Renewable energy accounted for 33.4% of total primary energy supply (TPES) in Indonesia in 2012. This amounts to 71.4 million tonnes of oil-equivalent (Mtoe) (282.3 million barrels of oil-equivalent), made up primarily of biofuels and waste biomass (25.3% of TPES). The remainder is from geothermal (7.6%), hydro (0.5%) and negligible levels of wind and solar power.
Since 2002, the share of renewables in TPES has declined from 37.5%, mainly due to very slow growth in biofuels and waste at the time when total energy supply is growing steadily (Figure 8.1). Energy from biofuels and waste increased by 0.7% per year, which is the slowest rate of growth of all the fuels in Indonesia’s energy mix. The strongest growth in renewables was in geothermal energy, which grew by 4.2% per year. As such, the share of biofuels and waste biomass in TPES has fallen from 30% in 2002 to 25.3% in 2012, while the share of geothermal has increased from 6.5% to 7.6% over the same period.
Figure 8.1 Renewable energy as a percentage of TPES, 1973-2012
* Negligible.
Source: IEA (2014a), Energy Balances of Non-OECD Countries 2014, OECD/IEA, Paris.
Figure 8.2 Renewable energy as a percentage of TPES in Indonesia and IEA member countries, 2012
Sources: IEA (2014b), Energy Balances of OECD Countries 2014, OECD/IEA, Paris; IEA (2014a), Energy Balances of Non-OECD Countries 2014, OECD/IEA, Paris.
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Indonesia has the fourth-highest share of renewables in TPES if compared to IEA member countries, behind New Zealand, Norway and Sweden. It has the second-largest share of biofuels and waste in TPES after Finland and the second-largest share of geothermal in TPES behind New Zealand (Figure 8.2).
ELECTRICITY GENERATION
Electricity generation from renewable sources amounted to 22.4 terawatt hours (TWh) in 2012, which is 11.4% of total generation. This mainly comprises hydro (6.5%) and geothermal (4.8%). Biofuels and waste share only 0.1% of generation, while wind and solar power are still at an early stage of development.
The share of renewables in electricity generation has fallen from 15% in 2002 to 11.4 in 2012, due to slower growth in hydro and geothermal compared to coal. The annualised growth rate in hydropower was 2.6% between 2002 and 2012 and 4.2% for geothermal, while total generation grew at 6.1% per annum. The use of biofuels and waste increased by 29.3% per year from 2002 to 2012, although their overall share in generation is still below 1%.
Indonesia ranks sixth lowest if compared to IEA member countries in terms of the share of renewable energy in electricity generation (Figure 8.3). The IEA median is 19.4%.
Figure 8.3 Electricity generation from renewable sources as a percentage of all generation in Indonesia and IEA member countries, 2012
Sources: IEA (2014b), Energy Balances of OECD Countries 2014, OECD/IEA, Paris; IEA (2014a), Energy Balances of Non-OECD Countries 2014, OECD/IEA, Paris.
INSTITUTIONS
Indonesia has rather complex institutional and stakeholder arrangements in the renewable energy sector. A number of government agencies are directly involved in formulating or implementing renewable energy policy at the national level, with local governments and a number of other government agencies also having influence over policy formulation and implementation (Figure 8.4).
The Ministry of Energy and Mineral Resources (MEMR) is the main institution that formulates policy and regulates the development of renewable energy under the supervision of the Co-ordinating Ministry of Economic Affairs. In 2010, MEMR established a new Directorate-General of New, Renewable Energy and Energy 0%
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Conservation (DGNREEC). DGNREEC serves as a focal point for renewable energy policy formulation in Indonesia.
The Co-ordinating Ministry of Economy is responsible for the development of energy infrastructure through the Masterplan for Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) and co-ordinates renewable energy policy formulation between the other actors.
The National Energy Council (NEC) was established in 2009 and is chaired by the President of Indonesia. The NEC works to co-ordinate national energy general planning and regional energy general planning, and to define the authority of central and local governments.
The Ministry of Finance (MoF) contributes to renewable energy policy, and approves expenditure for the implementation of regulations concerning fiscal and tax incentives for renewable energy projects, such as the reduction of import taxes for technical components. The MoF established the Indonesia Clean Technology Fund, which provides USD 250 million for equity enhancement towards clean technology projects in Indonesia.
The Ministry for National Planning (BAPPENAS) influences the direction of policy on renewable energy, although is not directly involved in the implementation of renewable energy regulation. BAPPENAS recently established a roadmap for the promotion of renewable energy infrastructure.
Figure 8.4 Government institutions for renewable energy in Indonesia
Source: Damuri, Y.R. and R. Atje (2013), Investment Incentives for Renewable Energy: Case Study of Indonesia, International Institute for Sustainable Development, Winnipeg.
The Ministry of Research and Technology and its Agency for the Assessment and Application of Technology (BPPT) are involved in formulating research and development and implementation of renewable energy technologies.
The Ministry of Agriculture is involved in the development of bioenergy via its responsibility for agricultural and plantation practices, including palm oil plantations.
The Ministry of Forests and the Ministry of Environment are involved in both bioenergy and geothermal-related issues, as many plantations are located in forest areas and environmental protection measures apply.
Coordinating Minister of Economy
National Development Planning Agency Ministry of Energy and Mineral Resources National Energy Council
Ministry of Finance
Biofuel/biodiesel producers National oil company
Renewable energy IPPs National electric company
Local governments
FiT Financing guarantee Subsidy Regulatory function
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The state-owned company PLN is the national supplier of electricity and controls the electricity grid. PLN is involved in renewable energy projects such as the 1 000 Island solar photovoltaic (PV) project.
Local and regional governments have become important stakeholders in the implementation of renewable energy policy, as they develop regulations and issue permits concerning energy planning. Furthermore, as part of promotional strategies to attract investment, local and regional governments can provide schemes that influence the implementation of energy sector policies. Local governments together with other local stakeholders, therefore, often initiate the development of renewable energy projects in the regions. Financing may come from the regional government budget (especially for off-grid renewable energy systems).
The Indonesian Renewable Energy Society is a forum established in 1999 to promote renewable energy in Indonesia. Its membership includes the private sector, research institutions and the government. It aims to facilitate co-ordination between the various associations and fora, including Indonesian Geothermal Association, Micro Hydro Association, Solar Cell Entrepreneur Association, Indonesian Association of Bioenergy, Indonesian Biodiesel Forum and Wind Energy Entrepreneur Association.
The Indonesian Biodiesel Forum (FBI) was established in February 2002 and currently comprises a few hundred members from government, research organisations, non-governmental organisations and the private sector. FBI aims to promote the production and use of biodiesel in Indonesia to achieve sustainable energy supply security and economic development. This is done through raising awareness among the public at large about the role that biofuels for transport can play, and by facilitating the exchange of information among the various stakeholders.
The National Team for Biofuel Development was established by Presidential Decree No. 10/2006 with the mandate to develop a blueprint for increasing the use of biofuels.
The team consists of representatives from several ministries and other governmental bodies, research organisations and the private sector.
The Indonesia Geothermal Association (API) was established in 1991 to promote geothermal energy in Indonesia. API is a scientific, educational, cultural, non-governmental and not-for-profit organisation. Its approximately 500 members include geothermal experts, companies and other stakeholders.