20.00 26 667 26.667 15.011 .00 2009 2010 2011 2012 2013 2014 4 source: The Investment Coordinating Board of the Republic of Indonesia, 2011 “Indonesia was ranked 9th as major destination for FDI” World Investment Prospects Survey 2010 – 2012, UNCTA AD The government has set a target for Indonesia to become an advanced country by 2025 and the IMF predicts that it will be the world's fifth largest economy by 2030 5 Euromonitor International, International 2012 5 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare HIGH ECONOMIC C GROWTH AND SUSTAIINABLE Economic goals: (1) High income country; (2) Top 10 world's biggest economy by 2025,, and top 6 by 2050. GDP: US$ 3,8 – 4,5 trillion Acceleration of i l if inclusif economic growth and g sustainable GDP/capita: US$ ~ 13.000 – 16.100 GDP: US$ ~ 1,2 trillion (high income country) GDP/capita: US$ ~ 4.800-5.000 GDP ~ US$ 850 billion GDP/capita: US$ 3.542,9 2011-2014: 6,4 – 7,5 %/year 2015-2025: 7,5 – 9 %/year 6 6 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare CURRENT C CONDITION Demand for energy, materials, water and other key resources demand is likely to increase rapidly Indonesia today… …and in 2030 7 7 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare Source: McKinsey Global Institute, 2012 POTENTIAL AND ENE ERGY PRODUCTION NO FOSSIL ENERGY RESOURCE (RE) RESERVE (RV) RATIO RE/RV (%) PRODUCTION (PROD) RATIO RV/PROD (YEAR)*) 1 2 3 4 5 = 4/3 6 7 = 4/6 1 Oil (Billion (Billi barrel) b l) 56 6 56.6 7 73 **) 7.73 14 0 329 0.329 23 2 Gas (TSCF) 334.5 152.9 46 3.07 50 3 Coal (billion ton) 161.3 ***) 28.17 17 0.353 80 4 Coal Bed Methane (TSCF) 453 - - - - 5 Shale Gas (TSCF) 574 - - - - *) Assuming no new reserve are found **) Including Cepu Block ***) Including 41 Billion Ton underground resources NO NEW AND RENEWABLE ENERGY RESOURCE (R RE) INSTALLED CAPACITY (IC) RATIO IC/RE 1 2 3 4 5 = 4/3 1 Hydro 75.670 MW W 6.654,29 MW 8,79 % 2 Geothermal 29.038 MW W 1.226 MW 4,22 % 3 Mini/Micro Hydro 769,69 MW W 228,983 MW 29,75 % 4 Biomass 49.810 MW W 1.618,40 MW 3,25 % 5 Solar 4,80 kWh/m2/dday 22,45 MW - 6 Wind 3 – 6 m/s 1,87 MW - 7 Uranium *) 3.000 MW ((e.q. q 24,112 , tonn)) for 11 years y 30 MW ,00 % 1,00 *) Only in Kalan – West Kalimantan Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare 8 8 II. CURRENT EN NERGY POLICY 9 9 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare CURRENT ENER RGY CONDITION 1. 28% or US$ 41,9 billion of total national budget comes from f energy & mineral sector revenue; 2 F 2. Fuell andd electricity l i i are still ill subsidized, b idi d andd the h amount is i iincreasing i every year. FFor 2012 2012, amount off subsidy b id aproximately US$ 25 billion, which 77% are not on targeet; 3 Investment 3. In estment in EMR sector reached US$ 27 billion in 20111. 11 Good Investment In estment climate; climate 4. Indonesia has diversity of energy; 5. Indonesia is an exporter energy (oil, coal, and gas), but also an importer of energy (fuel); 6. Gas utilization is 56% for export and 44% for domestic; 7. Oil still has the largest share (49,7%). Use of Renewablee energy still only around 6%. Renewable energy are targeted to reach 26% in 2025; 8. Growth in energy consumption is average of 7% per yeaar, but has not been supported by enough supply energy. Dependence on fossil fuels is still high, even though thee reserve is decreasing; 9. Limited access of energy, electrification ratio still only 811%. Infrastructure is one of challenge to fulfill domestic energy needs. 10 10 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare NATIONAL ENE ERGY MIX 2012 Gaas 20,1 20 1 % Coal 24 5 % 24,5 Oil 49,7 % Renewable 5,7 % 11 11 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare CONTRIBUTION ENERGY & MINERAL REVENUE R TO NATIONAL BUDGET Total National Budget 2012 $151 billion 1. Energy & mineral revenue is still the backbone of Indonesia backbone of Indonesia’ss economy economy $ $29,6 (20%) 2. 28% or US$ 41,9 billion of total national budget comes from energy & mineral sector revenue sector revenue $12,3 3; $12 3 ; (8% %) 3. 20% or US$ 29,6 billion of total national budget is cotributed by oil&gas revenue $ 109 (72%) ENERGY & MINERAL SECTOR REVENUE 50,0 45,0 $ 0,05 (0,0032% %) (0 0032% Oil and gas BilionUS$ 40,0 In billion US$ Mining & geothermal Mining & geothermal Others Others th Mining Oil &gas 35,0 300 30,0 25,0 20,0 0,2 31,8 41 89 41,89 0,05 8,9 12,26 31,2 29,58 0,1 22 9 22,9 7,4 0,1 5,1 15,0 10,0 40,3 24 3 24,3 17,7 5,0 Other sector (non EMR) 12 - 2009 2010 2011 2012 12 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare II. NATIONAL ENERGY POLICY 13 13 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare NATIONAL ENERGY E MIX Target of 2025 (~400 TOE) Gas 20,1 % Oil 49,7 % Gas 22% Coal 24,5 % Oil 25 % 25% Coal 30 % Renewable 23 % Renewable 5,7 % 14 14 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare NATIONAL ENER RGY DEMAND 10 9 7.72 M Million B BOEPD 8 7 5.90 6 0.88 4.36 5 4 2.00 3.23 0.46 2.4 2.2 3 0.18 0.8 1.4 2 0.65 0.85 1.12 1 1.60 1 60 1 69 1.69 1.73 1.83 2010 2015 2020 2025 1.52 • Energy demand gy increases every year following the economic growth. th • Portion of renewable energy will be be 25 9% energy will be be 25,9% in 2025. • Investment is required to q fulfill energy demand. 0 Renewable Coal Gas Oil 15 15 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare LEGAL FRAMEWORK OF NATIONAL N ENERGY POLICY UU No.10 / 1997 on Nuclear UU No. 22 / 2001 on Oil and Gas UU No. 27 / 2003 on Geothermal UU No. 17 / 2007 on National Long Term Development Planning (RPJPN) UU No. 4 / 2009 on Mining and Coal UU No. 30 / 2009 on Electricity UU No. 32 / 2009 on Environmental g Other Law and Regulation UU N UU N No. 30/2007 on Energy 30/2007 E NATIONAL ENERGY POLICY UU No. 30/2009 on Electricity REGIONAL REGIONAL ENERGY PLAN (Province) NATIONAL ENERGY PLANNING REGIONAL ENERGY REGIONAL ENERGY PLAN (City/District) NATIONAL PLANNING OF ELECTRICITY 16 16 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare POLICY AND DIRECTION OF NATIONAL ENERGY Y POLICY 1. To shift the paradigm in energy management; 2. Energy gy sovereignty g y management; g 3. To ensure the availability of domestic energy;; 4. To optimalize energy resources managementt; 5. Efficiencyy of energy gy utilization;; 6. To improve energy accessibility; 7. To develop capabilities and independency of energy industry; 8. Job creation; 9. Preserving the environmental functions. 17 17 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare THE GOAL OF NA ATIONAL ENERGY POL LICY 1. To establish of a new paradigm that energy as a source of development; 2. To achieve energy elasticity is smaller thann 1 (one) in 2025, which is aligned with the economic growth target 3. To achieve final energy intensity reduction become 1 (one) percent per year in 2025; 4. To achieve of electrification ratio of 85% byy 2015 and approach 100% in 2020; 5. To achieve household ratio of gas utilizatioon by 85% in 2015; 6. To fulfill the objectives of supply and utilizaation of energy; 7. To achieve the optimal of primary energy mix. m 18 18 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare IV CHALLENGES IV. 19 19 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare SHARE OF ENERGY SUBSIDY IN NATIONAL BUDGET Total government expenditure in national budg get 2012: US$ 172 billion Energy subsidy:: US$ 25 billion (15%) Other government expenditure: US$ 147 billion (85%) • Total ggovernment expenditure p in 2012 is US$$ 172 billion; • US$ 25 billion or 15% of government expenditure is used for energy subsidy; • Energy subsidy has a great share in national b d t so th budget, thatt other th iimportant t t program cannot deliver to the fullest; • Most of energy subsidy is not on target; • Increasing in fuels consumption could make subsidyy to become US$$ 34 billon ((19%). ) 20 20 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare POTENTIAL AND ENE ERGY PRODUCTION NO FOSSIL ENERGY RESOURCE (RE) RESERVE (RV) RATIO RE/RV (%) PRODUCTION (PROD) RATIO RV/PROD (YEAR)*) 1 2 3 4 5 = 4/3 6 7 = 4/6 1 Oil (Billion (Billi barrel) b l) 56 6 56.6 7 73 **) 7.73 14 0 329 0.329 23 2 Gas (TSCF) 334.5 152.9 46 3.07 50 3 Coal (billion ton) 161.3 ***) 28.17 17 0.353 80 4 Coal Bed Methane (TSCF) 453 - - - - 5 Shale Gas (TSCF) 574 - - - - *) Assuming no new reserve are found **) Including Cepu Block ***) Including 41 Billion Ton underground resources NO NEW AND RENEWABLE ENERGY RESOURCE (R RE) INSTALLED CAPACITY (IC) RATIO IC/RE 1 2 3 4 5 = 4/3 1 Hydro 75.670 MW W 6.654,29 MW 8,79 % 2 Geothermal 29.038 MW W 1.226 MW 4,22 % 3 Mini/Micro Hydro 769,69 MW W 228,983 MW 29,75 % 4 Biomass 49.810 MW W 1.618,40 MW 3,25 % 5 Solar 4,80 kWh/m2/dday 22,45 MW - 6 Wind 3 – 6 m/s 1,87 MW - 7 Uranium *) 3.000 MW ((e.q. q 24,112 , tonn)) for 11 years y 30 MW ,00 % 1,00 *) Only in Kalan – West Kalimantan Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare 21 21 V PARTICIPAN V. NT’S NT S GOALS 22 22 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare PARTICIPAN NT’S GOALS • To To formulate energy planning formulate energy planning in medium term and long term in medium term and long term references for indonesia as the country with rapid economic growth. • To formulate energy policy forr the developing countries which the level of dependence on fo the level of dependence on fo ossil fuels subsidized is high ossil fuels subsidized is high enough. This led to the difficu ulty of the development of alternative energy especially r gy p y renewable energy. gy • To provide better input in the formulation of national energy plan as a derivative of a nation plan as a derivative of a nation nal energy policy drawn up by nal energy policy drawn up by the national energy council. So it can be implemented p p y properly and successfully achi y ieve the goals of the national g energy policy that has been seet. 23 23 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare dm go id dm.go.id www.esd www esd 24 24 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare OIL AND GAS RESERVE as of 01 Januari 2013 6,93 , 150,68 1,22 110,67 360.65 50.27 14,63 3.386,67 2,58 8,06 573,50 0 51,87 PAPUA 65,97 18,30 23,90 1.005,34 , 24,96 3,18 15,21 5,89 494,89 1.312,03 , OIL REMAINING RESERVE (MMSTB) RESERVE (MMSTB) PROVEN (P1) = 3.692,50 MMSTB GAS REMAINING RESERVE (TSCF) GAS REMAINING RESERVE (TSCF) PROVEN (P1) = 101,54 TSCF POTENTIAL (P2+P3) = 3.857,31 MMSTB POTENTIAL (P2+P3) = 48,85 TSCF TOTAL (3P) TOTAL (3P) TOTAL (3P) = 7.549,81 MMSTB 7.549,81 MMSTB 25 = 150,39 150 39 TSCF 25 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare INDONESIAN BASINS Eastern part Discoveries in Jurrasic Plays 1998‐2008 Western part (mature fields) < 100 MMBOE Discovered Basin 100 ‐ 500 MMBOE Undiscovered Basin 500 ‐ 1000 MMBOE New B Basin (2008) 1000 ‐ 1500 or up to 1500 MMBOE 26 26 2010 © BPMIGAS – All rights reserved Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare COAL BED METHA ANE RESOURCES NORTH TARAKAN BASIN (17.50 TCF) KUTEI BASIN (80.40 TCF) BERAU BASIN (8 40 TCF) (8.40 TCF) CENTRAL SUMATERA BASIN (52.50 TCF) OMBILIN BASIN (0.50 TCF) KALIMANTAN BARITO BASIN (101.60 TCF) SOUTH SUMATERA BASIN (183.00 TCF) PAPUA Legends : Legends : CBM Basin SULAWESI PASIR AND ASEM BASIN ASEM B (3.00 TCF) BENGKULU BASIN (3.60 TCF) SOUTHWEST SULAWESI BASIN (2.00 TCF) JATIBARANG BASIN ( (0.80 TCF) ) • Resource potential estimated at 453 p TCF • Total CBM Basin = 11 • Contract Signed up to 2012 : 50 CBM PSC Cs • Early good results in East Kalimantan, currrently used for small scale power generation; future development includes supply to existing LNG facility 27 27 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare COAL RESOURCE AND RES SERVE TOTAL RESOURCES 161.34 Billion Ton* TOTAL RESERVE 28.17 Billion T on Very High ( > Very High ( > 7100 kal/gr 7100 kal/gr ) High ( 6100 ‐ 7100 kal/gr ) Medium ( 5100 ‐ 6100 kal/gr ) Low ( < 5100 kal/gr ) Low ( < 5100 kal/gr *) 41 billion ton is underground mining 28 28 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare MINERAL RESOURCE AND RESE ERVE NO Ferro and Associates : Fe, Nickel, Cobalt, Chromit , Mangan, M Molibdenum, Titanium Precious Metal : Gold, Silver, Platinum Base Metal : Zinc, Cupper, Tin, Lead, Mercury Light and Rare metal : Bauxite, Monasit COMODITY RESOURCE (MILLION TON ORE) RERSERVE (MILLION TON ORE) TON ORE) 1 Copper 4.925 4.161 2 Bauxite 551 180 3 Nickel 2.633 577 577 4 Iron sand 1.649 5 5 Lateritic iron 1.462 106 6 Primary iron Primary iron 563 30 30 7 Iron sediment 18 ‐ 8 Manganese 11 4 9 Alluvial gold 1.455 17 10 Primary gold 5.386 4.231 11 Silver 3.406 4.104 12 Zinc 577 7 13 Tin 354 0,7 14 Lead d 363 1,6 29 (Source : Geological Agency, Agency 29 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare GEOTHERMAL POTENTIAL IN INDONESIA PLTP LAHENDONG: 80 MW PLTP SIBAYAK: 12 MW KALIMANTAN 115 MW 8 LOKASI SUMATERA 13 516 MW 13.516 86 LOKASI SULAWESI 2.519 MW 55 LOKASI PLTP GUNUNG SALAK: 377 MW PLTP WAYANG WINDU: 227 MW PLTP KAMOJANG: 200 MW JAWA 10.092 MW 71 LOKASI PLTP DARAJAT: 270 MW MALUKU 954 MW 24 LOKASI PAPUA 75 MW 3 LOKASI BA ALI + NT 1.767 MW 27 LOKASI PLTP DIENG: 60 MW *) Does not account for potential geothermal offshore CCcContact: report@tky.ieej.or.jp TOTAL POTENTIAL: 29.038 MW (276 LOCATION) TOTAL INSTALLED CAPACITY: 1.226 MW (6 WORKING ACREAGE) 30 30 Etnawati Prihandayani MEMR Indonesia EMR for People’s Welfare